The mining and construction industry is looking at a future through rose-colored glasses as demand for its equipment surges globally. This can be attributed to the growth in onshore and offshore production, as well as other reliant sectors such as energy and infrastructure.
Currently, a lot of large-scale construction is happening in developing countries which has sparked a need for surplus equipment from developed counterparts. Moreover, environmental and safety concerns in the United States and Europe are partly behind some surplus liquidation campaigns as companies look to get rid of outdated equipment in favor of newer ones.
That said, organizations that make use of heavy equipment have been presented with a great strategic opportunity with a ready market that’s in a position to offer maximum recovery through the secondary market.
It’s not a given, however, and it is for this reason mining and construction companies need to stick to proven guidelines to ensure they maximize recovery.
Understand your Surplus Equipment and the Market
The first thing you want to make sure is to know the value of all surplus equipment. You don’t want to undervalue nor do you want to overvalue, so a common ground needs to be established – and this is not as easy as it may sound. A trusted inventory liquidation partner can ensure maximum possible recovery through leveraging market data as well as the necessary expertise to assess each individual item.
The Pareto Rule (80-20 rule) also rings true in this industry. Often the case, you find that 20 percent of your company’s most valuable assets fetch around 80 percent of its total recovery value. A good liquidator will also tell you that the highest-value assets should go first.
Understanding the market also comes in handy because assets differ in terms of type, age, and condition. A conventional crawler with 15 years of service, for example, might attract a different buyer with a hydraulic all-terrain crawler that’s been in operation for only 5 years.
In addition, mining and construction companies need not confine themselves to the local market. Rather, they should consider extending their tentacles to tap into the booming secondary market in the developing nations as they are more likely to increase their returns. This is easier said than done though.
The knowledge and established network of buyers aside, reputable tech liquidators can help you avoid breaching any local or international regulations that are in place.
Follow Surplus Asset Liquidation Best Practices
If you find yourself in the possession of surplus assets that have value but cannot be redeployed, these should be recovered in the secondary market. There is an elaborate process to it that includes:
- Determining the sales channels
- Devising a targeted marketing strategy
- Scheduling a preview period
- Providing comprehensive asset information
- Designating a removal timeline
- Buyer screening
Select a Trusted Management Partner
A reverse supply chain is like a multi-faceted machine. When it comes to equipment of this magnitude, you don’t need to be told twice (let alone once) that a dedicated team should be on hand to oversee surplus management functions.
Most organizations, as you would expect, lack the internal bandwidth or systems to manage their surplus inventory while at the same time extinguishing all risks and maximizing recovery.
Sounds like a sizeable bite, doesn’t it? It is.
Working with a partner you can trust solves this headache for you while leaving you to concentrate on other core business functions. Whenever you’re out shopping for inventory liquidators, choose carefully whom to do business with. Consider things like:
- The track record of success in your industry
- Above-board reporting on all program aspects
- Multichannel sales and marketing strategies to maximize recovery
- An understanding of markets (both local and international), with an extensive network
Liquidating your assets can be a profitable venture truth be told, but these processes tend to rely heavily on execution for their success. By sticking to these tips and choosing a reputable partner to do business with, you can be guaranteed increased margins for each project and a strong ROI at the end of the day. Take it from us.