Consigned equipment can have enormous benefits on your bottom line, as well as the overall performance and reliability of your fleet in general.
While it certainly is nice to sport a whole fleet of brand-new construction vehicles and equipment, this simply isn't a viable option for many companies. This is especially true for young or startup businesses, which may be trying to minimize their upfront costs as much as possible.
In cases like this, consigned equipment can actually have enormous benefits on your bottom line, as well as the overall performance and reliability of your fleet in general.
Be Sure to Ask the Right Questions
Regardless of how attractive a consignment deal may be, it's still important to ask the right questions before settling on a price. Inquiries about the previous usage, repairs or replacement parts and the remaining life expectancy of the equipment are all legitimate questions, but don't forget to ask about any warranties, either from the dealer or the consignment shop themselves. If the shop offers no warranty or return policy whatsoever, the risk might not be worth the price they're asking.
Some may want to inquire about the consignment shop's history, as well. If they've sold equipment under a different business name, this could be a red flag. If this is the case, don't hesitate to ask for specific details regarding their past business, their products and their reputation. There's no reason to take a risk on a shady dealer when there are plenty of legitimate and reputable consignment shops out there.
A Plethora of Options
Most consignment shops offer a plethora of options when it comes to used and pre-owned construction equipment. Whereas you might have to visit several different dealerships to find the newest and most advanced model available, consignment shops give customers the luxury of being able to browse different merchandise all in one place.
Furthermore, some consignment shops may be able to locate specific machinery on your behalf, either through another location or via a consignment partnership. Rather common, such partnerships provide a vast network of resources for consignment shops to call on when needed.
If you don't see a certain vehicle or machine at your local consignment dealer, don't hesitate to ask the owner. They'll typically be able to source the equipment more quickly and efficiently than you can.
Relying on Consignment Inspections
Some consignment inspections guarantee that the equipment is in working order before it even hits the sales lot. Another benefit of purchasing consignment equipment to supplement your fleet is that the inspection phase can actually identify and correct some issues before they even become a problem.
Not only does this reduce equipment downtime, but it could also prevent a serious injury from happening during the operation of the machinery.
Selling Your Own Equipment for Consignment
Just as there are a number of benefits to purchasing consigned equipment for your own fleet, there are also some advantages to putting up your own used equipment for consignment. Because the depreciation rates of used construction equipment are relatively stable, especially compared to those of brand-new equipment, you're more likely to recoup your money — or at least a large portion of it — when it comes time to sell.
Consignment shops can also save sellers a great deal of time. Sure, you can place advertisements online and in your local newspaper to try and sell your equipment, but these tactics tend to be hit-or-miss. Instead, companies who utilize consignment shops to sell off their unwanted inventory are able to invest their time and resources into other areas of operation. To this extent, consignment shops can actually help you maintain your productivity over a long-term basis.
In some cases, a consignment shop might even accept your own used equipment as a partial trade. This type of deal can benefit both yourself and the owner of the consignment shop, as you'll receive a significant discount while they'll be able to better maintain their own inventory levels.
Integrating Consignment Equipment into Your Construction Fleet
Although there may be a certain amount of stigma attached to consigned equipment, there are a number of real advantages to purchasing and operating pre-owned equipment in your construction fleet. Lower costs, enhanced reliability and greater productivity can all be realized by diligently researching and utilizing consignment equipment in your construction fleet.