Pros

Detail-oriented - A professional broker will pay extra attention to you in order to ensure you are given the proper equipment. Furthermore an experienced broker can confidently tell you if the price the seller is asking is a fair market value and will work to find the right piece at the right price.

Specialization – Dealers need to carry a wide variety of product in order to appeal to as broad a consumer audience as possible. As a result, while they offer a vast selection, it may not necessarily be a complete one. Dealers need to stay as current as possible, and as time progresses, they are simply unable to keep older stock. This can lead to certain specialized machines becoming hard to find.  This is where a broker can truly shine, as they have an extensive network specifically in place to assist clients in securing that elusive piece of hardware.

Convenience – This may very well be the biggest advantage of using a broker. No matter what your situation may be – perhaps you’re a project manager overseeing a new development or simply an average Joe looking for some new equipment – we are all pressed for time in today’s busy world. A broker helps with this time constraint by putting in the leg work so you don’t have to. Another time saving aspect offered by brokers is the ability to make sure the negotiation process is handled as smoothly and seamlessly as possible.  Doing so allows buyers to get their product and sellers to get their money as soon as possible.

Cons

Expensive Rates – The extensive networking and detail oriented expertise does not come cheap. Many brokers will charge a tiered premium rate. It’s fairly standard to see charges range from 15 percent on items up to $25,000, 12 percent in the $25,000 to $50,000, and 10 percent on machines higher than $50,000. In other words, you can expect to pay anywhere from $3,750 to $5,000 or higher just to the broker.

Site Unseen – While it’s true that brokers may possess an uncanny ability to track down that hard-to-find machine or equipment, many times they do so without having seen the machines themselves. Often these transactions occur across the country, prohibiting any form of inspection without some form of transportation and the associated costs. Vital information such as service records are also unlikely to be researched accordingly.

Lack of Follow-Up Services – Though not absolute, many brokers primarily focus on the selling aspect of the heavy equipment industry. When it comes to things like routine maintenance or repair work, the buyers are left to find their own accommodations – much like the previous post about buying direct.

The Benefits

Knowledge on new equipment – Unless they are a relatively new operation, chances are the staff members on hand will have a large amount of experience to draw upon. It simply makes good business sense to be as knowledgeable as possible on the merchandise up for sale. These trained professionals should be able to answer most any question you may have about a particular piece of equipment. If they get stumped or come up short on an answer, they may be able to utilize the next benefit.

Network for finding solutions – The retail experience relies heavily on networking. Salesmen are trained to establish a connection with their customers and maintain that relationship. They also do the same with various business associates. Should you have a question they cannot answer, they may be able to look to one of their partners to assist in finding the best response possible for you. Also, if you need to replace a part, and the retailer does not have it in stock, they may be able to refer you to a supplier that does. This is a much easier alternative than trying to track down the elusive piece over the internet on your own.

Service after sale – After making the purchase, a retailer may also offer the option of some form of service warranty for your vehicle. This may come in the form of a full or limited warranty to servicing options such as an oil change, transmission flushing, or hydraulics maintenance. Such options are likely not offered when you buy direct. In other words, once you’ve bought it, it’s up to you to either perform routine maintenance yourself or find a place to do it for you.

The Drawbacks

Limited knowledge on used equipment – In stark contrast to the first positive point, the same cannot be said for used equipment. When retailers offer used equipment sales, many of the pieces offered come from previously sold auction lots. As a result, the sales team may not have much time, if any, to learn about their latest acquisitions. They have not spoken with the previous owners and may not be familiar with the service records of the machines.

Mark Up – It’s a simple fact: dealers are in the business to make money. If you purchase a new or used vehicle from a retailer, you can expect to pay a minimum 20-30 percent premium on the unit. Factors that influence these price increases include the salary and benefit packages of employees and the size and cost associated with their lot. These overhead costs are a non-issue with direct sellers, and often the savings are passed on to you as a result.

The positives

Hands-on evaluations: Perhaps it is a bit old-fashioned compared to the modern, computer-based trend of online shopping, but there is something to be said about being able to physically go out and see the item in question up for sale. You can gain a lot of information if you are allowed to go out and “kick the tires” and inspect the vehicle for yourself. Many sellers are likely to allow you full access to the machine and will let you put it through its paces. Consider things like turning it over and getting down and dirty to check for visible signs of damage or oil leaks. The condition of the tires or tracks is also something to take under consideration.

A controlled environment: Auctions from national sellers can best be described as controlled chaos. Vast lots of massive machines need to be sold as quickly as possible. With dozens of auctioneers, staff members, as well as buyers and sellers scattering all over the lot, it can be an intimidating experience. By the time you’ve made up your mind, the lot in question may have already been sold. Last-minute bidders may also swoop in during the final moments and swipe what you thought was a done deal. In comparison to the breakneck pace, meeting a seller directly in a calm, controlled environment will allow you time to carefully consider your decision.

