Optimize your time and profits
The used machine tool and equipment market within the United States currently totals a whopping $77 billion annually. It is projected to grow nearly 6% in the upcoming year, largely driven by the ongoing shortage of new CNC machines.
Given the high demand for used machines, it is a great time to take advantage of the opportunity to sell your used CNC machines and equipment either professionally or as a one-off. But how to go about the sale and what method is best suited to each shop owner are questions that many people are unsure of.
Everyone is looking to achieve the same goals:
1. Get the best price possible for their machine
2. Secure a sale as quickly as possible
But with so many options available, how should you choose the transaction type or partner to enable success? The following considerations will help you to move forward confidently.
WHAT OPTIONS ARE AVAILABLE TO SELL USED CNC MACHINES AND EQUIPMENT?
Considering the pros and cons of the options to sell CNC tools – CNC milling machines, CNC lathes, CNC machining centers, EDM machines, and Swiss lathes - will allow sellers to select the right transaction type for their needs.
The most common methods for selling used CNC machines include:
- Self-marketing and selling
- 3rd party auction
- Dealers, brokers, and resellers
- Discount sale to a dealer
- Commission sale via a service provider (i.e., a dealer or broker)
Self-Marketing and Selling
Many sellers choose to market and sell their used CNC machines and equipment themselves. They can notify their personal or professional network directly, list the machine on their company’s website, or list it on an online marketplace.
There often is a significant investment of time and effort to market used machines or equipment through a personal or professional network.
The seller is responsible for establishing a competitive price, connecting with interested buyers, negotiating and closing the deal, providing and preparing required sales documents, securing payments, and facilitating the logistics of shipping the equipment.
They also must organize and consolidate the various leads and opportunities they are chasing through the various communication channels. On the upside, for this effort, the seller is rewarded with 100% of the sales price. This method can, however, prove difficult for busy shop owners.
A useful alternative is to list their used CNC machines on an online industry marketplace that provides the necessary tools to complete transaction workflows and reach the target CNC audience.
With a minimal investment, the seller reaches a larger audience of people with a defined interest in used CNC equipment, often has access to sales documents and payment platforms to facilitate the deal, and gains access to standardized logistics support.
The cost is often offset by the amount of time saved, increased sales price, and peace of mind that comes with the support provided by the marketplace.
3rd Party Auctions
Auction options include both offline and online auction models. Auctions can be a great option for selling both single machines or multiple lots, or factory setups.
The auctioneer or auction house utilizes its existing network and marketing assets to bring together a group of interested buyers, potentially creating a competitive environment.
They often have established networks and subscribers that they can effectively communicate with via email marketing and social media marketing. An additional benefit is that a seller can better predict when a machine will be sold.
The costs of listing a machine with an auctioneer or auction house vary greatly. The number of potential buyers an auction house can attract is also variable. Therefore, it is important to do your research ahead of time.
More recently, auction models within online marketplaces have gained in popularity. Online auctions can be a good choice for sellers seeking the benefits of an auction at a potentially lower cost.
They also can potentially reach a broader audience which can result in higher demand. As with traditional auctions, these platforms vary in terms of their benefits and features as well as cost structures.
It is important to note that auctions risk failure to achieve the minimum price set by the seller. Sellers must also fully understand the costs and fee structures associated with the 3rd party auction entity. A bit of upfront research into the auction house’s track record and customer reviews is recommended.
Dealers, Brokers, and Resellers
Resellers purchase CNC machines and other industrial equipment outright and then market them to end users. The seller sacrifices a portion of the potential profit to save time and effort by forgoing a complex sale.
To ensure the seller receives a fair price for their used equipment, it often is suggested that they secure more than one offer for the machine.
Another option is to enlist the help of a dealer or broker that specializes in the sale of used CNC machines on a commission basis. These commissions can either be variable based on the actual sales price or a fixed amount.
The services that will be provided, such as marketing, securing payments, and logistics, as well as how any expenses will be shared, should be agreed on ahead of time. The length of the agreement and protocol for commission payments for sales that occur outside of the dealer or broker’s activities should also be discussed.
Making Your Choice
Now that you understand the available resources, you can confidently determine the costs associated with each transaction type. After determining the profit you need to achieve from the sale and the time and resources you have available, you can make the right decision for your shop.