Article Written By: Clayton Arnold
Owning assets can be costly, but is a required cost to operate a business. Often, such acquisitions are financed by debt and expensed over a 3 to 10-year period, depending on the asset’s nature. When planning for an asset purchase, the organization considers how the assets will be used in order to generate the most revenue. Once an asset has reached end of life or is deemed surplus to ongoing operations, businesses should look to maximize the value of these industrial assets by putting it through an asset recovery strategy.
Selling this old and surplus equipment is an excellent way for organizations to maximize the remaining value of their assets and allows them to add the proceeds from the sale directly to the organization’s bottom line. However, selling used industrial assets is more challenging than you might believe. The following post will discuss several key considerations you must consider before deciding to sell your used industrial assets.
Business needs are constantly changing. One week a production line may be operating at full capacity; the next week it could be shut down depending on several factors that are not always under the organization’s control. Once the production line is shut down and the assets are deemed surplus, companies make look to sell their industrial assets. When looking to sell your used industrial assets, it is important to consider what the business needs, both long term, and short term. If a production line is operating at a minimum capacity it might be better to shift production to another line and sell the used assets from that line to help fund another project.
Equipment, plants, and machines are always being updated to improve efficiency and reduce downtime. Some technological changes are so substantial that they make the older version of those assets obsolete. Also, the Original Equipment Manufacturer (OEM) might decide to stop making and selling a certain type of equipment. It can be hard to find parts for replacement or qualified people to train operators. In some cases, it might be necessary to sell this machinery or equipment if the technology has changed so much that the old equipment is no longer useful.
When looking to sell used industrial assets, it’s important to consider other usage cases or utilities for the assets. Generic equipment or assets can be used for multiple different purposes across your facility, whereas specialized equipment that performs only one task can often not be reused for other tasks without serious upgrades. You should only look to sell items that cannot be used for other purposes or that are surplus to operations.
An item has a “design life”. If they’re properly cared for and used, they can easily outlast their design life and keep running for a longer time with only minor changes. Thus, the age of the asset is one of the most important things to consider; if the asset is no longer useful, selling it should be considered.
When selling used industrial assets, condition plays a big factor. Like new assets will always retain the highest recovery value. If the equipment is properly maintained and is in working condition, you are much more likely to get a higher return compared to an asset that has not been taken care of.
Aucto is a web-based platform that enables enterprises to recover value from their used and surplus industrial assets. We connect our sellers with over 250,000+ verified buyers looking to source used and surplus equipment in over 70+ countries.
To learn more about selling used industrial assets on the Aucto Marketplace click the link below to book a meeting with one of our asset recovery specialists or call us at (844) 326-7305.
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