Fashions may come and go, but Yoder & Frey has been holding equipment auctions since suits and hats were still high on the list of business attire.
While much of the world is bracing against the mid-winter blues, Kissimmee, Fla., gives heavy construction equipment buyers and sellers an excuse to shed their winter coats and head to the key state, all in the name of business. A handful of auctioneers assemble tens of thousands of pieces of new and used equipment to be auctioned off over the course of three consecutive weeks at separate auction locations. Think of it as the construction industry’s version of Daytona Speed weeks without any yellow flags.
One, Two, Three, Four
First on the schedule from Jan. 31 to Feb. 7 is the most recent auction house to join the tradition: Alex Lyon & Son Sales Managers and Auctioneers Inc.
“We’re the first auction every year,” Jack Lyon, president, said proudly. “Last year we auctioned 9,000 lots in nine days.”
Lyon credited some of his success to the company’s reputation for good equipment and the fact that they’ve been in the same location for 60 years (previously as livestock dealers), allowing them to establish personal relationships with their customers.
“We bump into people everywhere; they know us.”
The family-owned operation, still located in Bridgeport, N.Y., with 11 other offices throughout the United States, began participating in the Florida auctions in 1994.
“It’s an event!”
Next up is Yoder & Frey Auctioneers Inc., from Feb. 8 to 16. “We did the first Florida auction at Orlando,” Peter Clark, president, recalled. That was in 1975.
“We thought it was a good thing to get people coming to Disney, so we scheduled it during cold weather. We were trend setters.”
In business since 1964 and holding its annual Kissimmee auction for 36 years, Yoder & Frey had lot numbers reaching to nearly 14,000 last year, with approximately 10,000 pieces of heavy construction equipment, trucks and trailers sold to buyers from every state and more than 40 countries, as well as to online bidders.
A new player will join the field this year on Feb. 19: Manheim Auction Co. Known as a remarketing firm for vehicles, Jerry North, equipment director for heavy truck and equipment, said Manheim was practically “forced” to go beyond those boundaries when customers kept bringing heavy-duty Class 7 and 8 trucks to them.
Expanding its line to include a specialty division to handle RVs, boats, motorcycles, heavy trucks and other equipment, North thought joining the “February mayhem” was the perfect way to establish a name in this new realm. He said interest has been good already and he anticipated handling 300 consignments. He believes consignors and buyers will be impressed with Manheim’s attention to detail, professionalism and ratio of bidders to pieces. North was particularly excited to be a part of the Florida auctions because they “draw people from all over the world. There’s such a mixture of buyers.”
Last but not least, Ritchie Bros. Auctioneers will wrap things up with its event from Feb. 15 to 19. One of the world’s largest industrial auctioneers in business for more than 50 years, Ritchie Bros. began participating in the Florida auctions in 1984. From its Vancouver, B.C., headquarters, Kim Schulz, manager of corporate communications, said Florida is “a great location for the customers to travel to” — and they do. Last year, more than 6,000 bidders from 71 countries attended the unreserved auction, the largest industrial auction in the world and Ritchie Bros.’ largest, raking in $190 million.
“It’s a good time of year to go to Florida,” Schulz said.
Bidding, Near and Far
A lot of people agree with Schulz.
“Customers come from all over the U.S.,” said Lyon. “Dealers, rental companies, contractors…”
Live auctions account for roughly $3 billion in sales annually, according to the National Auctioneers Association, with sales dipping only one percent since 2007, despite a struggling economy.
Many people in the trade attend, including Ed McKeon, founder and CEO of Construction Equipment Guide, who has seen the annual Florida auctions substantially grow over the years. “I’m probably one of the few people around who’ve been around this event from the beginning,” he said.
The way the Florida auctions began, he recalled, was in the late 1960s when Yoder & Frey would hold a sale on a Friday in January in Jacksonville. Then, the now defunct Forke Brothers would hold a sale the following Monday in Tampa.
“The crowd from Yoder & Frey’s auction would stay the weekend to have a little mini vacation with the family and then go to Forke’s auction on Monday,” McKeon said.
