ForConstructionPros.com

As rental companies compete to offer the youngest booms, scissor lifts and telescopic forklifts, they often overlook the huge liability sitting in their yards - nonproductive used equipment. If used equipment presents a financial challenge, however, it offers an even greater opportunity. While the vast majority of the rental industry focuses on its core business - renting equipment - there is a competitive advantage for those who learn to efficiently turn their fleets over and remove depreciating equipment from their books.

All rental companies have depreciation schedules. While a maintenance-intensive 60-foot boom might last four to five years, scissor lifts can enjoy up to seven years of useful life. But what happens to this equipment once it’s no longer “young enough?” Often, maintaining and renting this equipment costs more than simply letting it sit in the yard. Rental companies might try to sell it at retail, a process that takes an average of 120 days. Meanwhile, the equipment continues to depreciate. Selling that machine in a month, however, can mean substantial reductions in cost.

Between $600 and $800 million of used equipment from the top six national rental chains alone ends up at auction each year, as companies look to turn 20 percent of their fleets annually. But are traditional auctions

the most profitable way to sell used equipment? While live auctions have been around for decades, today’s fleet managers are increasingly turning to the Internet to sell used equipment.

An international scope

While a live auction usually draws local and regional buyers, online auctions are not restricted to a geographic location and do not require face-to-face interaction. Instead, online auctions provide an international bidding audience, allowing thousands of visitors to view or bid on a piece of equipment. For those looking to sell aerial work platforms and material handling equipment, larger audiences typically generate more bids per item and ultimately a better price. Additionally, international buyers typically pay 8 to 10 percent more than their domestic counterparts. Online auctions also allow sellers to take advantage of equipment shortages in the worldwide marketplace.