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Online Buying and Selling Via the Internet Attracts Users of Construction Equipment and Heavy Trucks

scorbett — Sun, 01 Apr 2007 10:41:00 GMT

Online opportunities abound in today's market for buying and selling construction equipment — but old-fashioned due diligence is still required

April 1, 2007

By Walt Moore, Senior Editor

Eight years ago, René Bates, owner of René Bates Auctioneers in McKinney, Texas, casually wondered if he could use the Internet to dispose of vehicles left over from a live auction. To test the idea, he developed an easy-to-use online bidding system. It worked. Last year he conducted 475 online auctions for municipalities, utility companies and governmental agencies that were disposing of used equipment. Early this year, Bates handled an online auction for Dallas-Fort Worth Airport, and at the time, he told us that visits (lookers and bidders) to the auction website were averaging an amazing 900,000 per day.

No denying that the phenomenon of online buying — and selling — via the Internet is attracting more and more attention. For some individuals and businesses, buying and selling online is a practice as natural as breathing. Others, however, are somewhat skeptical of the process — distrustful, perhaps, of the electronics involved or the unseen humans at the other end of the electronics.

No matter which camp you might be in as a buyer of construction equipment and heavy trucks, you have ample online opportunities these days — if you choose to use them — for investigating and purchasing everything from welders, air compressors and light towers, to skid-steers, pavers and gooseneck trailers. And increasingly, it seems, potential buyers are using these online sources.

For example, according to Nakkia Gray, general manager of EquipmentTraderOnline.com, a website used by both dealers and private sellers to advertise equipment, the site averages 200,000 visitors per month, and these potential buyers conduct some 760,000 product searches among the more than 40,000 items typically available. Because the sale of equipment advertised on the website is handled privately between buyers and sellers, no actual sales figures are available, but the number of traceable e-mail and phone inquiries from potential buyers to dealers is significant, says Gray.

In some instances, though, sales of equipment from online sources can be tracked, and the numbers are impressive. For instance, according to Rob Alleger, chief executive officer of IronPlanet, an online auction company specializing in construction equipment and heavy trucks, sales range from 600 to 1,200 units per month (depending on the time of year), and dollar volume on those sales may range from $12 to $20 million.

Contractors increasingly are using the Internet to research and purchase equipment, says Chester Hagen, vice president of sales for Point2 Technologies, which created on "online marketplace" (UsedIron.com) in 1996. Much of the research is done in the evenings or on weekends, says Hagen, either directly on dealer websites or via listing-aggregation sites, which collect listings from multiple websites. UsedIron.com, says Hagen, each day generates around 10,000 detailed views, each representing a potential buyer who has viewed information for a specific machine.

"Contractors are demanding rich content in the form of more photos, descriptions, conditions and details," says Hagen. "And sellers who provide this content can expect to receive more inquiries than those who use fewer photos and less information. The ease of use, speed and accessibility [of online research and buying] have changed this business forever."

So, if you're interested in buying (or just investigating) construction equipment and heavy trucks online, you can go at it in a number of ways. We contacted a selection of online buying resources (some responded, others didn't) and assembled a sample of available services. The list is not intended to be all-inclusive, nor does mention of a particular service indicate endorsement by CE.

And we'll take the liberty up front of passing on a bit of advice offered by nearly everyone we contacted: Use good judgment when buying and selling machines online. Perhaps Point2 Technologies' Hagen says it best: "Buying equipment online should be done with the same due diligence as buying offline."

BuyerZone.com

If you want to do comparison-shopping and, at the same time, potentially encourage competition among possible suppliers, you might try BuyerZone.com. Owned by Construction Equipment's parent company, Reed Business Information, BuyerZone.com is a free service designed to connect the buyer with a number of qualified suppliers.

For example, by clicking the Industrial heading on BuyerZone's home page, and then on Backhoe-Loaders, you bring up a short questionnaire that helps detail the machine you're considering — for example, New or Used? Application? Dig Depth? Financing Preferences?

When you submit the questionnaire, you create a Request For Quote (RFQ) in the Buyer-Zone system, which immediately matches your information with as many as six backhoe-loader suppliers within a practical distance of your zip-code area. Since these suppliers are paying BuyerZone to receive your RFQ, and since they know they're competing with other suppliers, they typically respond quickly by phone or e-mail. From that point on, you evaluate what you hear and do business with your chosen supplier.

eBay

On the other hand, if you like the prospect of landing a deal at an auction, plenty of online action is available.