But Disney World’s opening in 1971 changed everything. Yoder & Frey moved its sale from Jacksonville to International Drive in Orlando while Forke Brothers moved its sale from Tampa to Kissimmee — both trying to capitalize on what clearly was going to be a winter vacation Mecca for tourists (and contractors) around the country. It wasn’t long before other auction companies entered the fray in Florida. Soon, contractors and used equipment dealers from around the United States would trek to sunny and significantly warmer Florida to take in a few auctions with their friends and families and perhaps play a little golf and maybe even stop by Disney World to make the kids happy.
“Disney World was like an elastic band, pulling people to the auctions and of course, to the resort,” said Ed McKeon. “I just watched the Florida auctions grow and grow and grow as a result, becoming a weeklong event. I’d come down to Florida from Pennsylvania, go to the auctions in the morning and play golf with my friends and customers in the afternoon. It was a lot of fun,”
Another member of Construction Equipment Guide’s staff, sales representative Kent Hogeboom, also has been attending the Florida auctions for quite a while, the first time 20 years ago.
“A major winter snowstorm had hit the area near my home in upstate New York,” he recalled. “The night before I was to leave, I really did not think I was going to be able to make it to the airport, but in the morning the roads had cleared enough that I gave it a try.”
Arriving at the airport with just minutes to spare but without his briefcase, which contained his ticket, he had to purchase a new ticket to get there.
Overcoming a series of challenges related to the forgotten briefcase, Hogeboom at last showed up at the Yoder & Frey sale, then held on Poinciana Boulevard just south of Route 192 in Kissimmee.
“People had tried to prepare me for the magnitude of the sale, but I still had not fully comprehended just how big the event was. Thousands of pieces of construction equipment of every size and shape [extended] as far as I could see and I kept reminding myself that this was only one of the three sales being held.”
Hitching a ride in a bucket truck that lifted him 50-60 feet in the air so he could get a photo of the scene, he said that even with a wide-angle lens, a single photo could capture only a small fraction of all the equipment there.
“Since then, I have only missed one or two of the February Florida auction events,” Hogeboom said. “When you are in our line of work, dealing every day with people responsible for buying and selling construction equipment, Florida is the place to be.”
Buyers and sellers alike consider it time well spent. In fact, Lyon expected even more buyers this year, due to the economy.
“People can’t afford new, but there’s a lot of good equipment coming to the market because of the economy.”
Clark estimated that 6,000 to 7,000 attended Yoder & Frey’s auction last year and expected similar numbers again this year.
“People come from all over the world,” Schulz said. Lyon echoed her observation, adding that the Florida auctions have the “biggest international flavor in the world.” He attributes the increasing number of international buyers to Kissimmee’s proximity to ports, making it convenient to ship out newly purchased equipment.
The location is good for shipping, Clark concurred. His son Justin, also of Yoder & Frey, added that it can be less costly for buyers to fly in, purchase equipment at the auction and have it shipped home than to buy the equipment in their home country.
It helps to be bilingual, Hogeboom noted.
“Every year it seems as though more of the crowd is made up of international buyers.”
Aware of that trend, Yoder & Frey has three interpreters on-site.
“Latin American buyers used to send brokers because of the language barrier and the currency issues,” Clark explained. “But now, they come to buy directly. We have a lot of overseas buyers from Latin America, Asia, the Middle East and Australia. About 35 percent of the equipment auctioned went out of the country last year.”
Although attendance is phenomenal, it isn’t mandatory. As Lyon explained, due to real-time bidding on the Internet, buyers can participate from anywhere in the world. He estimated that 20 percent of his bidders — and 20 percent of his sales — come from the Internet. A new system he recently added allows online bidders to see numerous photos of the items for sale, although he said they are always welcome to send people in advance of the auction to pre-inspect equipment on the lot.
Schulz mentioned one regular customer from Australia who spends about one week going to the different auction sites to inspect the equipment before the auctions, then goes home to bid online, which he does after work at night in his part of the world.
