WHEN you hear the word ‘auction’, images of excited auctioneers whipping crowds into a frenzy and competing bidders tensely going head to head in a packed room for a prized possession spring to mind.
While such events do still occur, the Internet is giving rise to a new generation of auction houses.
Dutch-headquartered Troostwijk hosts over 2,000 online auctions globally every year in a number of sectors including food machinery, agricultural kit and metal working machines.
The B2B auction house is now targeting the UK construction equipment market. The firm’s first foray into the UK plant market earlier this year was a roaring success and plans are now afoot to host one online plant machinery auction every month.
Traditionally, finding the right buyer to purchase used machines has proved a challenging and time-consuming task for many plant companies, who rely on selling used equipment to help with the important process of replenishing and upgrading fleets.
Graeme Weir, UK sales director for Troostwijk, believes the potential of online plant auctions in this country is enormous, backed up by the fact more than £500,000 worth of machines were sold in the first UK auction, held in March. That was despite the fact they started out with no registered UK bidders. Instead, buoyed by the weak pound and quality of equipment, foreign bidders were snapping up a wide range of plant from excavators to compressors.
Troostwijk auctions are reserved, which means that unlike traditional auctions whereby the sale item goes to the highest bidder regardless of what they’ve bid, sellers can demand a minimum price. If that isn’t met, the seller can walk away and is still in control of the sale.
Graeme, who lives in Bridge of Weir and previously worked for auction specialist Ritchie Bros, told Project Plant, “What was happened in the past 18 months is people are now inclined to go to viewing days, take a look at the stuff, and then because of the advent of online bidding, rather than hanging around an auction site all day in the hope of trying to get a digger, they go back to their work and bid online while they’re actually going about their day-to-day business.
“With traditional auctions, there’s less and less people actually attending the auctions while they’re running.
“We’re a reserved auction. At a traditional unreserved auction, if you take a digger along and it only sells for £5,000 when you wanted £15,000, it’s too late; it’s gone. You run the risk of selling your assets for less than you anticipated.”
Graeme described Troostwijk as a “real alternative” to some of the other auctioneers that have been involved in the UK plant industry for a number of years, citing the size of the firm’s global database as providing plant companies with an impressive number of potential buyers.
“We’ve been in the UK for seven years but not in construction,” Graeme added. “We’ve mainly concentrated on the food side of the business. The strongest part of the business in mainland Europe is agriculture and construction, so they thought if they could do that there, why can’t they do it elsewhere? We do have a pedigree for it.
“We’d no UK-registered bidders (prior to the first plant auction). Every single machine went abroad. We had a bulldozer going to Peru, a crusher to France, a compressor to Belgium. This is all driven by the weak pound, and because we’ve got such a huge database.”
Graeme described the advantages of online auctions as including access to the right buyers from all over the world and the fact there are no delivery charges because the machines don’t physically leave the seller’s yard. Troostwijk makes its money by charging a ‘buyer’s premium’ for any machines sold. The benefits for buyers include convenience and the fact Troostwijk can arrange viewing days as well as handling all the invoice and export declarations.
With only six UK-based employees, Graeme was keen to emphasise the importance of the personal touch as the business grows in this part of the world. Customers can pick up the phone and speak to him directly about any issues concerning the process.
“We’re very lean and efficient,” he added. “We’re agile and hungry for business. If someone called me today and said they had a package of machines they wanted to sell, we could have a sale online within a couple of days, we could have the auction going live within ten days, closing ten days after that, with the money going into their bank account potentially the following week.”
Graeme sees particular scope for growth amongst Scottish customers due to the lack of risk involved in selling machines via Troostwijk. “I’ve always found the further north you go in the UK, the more considered the person is when it comes to money,” Graeme explained. “If you stay in central Scotland, you could get up on a Saturday morning, walk the length of Braehead and spend £100 without ever realising it. If you stay north of Inverness, they know the value of a pound. They wake up on a Saturday with £100 and by Saturday night they’ve still got it. The further north you go, the more ‘canny’ people are, to quote a good Scottish word. Let’s face it, everyone likes something for nothing. In essence, we’re selling their machines for nothing. We’re actually paying them for selling it. There’s zero risk involved, which really appeals to a Scottish audience.