Direct contact: Meeting with a local seller will also allow a timely form of communication, granting you the ability to ask questions and receive prompt answers. Questions you may consider asking include the number of hours on the vehicle and the maintenance records – particularly the oil analysis reports. These reports are similar to blood tests. Much like a doctor can tell a lot about your health based on these results, so too can you or your mechanic gauge the health of the vehicle. It’s in your best interests to try and obtain as many tests as possible. Don’t rely too much on a single test, as the owner may have recently changed the oil to obtain better results.

The negatives

No amenities: Although the owner may be a pleasant enough person, there is no guarantee they are an expert -perhaps they purchased it for a short-term project and are offloading now that the task is done. By comparison, many retailers offer a considerable amount of expertise from their staff at their disposal. Local sellers also may not have an easy-to-find location to keep their equipment, which may cause you an unnecessary amount of travel for a machine you may not even purchase.

Scheduling: Although this entry previously detailed the benefits of meeting face-to-face, there is another factor to consider. Arranging and setting aside a time to meet with someone is often times easier said than done. These days, everyone is fairly busy, and often times what works for one person may not work for the other. The result is time lost waiting to hear back from one party to the other. This drawback is often negated by the dealers and firms, who have staff dedicated to handling the communication process. It’s their job to make sure that all parties involved have clear communication in a timely manner.

Logistics and finance: A local seller has one goal in mind – to sell their vehicle at or around the price they are looking for. Anything else is up to you. The seller will likely not help in obtaining any financial services or transportation. On the other hand many dealers and other firms have strategic partnerships with both lenders and transportation companies and can offer you assistance with those services. These relationships are often long-standing with staffs on both sides working to get you the best deal possible.

One of the more recently appreciated machines on the jobsite today is the mini excavator. The mini excavator sales in the US really did not take off until about ten to fifteen years ago. Other parts of the world were more involved with the mini excavator, especially in Japan. For that reason, one of the first areas that I am critical of when inspecting a mini excavator is, was it even built for the US market? For a few years the coastal regions of the United States were bombarded with imported “grey market” mini excavators, as well as other machines including full size excavators. Aggressive used equipment dealers were able to buy the machines cheap enough to absorb the freight cost, repaint and re-decal the machines and sell them for a profit in the United States. Part one of this report begins with what I look for when I am buying a mini excavator with an emphasis on trying to determine if it is a “grey market machine”.
I am only sharing my experiences, machines are dangerous and anyone can be seriously injured or killed trying to operate them. I don’t start an engine unless I am sure I know how to stop it! I do not try to do the procedures that I describe unless I am very familiar with the operation of the machinery. I do machinery inspections at my own risk, and do many machine checks that are dangerous but with twenty four years of inspecting experience. If I am not familiar with the operation of a machine that needs to be inspected I find someone who is.
The term “grey market” applies to a machine that was brought into the United States by someone other than the manufacturer. The machine was originally sold in another country, or at least intended to be sold new in another country. The used equipment dealer may have had a contact person working in Japan for instance who purchased the machine in Japan, loaded it into a sea container and then brought it to the United States. Then the machine was usually stripped of its foreign language decals, repainted and decaled with the equivalent counterpart decals that may have been for a US designated machine. A person may ask, what is the difference, why would it matter, isn’t an excavator an excavator regardless of where it was designed to be sold? As far as I know, yes, an excavator is an excavator and it is going to dig just like an excavator is supposed to. In theory a grey market machine could even perform better if the engine is not restrained by the same stringent pollution control devises that may be a requirement in the US. However, there are differences that will make it harder to service, (because of a lack of service manuals), performance could be different and parts may be very difficult to come by. Operator safety could be compromised by the lack of guards, roll over protection or safety hydraulic lockout switches.
I recently inspected a “grey market” excavator, the first thing that I noticed was that the machine was different colors than any that I had seen in the USA. Second, it did not have a ‘Certificate of New Construction Machine for Export’ badge or a “CEMA” sticker. The badge is a triangular silver and light green sticker with the machine model and serial number embossed on it. Then I noticed a few other things that were strange in comparison to the similar models sold in the US. The hydraulic controls were not changeable from backhoe to excavator style or SAE and ISO styles, there was no auxiliary hydraulic plumbing in order to attach a hammer or other implement. These are typically standard equipment on US specified machines.
There are other differences, not so obvious, however, just as important. “Grey market” machinery may have no parts listings in the US parts catalogs, acquiring parts may be very difficult if at all. Glass in cabs may not meet the US required safety standards, and emission levels may be outside of what is required in the US. Among the obvious telltale items I look for are foreign language labels. There are many machines that have English and other languages but if there is only another language (with no English), then it was probably not built for the US market. Of course it helps to have a working knowledge of what the machine should look like by comparing it to other like models. An important thing to know but more difficult to figure out is the hydraulic pump configuration. Many grey market machines may have been cheaper because they didn’t have the double or triple section hydraulic pump that is typically used in the US market, thus the performance may be different. In some cases the engine could be different maybe a 2 cylinder instead of a 3 cylinder, again, performance may be different and parts could be a big concern. As more and more stringent emission controls are in place there could be legal ramifications in certain job applications. Typically all mini excavators built for use in the US have an OROPS, (open roll over protection structure), and or EROPS, (enclosed roll over protection structure), Canopy or Cab with a US safety approved plate riveted to one of the structure post. Many of the grey market mini excavators came in with no ROPS or a sun canopy that was supported by a minimum pipe structure. Again, certain jobsites may not allow a machine without the proper OSHA approved protection structure.
Many of the issues that I have stated about the grey market mini excavator can be applied to any machine that could be grey market. The grey market machine may perform well and be fine for the application intended, the items that I have mentioned may help to make an informed decision and less aggravation in the future.
In part two, I will explain the mechanical side of what I look for when I am inspecting a mini excavator.