Ritchie Bros. started online bidding in 2002 and it now comprises roughly 25 percent of its total sales, or more than $2.5 billion since it began. At last year’s auction, it had 6,000 registered bidders, including online bidders. Schulz said opening it up to include online bidders increased participation because of its convenience, but insists it “will never replace being there in person.”
“Auctions are exciting,” Chris Longly, deputy director of the Kansas-based National Auctioneers Association told the Birmingham News. “Auctions draw people; it’s the ultimate reality television.”
Much Ado About the Weather
“You can always count on huge crowds of people and thousands of pieces of equipment” at the Florida auctions, Hogeboom said. “What you can never count on is the weather in February in central Florida. It’s not unusual to see icicles hanging from the orange trees the first thing in the morning,” he marveled, “but by mid-day, you find yourself putting some sunscreen on and then find yourself jumping in the pool, provided that it’s heated, at the end of the day.”
He claimed he doesn’t really mind the temperature swings because it’s at least forty degrees warmer in Florida than back home in upstate New York.
If it’s always 40 degrees warmer, there must have been a very cold winter in New York when temperatures dipped to a low in the 40s at the auction one year. Fortunately, Schulz said with relief, Ritchie Bros. has a “great facility.”
Its theatre-style auction building features doors that open at the front, allowing the equipment to be driven around so bidders can see it in running condition. In inclement weather, the doors can be closed and bidding can continue in dry, heated — or air-conditioned, as the case may be — comfort.
Schulz remembered the 1993 hurricanes as a trying time for the auction. Luckily, she added, although its building was damaged, the equipment in the yard was unscathed.
But perhaps the most challenging weather events during the auctions have been during the El Niño years, when Florida gets drenched “beyond your wildest imagination,” according to Hogeboom.
“One year there was several inches of rain every single day for most of the month of February and a couple of the sales sites had turned into shallow lakes. The usual traffic jam of golf carts turned into a huge problem because most of them got stuck shortly after being unloaded. The mud was so deep that the sales trailers were stuck most of the time. If they weren’t stuck, inevitably a golf cart was — and was most likely blocking its path. Eventually,” he continued, “the only solution to moving the sales truck from consignment to consignment was hitching it up to a bulldozer and pulling it.”
Hot or cold, the atmosphere is always sunny, due to the tone set by the people in charge. Of all his many memories of this event over the years, the thing that has impressed Hogeboom the most has been “watching three industry greats who really know how to work a crowd: Dave Ritchie, founder of Ritchie Bros.; Jack Lyon, president of Alex Lyon & Son; and Peter Clark, president of Yoder & Frey Auctioneers. All three of these men have made it their business to know every major contractor, equipment dealer, used equipment manager and large rental fleet owner in the industry — and they know them all by name. And they probably know the names of their wives and children. They have built decades-worth of personal relationships with all of our industry’s movers and shakers, which is why they are at the very top of their game.”
Something for Everyone
“If you have it,” Lyon boasted, “we’ll sell it.” He said that 95 percent of what’s up for bid is construction equipment, but as a former livestock dealer, it’s not surprising to see him include cows in the Florida event. However, from time to time a few unexpected items have appeared before the gavel, including $100,000 exotic muscle cars and a complete operating quarry.
While not uncommon to see trucks and trailers, Hogeboom was in awe of “one of the funkiest collections of customized golf carts and ATVs you will ever see” at both the Lyon and Yoder & Frey auctions that included conversion kits to make golf carts and ATVs look like everything from a ’57 Chevy, John Deere tractor and bulldozer to a B-52 Bomber.
“It almost seems to be a contest among the attendees to make their vehicles stand out. One of the coolest things showed up last year: a brand new Hummer that had been painted to look like a Cat D-6,” Hogeboom said.