For example, Tony Quarrick, president of Quarrick Equipment & Auctioneers in Uniontown, Penn., conducts live auctions for his clients, many of whom are construction-equipment dealers. But for selling his own inventory, he relies increasingly on an electronic auction service, eBay. During the past five years, Quarrick has sold nearly 500 pieces on eBay, and he now has one employee whose full-time job is to answer questions from prospective online buyers, arrange for buyers to inspect equipment, and assist with shipping.

Quarrick sets no reserve on the items he places on eBay, that is, he doesn't require that a minimum price be met before he sells, agreeing instead to sell to the highest bidder. In fact, he sets ridiculously low opening bids, for example, $99 for a recently offered Toro Dingomini-skid loader. Low initial bids and the lack of a reserve, he says, stimulate aggressive bidding.

"I won't deny that we've lost money on a few deals," he says, "but the bottom line is that we make money."

IronPlanet

But, if you're hesitant to buy from an auction website that sells everything from tubas to trenchers, other online auctions specialize in equipment.

IronPlanet, for example, is an online auction service that conducts "featured auctions" every other Thursday. Machines in featured auctions are offered on an unreserved basis (Iron Planet does, however, set the opening bid) and are typically "on the block" for five to 10 minutes. You're advised of the auction date and time when you preview an item. If buyers can't be online at the time of the auction, they can submit an online PriorityBid, which allows IronPlanet to bid on their behalf.

IronPlanet has achieved a measure of distinction in the online marketplace with its inspection reports, which detail the condition of machines for sale. The reports, available well in advance of the auction date, are compiled, says the company, by a team of more than 350 experienced inspectors who use standard evaluation forms to assess machine condition at the seller's location.

If buyers find machine condition to be other than represented in the inspection report, the company's IronClad Assurance program provides recourse. IronPlanet also handles the transfer of funds and machine title between buyer and seller.

Ritchie Bros.

While some online auctions are electronic only, those conducted by Ritchie Bros. are adjuncts to selected live auctions, meaning that online bidders are competing with bidders at the live auction. Items are offered on an unreserved basis ("as is, where is, on sale day"), and all potential buyers are welcome to inspect items at the live-auction site prior to sale day.

The company's rbauctionBid-Live system allows online participants "to see an image of the machine on the block, to hear the auctioneer call out bids and to place bids." When online bidders have activated the "Bid" button on their computer screen, the dollar amount displayed is the current asking price for the selected item, and clicking the button submits the bid. If the bid is the first to reach the central servers, it is forwarded to the auctioneer. By submitting an online "proxy bid" prior to the auction, buyers allow Ritchie Bros. to bid on their behalf. Winning bidders must abide by the company's terms and conditions regarding payment.

AssetLine.com

Although we couldn't find a North American contact for AssetLine.com, an online auction service, we include the company here, because it seems to have a significant international presence. If you're a contractor needing to secure and place equipment in various parts of the world, this website and its online bidding system might be worth investigating. Registered bidders have access to detailed machine-condition reports.

UsedIron.com

Among the listing-aggregation websites, which bring buyers and sellers together to transact business on their own, is Point2 Technologies' UsedIron.com. According to vice president of sales, Chester Hagen, machine listings on UsedIron.com originate from a number of sources, including dealers using the company's Point2 MANAGER inventory-management system; contractors (who may advertise up to five machines free of charge on the site); and syndication partners, such as online auction services and other listing-aggregation sites looking for additional exposure.

"UsedIron employs a proprietary monitoring system for all Free UsedIron Premium Ads [those placed by end-users] to eliminate fraudulent sellers," says Hagen, "and to keep data accurate and reputable for buyers on the site."

MachineMart

MachineMart presents an inventory of used machines available in the inventories of North American equipment dealers who are members of the Associated Equipment Dealers (AED). The website's home page presents a list of the top 10 machine categories (by frequency of search), and clicking on a category brings up a complete list of machines available, noting make, model, price, year of manufacture and state location. Subsequently clicking on Details presents a general description of the machine's condition (often with photos) and contact information.

