Role of the Internet in the Construction
Equipment Business:
Virtually
everyone who's selling used equipment-from auctioneers to equipment
dealers to rental firm-advertises
that equipment on the World Wide Web. For all of those businesses, the Web site
has become an indispensable tool to reach prospective buyers.
It
is very easy, for example, to bring to your screen all of the Cat 416 loader-backhoes
for an upcoming Ritchie Bros. auction in Houston, TX. For most individual machines,
the listing includes the make, model, serial number, and basic attachments that
are included, such as a hoe bucket or a loader bucket. Naturally, no price is
listed; that's decided at auction.
"The
Web site is a critical tool for us," states Armstrong. "We attract people
from around the world to our sales. We get 2,000 visitors per day to our Web site,
and the average time spent on the site is 11 minutes per visitor. Our site is
updated every day with equipment to be sold."
Is
Ritchie Bros. selling equipment on the Web, with the machines unseen by buyers?
Not really, but you can submit an absentee bid through the Web site and Ritchie
Bros. will, in effect, bid for you. If you submit $120,000 as an absentee bid
for a machine and the bidding stops at $75,000, you've bought it for $75,000,
explains Armstrong. Ritchie accepts absentee bids in two ways-on-line or by fax.
With absentee bids, a deposit is required. Armstrong also encourages absentee
bidders to send a representative to the auction site to inspect the equipment
at issue.
"Our
ultimate goal is to allow people to bid on-line in real time at our auctions,"
says Armstrong, but the company has no time frame attached to that goal. "We
still believe in live auctions," he adds.
AED
has been operating its Machine Mart for about two years, says Matt DiIorio, vice
president of marketing. The Mart is a marketing service offered to AED's members
at no extra charge. And now AED is opening up the Mart to others and will charge
them nominal fees to advertise their equipment. As of the end of 1999, AED had
equipment listed for a total of $833 million-plus. DiIorio estimates that by the
end of the first quarter of 2000, the total will surpass $1 billion.
With
the Machine Mart you can search all of North America for the equipment you want or you can narrow
your search by manufacturer, product category, price, and year(s) made. A search
by this reporter, for example, brought to the screen 11 wheel loaders across the
country, selling for prices ranging from $8,000 for a 1967 Michigan 175 to $1.5
million for a Cat 994HL.
If
you're shopping by price, the Machine Mart can bring up comparative price information
at the touch of a finger. "You can narrow down your list a lot faster than
by calling 20 dealers," DiIorio points out. "The Machine Mart gives
the customer access to the specific piece of equipment he needs when he needs
it."
Quite
often, the Machine Mart serves as a beginning tool for a distributor who's looking
to sell used machines but doesn't have his own Web site. Once the distributor
becomes familiar with the value of the Machine Mart, he can put up his own Web
site and list equipment there.
DiIorio
says the two sites can work in tandem to maximize exposure for a distributor's
used equipment. In fact, AED will create Web sites for member dealers. "Even
if we have not created a member's Web site, we will [move] equipment information
from Machine Mart to their Web site and vice versa. The e-commerce marketplace
believes that critical mass of information is king, so that's what we try to achieve."
He estimates that 80% of AED dealers have their own Web sites and that a good
percentage of those advertise used equipment on their sites.
So
it has developed that as more and more used equipment is available for sale, the
Internet has come along to help that equipment reach its next destination.
Both
buyers and sellers can only benefit from the increased exposure that the Web offers.
Buyers
benefit because they can quickly shop price and to some extent can learn
the details of each machine, and sellers benefit because they gain exposure to
a greater number of buyers, which ultimately has to improve prices received.
Originally
written by By Dan Brown