Yoder & Frey relegate some of the non-construction lots to “specialty row,” where items such as boats, motor homes, airplanes and motorcycles can be found. Ritchie Bros. also sells recreational vehicles, motor homes and manlifts, but Schulz said the most unusual item it sold at the auction was a helicopter, which went for $410,000. Its most expensive auctioned item was an 888 EPIC Manitowoc crawler crane weighing 230 tons (208 t). It sold in 2008 for $1.2 million.
Despite such staggering sums, bargains can be found.
“There are always deals,” Clark insisted. “Not everything goes high.”
Whatever the price, Ritchie Bros. auctions are unreserved.
“Every item is being sold to the highest bidder, regardless of the price,” Schulz emphasized. “That levels the playing field.”
Leveling it even more, the auctions are public so everyone can take part. Whether or not everyone bids, the pre-season event draws a crowd.
“Some people use it as an opportunity for a meet and greet with customers,” Schulz observed.
Joe McKeon, CEG Midwest publisher, said it’s a great way to do business, especially if you’re from the north and want to escape the cold. So many of his sales reps attend, he will hold “mini” regional sales meetings. He considered it a good opportunity to see people and a great way to network, even if you have no intention of bidding. But, he warned, don’t be surprised if by the time you leave, you’ve become a buyer.
Hogeboom will use the auctions as a backdrop for socializing with clients and customers, from the legendary after-the-sale parties to outside excursions, such as group trips to the Daytona 500, just a little more than an hour from Orlando. The two events seem to be mutually attractive; Schulz has noticed “some NASCAR people” in the auction crowds.
“Some people come just to mingle and check prices,” Schulz continued. “It’s a global market.”
Justin Clark, with Yoder & Frey, believed the three auctions collectively set the prices for the upcoming year.
“Prices may be five to 15 percent higher here than at regular auctions, but this sets the cap.”
Joe McKeon doesn’t necessarily agree that the auctions are a good gauge of prices. Supporting him is Jack Granger, of Granger Thagard, who said, “Rule Number One is that something is worth only what someone will pay for it.” However, he considered auctions a “price-discovery mechanism with an added benefit: They bring the market to the seller at a moment in time when the market is ready to buy. The most important secret is that buyers in this economy do not want to be sold to. They want to buy and that is the role of auctions.”
In fact, the live auction industry sold more than $268 billion in 2008, according to NAA, which also reported that 97 percent of attendees think auctions are “fun” and 83 percent believe auctions offer an opportunity to get items for good value. Taking the numbers and his experience into consideration, Lyon believed the Florida auctions are more valuable than ever.
“It’s become a retail market.”
Sizing Up the Season
In addition to setting the bar on prices, the Florida auctions can indicate trends. Equipment extras were the big thing last year as buyers looked for added value. Last year. Clark said, rubber-tire loaders were popular and that machines with enclosed cabs and 4WD sold better. Justin added that excavators with hydraulics and “quick-tach” buckets and forks, dozers with rippers and winches, and loader backhoes with long reach sold well.
The auctions also provide a great platform to launch new services and items. Last year, Ritchie Bros. unveiled new orange uniforms. This year, they have other surprises in store.
“This is a big event,” Schulz reiterated “It gives us an opportunity to talk about new things, such as our online shipping service.”
The key to the success of this multifaceted event, Clark believed, is that it kicks off the season. Contractors can buy the equipment they need for the year and have it up and running at their location in time for a full season of work.
Many sellers also are buyers. As Schulz said, the auctions give contractors an incentive to re-evaluate their fleets and either fill in gaps or get rid of under-used machines. Idle assets aren’t cost-effective.
“They don’t like to see equipment sit idle on the lot, so they’ll sell it.”
Or, as Lyon pointed out, “if they need cash quickly,” the auction is a good venue.
Although Lyon believed more is being sold at auction than ever, Clark said supply is down. He also thinks demand is up — and that the scarcity of equipment will translate into better prices. Last year, it was a buyer’s market. This year, that market may be a little more favorable to the seller. Either way, Clark said, “We’re looking forward to a good year.”
“There’s lots of work out there now. The economy is starting to pick up in some regions. People need equipment.”
If they need equipment, Florida is the place to be.