Or, the site visitor can browse by manufacturer and, again, the home page presents a list of the top 10 manufacturers by frequency of search. Statistics recently presented on the site advertised that 97 AED distributors, doing business in 350 locations, were offering nearly 8,300 machines for sale.

EquipmentTraderOnline.com

EquipmentTraderOnline.com lists items in such categories as earthmoving, lifting, concrete, attachments and trailers. Visitors to the site can search by machine type, manufacturer, state or zip code/specified distance criteria, and an advanced-search feature narrows selections by such categories as specific model and price range. Once the potential buyer pulls up the listing for a specific machine, complete seller contact information is available.

According to general manager, Nakkia Gray, the company uses an advertisement-verification process to help protect both buyers and sellers from fraudulent activity, plus it maintains a security center (www.traderonlinesecurity.com) to address potential seller (and buyer) scams.

CatUsed.com

The inventory on the CatUsed.com website is primarily used equipment, parts and attachments available from Caterpillar dealers. The prospective buyer can search generally by product type or manufacturer, but can potentially narrow the search by specifying exact models and geographical locations, as well as selecting a range for year of manufacture, hour-meter reading and price.

The listing provides a summary that details the unit's features and notes its price, general location, hour-meter reading, and a rating of its overall condition. If potential buyers want to further investigate a machine, they are encouraged to first select a Caterpillar dealer close to their location. Cat's logic is apparently to help the buyer establish a relationship with a nearby dealer, who can work with the machine-owning dealer to arrange the sale and who can provide product support after the sale. Caterpillar promotes the integrity of the Cat Used.com system by saying it is based on the stellar reputation of Cat Dealers.

MachineryTrader.com

According to MachineryTrader.com, its website features a continuously updated database of equipment, parts and attachments for sale directly from dealer inventories. The site also allows investigating rental sources and auction results. Machine listings typically include serial number, hour-meter reading, price, name and location of the selling dealer and a general description of the machine and its condition.

MachineryTrader.com is international in scope, but according to the company's Chuck Lewis, North America is its core market. The company's website listings are extensive, having, for example, more than 40,000 units in just seven major earthmoving categories. Activity on the site continues to increase, says Lewis, but he cautions (as do most online services bringing buyers and sellers together) that buyers must do their homework, including, if the situation warrants, traveling to inspect the machine.

Crane Network

Crane Network was created in 1998 and specializes in online crane sales, in which buyers deal directly with sellers. The number of units listed typically is around 2,000, ranging from small truck-mounted units to rough terrains to towers. According to the company, the site has an estimated 30,000 visitors per month. Listings typically include photos, basic machine information, and seller contact information.

Point2 Technologies Inc. - Prairie Programmers Find Their Niche

scorbett — Sat, 17 Jun 2006 16:36:00 GMT

The Regina Leader Post

Where is the most advanced real estate software developed? Not in hot real estate markets like Calgary or Vancouver. Not in high tech hotbeds like Ottawa or Toronto. Each month, a Saskatoon-based technology company signs up thousands of new customers to its real estate software, constantly sending to new heights a monster client base that today stands at 76,000 Realtors® from 77 countries around the world. From their start in e-commerce software for the heavy equipment industry, to their current rise in the real estate market, Point2 Technologies Inc. is becoming known as a leader in technology solutions that enable buying and selling over the Internet.

Point2 started in 1996, when current CEO Wendell Willick, his brother Barry and three friends saw an opportunity. The group knew the expanding Internet was an ideal venue to enable buying and selling of used mining equipment around the world. Steady positive growth enabled the company to constantly improve its services and technology. In 2001, Point2 licensed its software to Caterpillar Inc. The agreement granted the world’s largest heavy equipment manufacturer the rights to use Point2’s technology to power its global used equipment dealer network. This partnership facilitated the development of more innovative technology, including techniques for compressing and storing data and pictures required to describe the products for sale online.

In 2001, Point2 recognized an opportunity to apply its technology in the real estate market. “People shopping for equipment online need pictures and descriptions. We saw the parallels in real estate, a huge market with substantial growth potential for our business,” explains Willick. Point2 did their homework. They learned how buyers and sellers interact, as well as the role of the broker and the agent. They tested their products in the field and incorporated their lessons before taking the product to market. The company created Point2 Agent, a product supported by leading edge technology, but is extremely simple to use — a winning combination.