“At a previous job, I had senior figures in major organisations asking me what would happen if their machine only sold for a pound. All I could do was shrug my shoulders and say it wouldn’t, and then keep my fingers crossed. Whereas this time we give them the peace of mind that if they want to sell their digger for £25,000, we’ll put a reserve on it for £25,000. If it doesn’t sell, we will go to the highest bidder and try to negotiate on behalf of the seller as well, so we could go back to the customer and say the highest bidder will pay £23,000 – do you want to accept it? We’ll bend over backwards to try and help people.”
Graeme has already received excellent feedback from customers north of the border, including from Sweeney Plant Hire who profited from the sale of a JCB 3CX. “Pat Sweeney told me he wanted £24,000 for it,” Graeme explained. “The machine was ten-years-old but had low hours. I spoke to a trader about it and he reckoned it was worth between £15,000 and £18,000. We ended up selling that for £24,750.
“That’s why we believe that everything has value. We see the potential, the true value of a good. Not only here and now, but also on the other side of the world.
“People are just needing an alternative. Prior to Troostwijk coming along, the only alternative was to use your local auction, but you don’t get the buyers (that we provide), you don’t get the global reach. Now we are a serious alternative to the traditional auctions.”
Looking to the future, Graeme sees the potential to replicate what is happening on the food side of the business, whereby customers can get involved in ‘dealer direct sales’, where they receive iPads and do their own cataloguing and photography. Troostwijk simply provides a support function and monitors the listings to make sure the images are of good quality and the specifications are correct.
Troostwijk was founded 90 years ago and started life as a traditional auction house. Today the website receives 1.5 million visits every month and is available in 15 languages. Their combined online auctions attract some four million bids per year from over 130 countries. Troostwijk joined forces last year with a company called BVA, making the overall operation the largest online auction company in Europe for B2B.
To support growth plans in the UK, Graeme has appointed former Hill Engineering Scottish sales manager Ross Fairweather as an account manager and has also taken on a trainee account manager.
“Dave Ritchie used to say it’s not about closing deals, it’s about opening relationships,” Graeme said. “I’m a firm believer in that. What I want Ross to do is add value wherever he can. I know him, his dad and his brother are all highly regarded in the plant industry. For me, I really just want to see him excel, which I’m sure he will do. I’ll give him all the help and support to make sure that he can.
“Years ago, I worked for Sir Peter Vardy. What he always said was that on someone’s first day, he wanted them to rush home to tell their families it’s the greatest decision (to join the business) they’d ever made. Sometimes I think that’s a wee bit lost now in big organisations. I think it’s important that the company actually appreciates and values the people who choose to come and work for them.
“I’ve also employed a 19-year-old trainee account manager called Jack Manley. I started him a fortnight ago and within four days he’d signed up his first lot of machines. I had a gut feeling about him and it’s paid off. I’ve got a gut feeling about Ross too.”
For Graeme, his career has always involved dealing with auctions one way or another, starting at the age of 21 when he opened his own pawnbrokers in Glasgow. “I was always buying and selling jewellery at auctions. From there I stumbled into the motor trade. I was latterly a manager within the Mercedes-Benz network in the west of Scotland.
“I was always buying and selling jewellery at auctions. From there I stumbled into the motor trade. I was latterly a manager within the Mercedes-Benz network in the west of Scotland. A big part of my job there was buying stock for the used-car departments.
“In 2008 the world turned upside down, which gave me a chance to look for a Monday to Friday job and spend more time with my family. I started working for Hilti, the power tools specialist. That’s where I learned to be a travelling salesman, which I am. Long story short, I was then contacted and asked if I’d be interested in joining Ritchie Bros. I enjoyed working with them, but I really enjoy what I’m doing now. I love it. I actually really enjoy dealing with people. I’m a salesman. I was talking to a guy last week, a very successful businessman, and he still calls himself a salesman. So many people now call themselves account managers or product specialists, but the reality is everything’s got to be sold and I’m not embarrassed to say it – I’m a salesman.”
