There are as many buyers as sellers of woodworking and finishing equipment in 2011.
Are there more auctions of woodworking equipment in 2011?
Charlie Winternitz of Loeb Winternitz Industrial Auctioneers, Chicago, believes there are more auctions this year.
“People think the auction market is busier when we’re in a down market, but that’s actually not true,” he says. “The used equipment world goes the same (direction) as the overall market. When the market is strong, people are buying, selling and trading machinery on a daily basis. When the market is slow, cash is king and people don’t want to part with their cash.
“We’ve been busier and have been having more sales per auction this year. Manufacturing is increasing and recovering and is stronger than other sectors. The negative factor is still housing, and people that were holding on and trying to weather the storm have gotten to the breaking point and are no longer able to hold on.”
One such company was McConnell Cabinets in California, a major kitchen cabinet supplier working with the major homebuilders. Loeb Winternitz recently did an auction for this company.
One of the largest recent auctions was at Berkline Benchcraft Holdings LLC, held over three days at four plants in Morristown and Livingston, Tenn. It included 17 Accu-Router Series III CNC panel routers, 20 Gerber CNC cutting systems, MBD CNC panel saws, Holzma panel saws and some 40 sewing machines.
This sale was managed by Myron Bowling Auctioneers Inc. of Ross, Ohio.
“The returns were higher than expected,” says Kevin Gamm of Myron Bowling. “It was well attended, with hundreds of people there. Everything there sold. There was spirited bidding on the routers. Accu-Router was there bidding on them, but most were bought by end users. But what drew the most interest were the sewing machines and and the fiber equipment.”
Are there more auctions this year? “The volume of auctions is probably pretty steady,” Gamm says. “Our revenue this year has been larger. The demand for the equipment has been much higher than it’s been the past few years. There are a lot of bidders, the bidding is spirited, and people need equipment. I don’t know if they need equipment because they’ve gone so many years without replacing equipment, or if their orders are up, or things are turning around. I’m not exactly sure, but customers are coming to the sales to buy equipment now.”
Auction companies handle sales related to plant shutdowns, but also many from companies that may be consolidating, downsizing, or simple selling surplus equipment.
Ready to buy
How should a potential buyer prepare? “Determine their need for equipment, be sure they properly investigate the capabilities of the equipment, do a proper inspection of the machine and make sure it’s up to the requirements they have, Winternitz says. “Buyers need to be educated and research the equipment they want to purchase.”
“Buyers need to do their due diligence on the equipment,” says Gamm. “They could come and do a visual inspection, or bring an engineer before the auction to make sure the machine can deliver the dimensional tolerance and size of component to be made. They could also determine what it would cost to buy that machine new. And they should know what their budget is before starting to bid.”
In addition to learning about the equipment, buyers should understand the terms of sale and have an understanding of what it will cost to bring the machine to their plant.
“They need to understand what the terms of the sale are for each auction,” Winternitz says. “The terms can be relatively generic, but every sale does have specific conditions or requirements, whether it’s related to payment or the amount of time a purchaser is allowed to remove the machinery. If they have a machinery mover they use, they should speak to them to have some idea of the machinery removal costs of the equipment they’re looking to purchase.”
Berkline Benchcraft Holding's plant in Tennessee was closed and a larger amount of equipment auctioned. (Accu-Router photo)
Winternitz says that some buyers have a truck ready, take possession and load the machine up the same day as the auction. Others like to leave the equipment on site and have a crew take it out during the last days removal is allowed. On average, the time between the sale and when a plant is empty may be two to three weeks.
Gamm says customers may pick up equipment after the sale, having wired funds or bringing a certified check to the event.
On-site or not
Buyers have the option of attending a live event, or following it online.
“Some people who bid on the internet will come ahead of time and do the due diligence and then bid from their office,” Gamm says. “Other people are more comfortable standing there bidding at the auction.”
Loeb Winternitz does many online-only sales on the internet. “We also do what we call webcast sales, where we’re live on site but it’s also broadcast over the internet,” Winternitz says. “I feel the buyers on site have an advantage by being able to see the other people in the auction crowd that are bidding. “They also have an advantage of physically seeing the equipment and having a better inspection than people do online."
“A lot of the customers nowadays like to bid from their desktop,” Gamm explains. “You don’t spend a whole day at an auction that way.”
Myron Bowling has auction setup crews that go into the plant and do everything from take the photographs to prepare an auction brochure to lining like items up and cataloging them.
“Our sales crew comes in and conducts the auction,” Gamm says. “We handle all the books and all the accounting. Our people stay behind and supervise the removal. We’re full service.
“We get a lot of deals where we purchase out of the bankruptcy court and there’s no one around, there’s just a set of keys, and we send our guys in there to do everything.”
Winternitz says that Loeb Winternitz can do all the preparation work, but a client may have staff on site to assist us with preparations. Some of the online-only sales have been for one machine for a client. A live auction has to justify the expense and be able to attract buyers to travel to the site.
A small amount of equipment may not justify the cost of an on-site auction, so Myron Bowling would do an online-only auction. “We have people who go out and prepare for the sale, and take photos, and we sell it strictly online,” Gamm says.
“It’s a straightforward and simple process,” Winternitz says. “It’s really being educated on what items you’re going to be bidding on and trying to acquire, and understanding the process. It’s not a complicated process.”