Where has this led? First, what started out in spare rooms in Ottawa and Saskatoon has grown into an organization that employs over 80 people in its Saskatoon headquarters, and a regional office based in Vancouver, British Columbia. Each year, the company enables the management and sale of several billion dollars worth of used equipment, through over 300 dealerships worldwide. Point2’s real estate software empowers tens of thousands of Realtors® around the world every day with leading edge tools to effectively market their services on the Internet.

Wendell Willick is confident about the future of the company: “We’re working on new projects all the time.” Most of the financing for development and expansion has, to date, come from Point2’s existing revenue and profits. To help fund growth, Point2’s management has also taken advantage of technology development programs such as those offered by the National Research Council Canada — Industrial Research Assistance Program. Point2 involves all its staff members in its growth, with 15% of the company owned by employees. With a bright future ahead, Point2 management’s vision and investments already seem to be paying off.

GE Capital To Be Exclusive Financing Provider for Point2's Heavy Equipment Marketplace - Point2.com

scorbett — Thu, 11 Jan 2001 18:54:00 GMT

STAMFORD, Conn.--(BUSINESS WIRE)--Jan. 11, 2001

GE Capital announced today a marketing agreement with Point2 Technologies heavy equipment marketplace at Point2.com (http://www.point2.com).

GE Capital, the financial services unit of General Electric Company will serve as Point2's exclusive financing provider. Under the alliance, Point2.com's 6,000 daily users will have access to the diverse array of financial products and services offered by seven GE Capital businesses through GE Trucking (http://www.getrucking.com) and GE CFO Solutions (http://www.gecfo.com) - GE's newest finance portals.

By forging this alliance with Point2 we're providing their customers, buyers, dealers and manufacturers of heavy equipment with access to flexible financial solutions,'' says Steve Poole, General Manager of GE Capital's B2B Portal Initiative. ``Users simply enter a few pieces of information and our configurators do all the work - matching their needs with viable financing options.''

GETrucking.com was launched in October and offers a comprehensive selection of financial and service solutions for companies' transportation needs. GECFO.com was launched in November and helps busy CFO and financial executives find financial products, services, research and information.

Founded in 1996, Point2 Technologies has quickly become a leading heavy equipment marketplace on the Internet. Point2 was recently named the #1 e-business in Canada by a Bain and Company study sponsored by Canada's national newspaper, The Globe and Mail. Point2 designs proprietary, patent-pending Internet software for heavy equipment manufacturers such as Caterpillar, John Deere, Komatsu, Case, Hitachi and Volvo. Over 70 global heavy equipment companies at more than 350 branch locations across North America and Europe, rely on Point2 software to power their e-business.

GE Capital, with assets of more than US$345 billion, is a global, diversified financial services company with 28 specialized businesses. A wholly-owned subsidiary of General Electric Company, GE Capital, based in Stamford, CT, provides equipment management, mid-market and specialized financing, specialty insurance and a variety of consumer services, such as car leasing, and credit cards, to businesses and individuals around the world. GE is a diversified services, technology and manufacturing company with operations worldwide.

Contact:

GE Capital, Stamford
Marcy Brucellaria, 203/961-2281
marcy.brucellaria@gecapital.com

Beyond Numbers -- September 2000 Point2.Com Takes dot-com World To New Heights

scorbett — Fri, 01 Sep 2000 18:53:00 GMT

After topping the charts at number 1 in a recent Toronto Globe and Mail - published survey of the 200 most successful e-businesses in Canada, the Saskatoon-based brother team, Wendell and Barry Willick, are taking the dot-com business to new heights.

Being recognized as the No. 1 best managed and most promising "dot-com" company in all of Canada was an honor for the Willick brothers who say this is something they will remember for the rest of their lives.

"To stand out from our competitors in the dynamic dot-com world is a real tribute and reward to the hard work, diligence and vision that we and our entire team have shared since going into business a few years ago," adds the brothers.

When the brother team identified an opportunity to use the Internet to connect buyers and sellers of heavy equipment, Point2.com was founded in the fall of 1996. As development proceeded, Willick and Willick realized that the technology could be pushed further, allowing sellers to leverage their data to produce many marketing opportunities.

