3 Steps to an Effective Asset Disposal Program for Your Mining and Construction Surplus

effective asset disposal program

Step 1: Understand Your Surplus Assets and the Market

The first step of effective asset disposal is to understand what your assets are worth and the target audience they’re likely to attract. This information will help you determine your strategy for selling and redeploying surplus.

Enlist a trusted valuation partner

Consider enlisting a trusted valuation partner to appraise your assets. Knowing the value of your surplus will help you set appropriate recovery expectations. Since the most valuable 20% of equipment generally brings in 80% of the total recovery value, it’s important to identify these assets. Selling high-value, late-model equipment first, will generate maximum return to your bottom line.

Understand the market for your surplus.

A 20-year-old conventional crawler and a five-year-old hydraulic all-terrain crawler will attract different types of buyers. The condition of your assets will also determine which buyers are interested. While equipment in good condition can be sold directly to an end user or small or mid-sized business, equipment that has not been well-maintained might be better suited for a distributor that can repair it before resale. Even if your equipment is only salvage quality, you can still usually find international buyers who will purchase it for parts.

Focus on international buyers

Focusing on international buyers is an excellent opportunity to expand the market for your surplus. Additionally, assets that are near-obsolete in your region might be in high demand in developing countries. However, selling surplus in international markets provides both opportunities and challenges. To save on logistic and export expenses, prioritise international markets that are geographically closer to you.

Step 2: Adhere to Best Practices for Selling Surplus Assets

Surplus equipment and other assets that have value and cannot be redeployed should be sold in the secondary market. Liquidity Services SA adheres to these best practices and will ensure you maximise recovery:

  1. Determine sales channel(s): Auctions and make an offer sales (previously private treaties) are both highly effective methods. A make an offer sale, which focuses on a select group of prospective buyers, is the preferred sales method for specialised assets. Auctions are preferred for general assets with high demand. An asset disposal partner will determine the appropriate sales channel(s) based on your assets, buyer base, location, anticipated interest, and other factors.
  2. Implement a targeted marketing strategy: Your buyer base will vary depending on the condition, age, and location of your assets. Identify your target buyers, determine the best channels to reach them (email marketing, social media, trade shows, etc.), and craft targeted communications designed to attract their attention.
  3. Schedule a preview period: Allowing potential buyers to inspect your assets in person will help them feel confident the assets meet their needs, increasing their interest and bidding.
  4. Provide complete asset information: If you’re selling surplus online, be sure to include detailed descriptions and compelling pictures to whet buyer interest.
  5. Designate a removal timeline: Ensure a smooth removal process by defining and clearly communicating expectations for when assets should be removed.
  6. Screen all buyers before sale: To ensure your assets are not sold to individuals who are illicit or unreliable, remember to screen all buyers in advance. A trusted asset management partner can screen your buyers against restricted-party lists and verify their identity and credit information.

Step 3: Select a Trusted Asset Management Partner

Assess whether your high-performance surplus program should be managed by an in-house team or outside partner. Dealing with surplus mining and construction equipment adds stress and takes time away from core business activities.

Often the best choice is to work with a trusted partner, Like Liquidity Services SA, that specialises in providing solutions for surplus assets. Here are top qualities to look for in a surplus asset disposal provider:

  1. An extensive knowledge of the secondary market and the mining and construction industry.
  2. An excellent reputation within your industry.
  3. A proven history of successfully working with organisations in your industry.
  4. Transparent reporting on all aspects of your program.
  5. Account managers who are experienced, knowledgeable, and accessible.
  6. A scalable, flexible operating platform that can adapt to future needs.
  7. Metrics and marketing strategy best practices leveraged to optimise return.
  8. An extensive, global buyer base and an understanding of local markets.
  9. A wide range of asset disposal services.
  10. The ability to support your sustainability programs.

Conclusion

Forward-thinking mining and construction companies are taking a more proactive role in their surplus asset management, turning this area into a high-performing business unit. By understanding your assets and the secondary market, adhering to best practices for reselling these assets, and partnering with an expert surplus asset management provider, your organisation can transform your surplus mining and construction equipment into a value-added opportunity that fuels achievement of your strategic goals.

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