It’s no secret that used equipment sales have been strong on the back of supply-chain issues. In fact, according to Off-Highway Research, global equipment sales hit unprecedented levels in 2021, and they suggest that demand will remain strong as manufacturers continue to struggle to fulfill their order backlogs.
For business owners and operators with used equipment to sell, this increased demand along with the potential of an increased return on pre-owned machinery is enough to take pause and consider all selling options.
In the past, where a seller might have been torn between a quick, hassle-free sale at auction versus the conventional sale by owner, today, consignment is growing in popularity because it offers the best of both worlds to the seller—less work, more return, and full control.
Control is especially important considering modern-day supply-chain constraints. Consigning equipment with a credible dealer not only improves a machine’s exposure, but also allows the seller to put the machine back into the field while selling and sourcing a replacement. This degree of flexibility isn’t available when selling with an auction house. In this case, the machine is often kept in holding until sale so that the auction company can confirm equipment condition and reduce liability. Similarly, sale by owner puts the onus on the equipment owner to prioritize parking a machine to maintain its condition or to risk a reduced price by using it. In a consignment scenario, it’s understood that there will be some variability. This is why larger dealers not only provide accurate and ongoing market assessments, but also guarantee the condition of the equipment should the owner decide to use it throughout the process.
With that in mind, equally as important as verifying the condition of equipment is making sure that the conditions of the sale are agreed upon upfront with the dealer. It’s because of these important details that most sellers have a misguided view of how consignment works.
So, to erase any concerns, let’s outline what consignment is and how it works.
Consignment is an arrangement where an item is placed in the care of another until purchased by a buyer. For example, let’s say you want to sell your used D-Series Skid Steer Loader and want to consider consignment. In this case, you might take the piece to your local Cat dealer, who offers to sell it for you at their dealership. You would become the consignor and your dealer would become the agent without any exchange of ownership or money until the skid steer is purchased. At this point, you would receive the proceeds of the sale, minus an agreed-upon consignment fee that compensates the dealer as your seller.
Although this process may require a bit of patience, ultimately, you‘ll be able to have more flexibility while being able to fetch a better price by leveraging the expertise of a credible dealer and avoid leaving your sale to chance at auction.
Three Main Advantages of Consigning Your Equipment with Finning:
- You remain in control.
As your Cat equipment expert, we’ll perform a free market-based evaluation so that you can make an informed decision on your sell price. It’s your choice. From here, we’ll define selling terms and, if needed, you can even keep your machine if it’s required to run your business. If you want Finning to inventory the machine during the consignment process, we guarantee that it’s kept in the condition it was received or you’ll get your money back—it’s a part of our Customer Service Commitment.
- Broaden your buyer pool.
Selling privately limits your reach and selling at auction reduces your time on the market. Consignment is an in-between method that utilizes a dealer’s network to make sure that full value is realized at the time of sale. As Cat’s largest dealer, Finning has the most extensive global network of Cat buyers and sellers. Specifically, the Finning e-newsletter is a direct line to thousands of inboxes every month. We’ll have opportunities to add your machine to our used equipment inventory, highlight your machine in our digital channels, and increase your reach through our advertising partners to maximize your return.
- Leave the selling to us.
In addition to our wide network of buyers and sellers, we also have one of the largest equipment sales teams across a variety of industries. We’ll be able to treat your machines just like one for sale on our dealer lot, with the added incentive of highly visible equipment yards. Our sales teams know the process in and out and have service programs that can offer assurance to prospective buyers, including one of the most comprehensive Customer Value Agreements in the industry.
A Personalized Approach to Selling Pre-Owned
Now is as good of a time as ever to consider selling your used equipment. Some construction equipment segments have seen a 50% increase in list price from 2020 until now. It has become almost too lucrative to sell pre-owned equipment, which prompts the decision to consider consolidating or upgrading equipment fleets.
Finning has a large inventory of new and certified pre-owned equipment for the owner or operator looking to pivot from their current machine. So, when you’re ready, consider consigning your next piece with Finning. Our Cat equipment experts are a call away.
Finning is the world's largest Caterpillar dealer, selling, renting and providing parts and service for equipment and engines to customers across diverse industries, including mining, construction, petroleum, forestry and a wide range of power systems applications. We operate in Western Canada, South America, and UK and Ireland.