The Point2 Heavy Equipment System is a user-friendly Internet interface software application that enables users to maintain and coordinate inventory, sales and marketing and can be accessed and maintained from anywhere in the world.

Wendell Willick, CEO, says as he tried to introduce the listing service to heavy equipment dealers, he realized that most of them were not technologically savvy. "Most of these people were not zooming around the Internet. To have them use the Internet to plug in data, take photos with digital camera, resize them and then save as a compressed format so it wouldn't be too big to send over the Internet, was too much to ask for," says Willick.

Wendell and his brother Barry Willick, President, knew the only way they were going to make their online business work was if they developed software applications that simplified the work for their clients and that's precisely what the brothers did.

It didn't take long for the business to take flight. "All of a sudden we became a development house of world-wide heavy equipment applications that helped non-technical people interface with the Internet," Willick explains.

"Barry is an incredible programmer. He was really the original architect of our technology and he was the one who put all the grunt work into the programming and did a fabulous job at it," Willick (Wendell) enthuses.

Willick says most clients utilizing the software application are U.S. companies with $100 to $200 million dollars in revenues. These companies include heavy equipment giants such as Holt Company of Texas, Hoss Equipment Co., and RDO Equipment Co.

In addition, Willick notes they have also licensed their technology into a new sector to be used in the emergency vehicle re-sell market. "This is actually a co-venture as the licensing agreement stipulates we receive 25 per cent of the company. This is a great example of how our software application can be used in other vertical markets," says Willick (Wendell).

The Idea
In 1993, long before the Internet was thriving, Willick kicked back with a mining friend over a couple of beers. That's when the idea hit him: there's money to be made with the re-sell of heavy equipment. "My friend, who was a senior executive for a mining company in Manitoba, was telling me that a mine he knew of was shutting down and they were just leaving millions of dollars worth of mining equipment in the ground. There was no other use for it locally and they didn't know how to market it," says Willick.

Willick (Wendell), an entrepreneur living in Saskatoon, spoke with his brother Barry, an Ottawa-based computer programmer, about the possibility of using computer technology to move this equipment. But the technology simply wasn't there at the time.

With innovations in technology, the brothers discussed the possibilities again, and in 1996 Point2 Internet Systems was born. The Willicks formed a partnership with three other men, including Wendell's mining friend, and two others from the forestry and agriculture industries. Point2 Internet Systems was the first company ever to do online auctions of heavy equipment.

"Although Point2.Com is not the only exchange that auctions heavy equipment today," says Willick, "we established a strong presence in the niche before the emergence of serious competition, and we are well ahead of the game. When it comes to inventory, sales and marketing management and the interface technology, we don't see anyone coming close to us quickly."

Point2 currently employs 25 full-time professionals in two locations. Head office is located in Saskatoon, with a sales office in Vancouver. More than half of their employees are systems development professionals.

MNP and Point2 Get Wired
As the business grew, the partners saw the need for a highly qualified CA firm and people who had the vision and expertise to guide us them through their rapid business expansion process. MNP, particularly Peter Clark, had initially provided Willick with services in the past, so the choice was obvious. Saskatoon MNP partners Les Wall, CA and Les Cannam, CA, quickly joined the team.

"The initial services MNP rendered for the company dealt with assistance with incorporation, design and implementation of accounting systems, CCRA registrations, year end un-audited financial statements, personal and corporate tax planning and corporate tax returns, along with ongoing weekly business consulting advice on a number of different issues," adds Cannam.

And Willick says that Wall and Cannam have been instrumental in assisting the firm to reach new heights.

"They helped us with the preparation of a substantial business plan and financing proposal to take our firm to the market, assisted us with the negotiation and deal structuring process with interested investors to optimize tax and financing strategies, reviewed and recommended changes to all legal documents before execution and prepared various interim audited financial statements to comply with the SEC regulations related to international reporting," says Willick.

As for the future, The Point2 Heavy Equipment Systems has also captured the attention of the European market. "We've started to sell our system in Europe and have a couple of major clients already," says Willick, who adds that they are now hiring some people in Europe to further enhance their market share.

Willick concludes, "Our business partnership with MNP has been exceptional and we would not be where we are today without their continued ongoing expertise."

Meyers Norris Penny Publications, Beyond Numbers, September 2000.