Equipment auctioning goes omnichannel
Ritchie Bros. is transcending markets by combining local onsite auctions with online bidding and marketing them to a global audience
Since conducting its first Middle East auction in 1997 at its Jebel Ali Free Zone site, Ritchie Bros. has expanded its offerings to attract worldwide participation in its onsite and online auctions. The company’s recent unreserved auction event held in Dubai on 8–9 May featured over 1500 heavy equipment items and attracted 840 onsite and online bidders from 70 countries. The largest number of bidders were from the UAE, USA and Canada. With regard to equipment purchases, the top three countries were UAE, Saudi Arabia and Ghana.
Unreserved auctions have been a staple of the Ritchie Bros. business for more than 50 years. They remain popular because they ensure certainty of sales. At an unreserved auction, also called a no-reserve auction or absolute auction, there are no minimum bids or reserve prices on the items sold. Only the bidders set the prices, not the seller or the auction company. The price entirely depends on the bidders and the demand they have for the items.
Karl Werner, president-international, Ritchie Bros.
According to Karl Werner, president-international, Ritchie Bros., unreserved auctions continue to attract customers because they create a fair market for both buyers and sellers.
“At reserved auctions, there’s a possibility that a reserve price on an item will not be met by bidders and the item goes back to the seller, or it needs to be relisted and offered again at another auction. At unreserved auctions, both buyers and sellers have the certainty that items will be sold as there are no reserves,” says Werner.
A noteworthy aspect of the Dubai auction event was the participation of a diverse international audience of dealers and end users. Online bidders comprised over 53% (450) of the total 840 bidders. The ease of participating in live onsite auctions happening anywhere in world through an online platform has helped increase bidder registrations during the past few years.
Ritchie Bros. sees this trend proliferating in the future as equipment buyers and sellers seek more choice and reach through multichannel trading platforms. In response, Ritchie Bros. is positioning itself as a global asset management and disposition company that offers end-to-end solutions for buying and selling used heavy equipment, trucks and other assets.
Werner indicates that the company’s strategy is to transcend markets through its multichannel platforms and asset management services.
“Our job as an auction company is to promote the event and the items to attract competition from as many onsite and online bidders as possible. So, we combine local onsite auctions with online bidding and market them to a global audience. For example, our live onsite auctions in Dubai attract online bidders from North America, Europe and Asia, regularly. The advantage of involving buyers worldwide is that it helps stabilise prices and create market liquidity,” says Werner.
The transition from a traditional auctioneer to an online and offline service provider began in 2002 when live online bidding via rbauction.com was introduced. Another major step in this direction was the launch of a completely renewed rbauction.com in 2010, featuring equipment search in 21 languages and online bidding in seven languages. In 2014, Ritchie Bros. launched EquipmentOne.com, an online marketplace. From 2016-17, the company acquired Mascus, an online equipment listing service, and IronPlanet, an online auctioneer and marketplace for used heavy equipment. After Ritchie Bros. acquired IronPlanet, IronPlanet’s Daily Marketplace and Ritchie Bros.’ EquipmentOne merged into a new brand called Marketplace-E.
IronPlanet is an online auctioneer and marketplace for used heavy equipment
“As part of our growth strategy, we are complementing our onsite unreserved auctions and online-only auctions with a one-stop shop platform where customers can buy, sell or list equipment, when, how and where they choose, both onsite and online,” says Werner.
At present, Ritchie Bros. offers three main buying and selling channels: Ritchie Bros. Auctioneers which organises live onsite unreserved auctions combined with online bidding; IronPlanet, an online, unreserved auction held monthly; and Marketplace-E, an online marketplace offering multiple price and timing options.
Monthly online auctions on IronPlanet offer bidding in advance on the days before or live bidding on the auction day itself. Marketplace-E, a reserved online marketplace, offers three options: (1) make an offer: list equipment online and let potential buyers submit offers, then negotiate with potential buyers to reach an agreement; (2) buy now: list equipment online at a fixed, buy-it-now price like a basic ecommerce transaction. Once the item is purchased, the listing is closed; and (3) online auction with a reserve price: an online listing sold in an auction with a minimum price. The item will not sell until the reserve is met. The seller minimum is protected, but the potential highest selling price is not capped.
“For customers who need more control over the selling price and process of their assets, these options provide increased control over price, location, and timing for sellers and access to more equipment and immediate purchase options for buyers,” says Werner.
The company has started augmenting its multi-channel selling solutions through asset management services. Ritchie Bros. also works with large companies to provide a cloud-based solution for redeployment of assets within their organisations or sale of surplus assets to third parties.
“Our asset management services will help fleet owners to sell when they want, how they want and where they want through our multiple selling channels with flexible options, hands-on local service and global marketing. We also offer full-service door-to-door logistics and shipping solutions,” says Werner.
Looking forward to the next Dubai auction in 2018, Werner says the Middle East remains a strong growth market despite its cyclical nature.
“Since 2014, we’ve seen steady double-digit growth in the Middle East in terms of gross transaction value (GTV). Investment in new equipment has been affected by low oil prices as well as long OEM lead times and delivery delays due to which there a shortage of new equipment in the market. These factors have increased the value of used equipment. We are now equipped with all the tools and channels to further accelerate used equipment trading in this region,” says Werner.