While demand from contractors has increased, United’s rental rates only improved 2 percent from the second quarter, with rates falling by 1.4 percent when compared to the third quarter of 2009.

On October 21, RSC Holdings Inc. – who supplies mainly industrial equipment and non-residential construction equipment – reported total revenue of $334 million and rental revenue of $292 million, compared with $316 million and $272 million for the third quarter last year.

The change in profitability and margins primarily reflected increased volume, partially offset by lower pricing caused by excess industry fleet levels.

During the third quarter, the company grew rental volume by 11.8 percent compared to the same period last year – the second consecutive quarter of volume growth.

Average fleet utilization increased for the quarter to 68.7 percent, improving from 63.5 percent in the second quarter. RSC’s rental rates improved sequentially for the second consecutive quarter, however rental rates were below the third quarter last year by 4.4 percent.

According to Erik Olsson, president and chief executive officer of RSC, continued investments in sales activities was one aspect that positioned the company to meet increasing demand and gain market share during the third quarter.

In response to growing demand, the company invested $119 million of gross rental capital expenditures. The company also achieved strong growth in fleet on rent – increasing 10 percent during the quarter and 48 percent year to date.

Additionally, RSC sold $69 million of fleet at original equipment cost with margins of 16 percent – up from 15 percent in the second quarter.

If cleared, the assistance will help to patch up Ohio’s $98 billion food and agriculture industry. Of those 79 counties, 38 already qualify as contiguous disaster areas and another 41 are under the primary classification. Ohio Agriculture Director Robert Boggs noted that there are 75,000 farms in the state, with many of those qualifying for disaster relief funds.

The measure was signed by Tom Vilsack, Agriculture Secretary, with a proclamation acknowledging the celebration of more than 29,000 cooperative farms currently under operation in the country. The farming groups have continued to gain in strength and influence in recent years, and their economic impact has bee measured at more than $650 billion every year.

The proclamation noted that cooperatives work together to accomplish a number of activities like buying new and used farm equipment, electricity, and telecommunication services along with producing and marketing crops. The USDA will also be providing $8.3 million in funds through the Rural Cooperative Development Grant Program. The funds will be provided to 27 states and funding opportunities were unveiled earlier this month.

Generally speaking, areas that have a large number of grain farmers are seeing the strongest sales numbers, while dairy farmers don’t seem to be bringing in much new equipment. The strength of the planting season also varied significantly from state to state, leading to large differences in sales numbers by region.
If you’re looking to purchase new or used equipment, keep an eye on the types of farmers in your area. By traveling to a lower volume region, you may be able to eek out a better price for new equipment, such as combines or manure spreaders. Also be sure to gauge the savings of newer technology. In many cases, crop prices and fertilizer costs have gone up, so utilizing GPD technology can help farmers save by avoiding over planting or over fertilizing areas.

The program will provide funding to a number of low-income households throughout the Midwest. Grants will be provided to 163 recipients, with the aim of making repairs to buildings as well as increasing accessibility for disabled individuals. Other services used for the grant will go toward weatherization and other energy efficient projects.

The USDA hopes that the money will help make rural homeowners safer and increase financial stability for struggling farmers who are often forced to put much of their income back into their businesses in an industry that’s developing new technology rapidly.

The Associated Press recently reported that a program in New York will rebate a large percentage of the costs for upgrading used tractors with installing roll bars and seat belts. The program is also expected to expand to other Northeastern states like Pennsylvania and Vermont. New Hampshire is a potential candidate as well.

According to the program terms, used tractor owners can have up to 70 percent of the equipment upgrade costs reimbursed. That can lead to savings of as much as $765. The program also provides a toll-free number to find out the type of safety equipment that matches a farmer’s particular machine. Many insurance companies have contributed to the cause, with the Cooperative Insurance Companies of Middlebury donating $45,000 to the upgrade program in Vermont. Be sure to check with your local government office for further details.