Selling used machinery is a common practice for many enterprise manufacturers looking to upgrade their equipment or optimize their operations. For supply chain professionals and facility managers, the ability to quickly sell used industrial surplus helps speed up operations, improving KPIs.
This guide provides a detailed overview of the steps involved in selling used machinery, best practices for maximizing value, and key considerations to keep in mind.
Understanding the Market for Used Machinery
The demand for used machinery often comes from small to medium-sized manufacturers who prefer buying pre-owned equipment to cut costs. MRO procurement professionals at enterprise manufacturers are also increasingly looking to purchase used machinery to limit their Purchase Price Variance (PPV) and to address critical shortages. Additionally, overseas markets can be lucrative, as businesses in developing countries seek to acquire affordable industrial machinery to expand their operations.
The challenge when selling your own used industrial machinery is that connecting to those end users is time-consuming and risky. Typically, sales run through middle-men such as distributors, liquidators, and specialized brokers who have the right contacts to resell used machinery.
Core Steps to Sell Used Machinery
Prepare Your Machinery for Sale
To attract buyers, ensure the machinery is presented in the best possible condition. Key preparation steps include:
- Cleaning the Equipment: A clean machine gives a better first impression and can increase perceived value.
- Performing Minor Repairs: Fixing small issues can make the equipment more appealing to buyers.
- Repainting or Refurbishing: This can give the machinery a "like-new" appearance, which may justify a higher price.
Properly preparing your machinery can be the difference between a quick sale and a drawn-out negotiation. Buyers look for cleanliness in photos when they’re first presented with an opportunity – not just of the machine, but of the facility as a whole. If you can demonstrate that you keep your machine and your facility clean, then they’ll trust that you run a professional operation that keeps its equipment in good working order. That seemingly small tell can make a big difference in your ultimate value capture.
Evaluate the Condition of Your Equipment
Before listing any machinery for sale, thoroughly evaluate its condition. Buyers want to know the age, usage history, maintenance records, and any repairs or upgrades. The following steps can help you accurately assess the equipment:
- Inspect for Wear and Tear: Identify any signs of damage or wear that could affect performance.
- Check the Service History: Maintenance logs provide insight into the care the equipment has received.
- Test Functionality: If possible, conduct a performance test to verify the machine is in good working condition.
The condition of the machinery will significantly influence the asking price and determine whether refurbishment is necessary before selling. You must make sure that you clearly document this stage and take great photos of the equipment as well – you’ll need to prove the condition to buyers in order to capture the fair market value of the manufacturing machine.
Gather Documentation
Having the correct documentation is essential for a smooth transaction. Documents to gather include:
- Service and Maintenance Records: These help demonstrate the equipment’s reliability.
- Manuals and Operation Guides: Provide valuable information for potential buyers.
- Compliance Certificates: Depending on the machinery, you may need to provide certifications for health, safety, and environmental standards.
Decide Where to Sell Used Machinery: Online and Offline Options
When deciding where to sell your used machinery, consider both online and offline options to reach the widest audience. They’re best used in tandem; you can find buyers online, and if your machine(s) are valuable enough, serious buyers will visit in person to inspect and close a deal.
Online Marketplaces
Popular platforms like Machinery Trader, Surplus Record, and eBay cater specifically to industrial equipment. These platforms allow you to list detailed information, photos, and even videos to attract buyers. Some benefits include:
- Wide Audience Reach: Online platforms expose your machinery to potential buyers worldwide.
- Convenient Listing Process: Most marketplaces provide simple tools for creating listings.
- Auction Formats: Online auctions can help achieve the best price through competitive bidding.
The drawback of using these platforms, though, is that you have to do most of the work yourself. If you’re not intimately familiar with the used equipment resale market, it can be easy to make a small mistake that will drive wary buyers away. Moreover, without detailed historical pricing data, it’s challenging to set a fair price or to even know what you should expect for your machine.
Brokers, Liquidators, and Auction Houses
Partnering with dealers or using auction houses can be beneficial if you prefer a hands-off approach. Dealers often buy used machinery directly or help find buyers. Industrial liquidation auction houses, meanwhile, offer a platform to sell equipment quickly, though the final sale price varies dramatically based on bidding activity.
You’ll give up a portion of your proceeds to the partner that helped you sell the machine, but often, they can increase the sale price to such an extent that you end up ahead of where you would have been had you gone it alone. On top of that, they do much of the heavy lifting for you, freeing your team to work on more pressing priorities.
Investment Recovery Services
Amplio provides investment recovery services – a new way to approach selling used machinery and surplus assets. Instead of treating every instance of surplus as an isolated challenge to be solved, we work with enterprise clients to holistically reduce unneeded and underutilized assets. We can help clients dig out from under a mountain of excess that has built up over years, or we can proactively look for opportunities to optimize inventory levels and return cash to the business. The best part – we’re not just strategic partners; we execute all of these best practices on your behalf to get you the best possible return for your investment.
Ensure a Safe and Secure Transaction
The resale market for used equipment is fragmented, which unfortunately creates space for bad actors. You’ll have to take reasonable precautions to protect yourself and your company when closing a transaction.
- Use Escrow Services: These can provide a layer of security, especially for high-value sales.
- Draft a Sales Agreement: Clearly outline terms, conditions, and warranties (if applicable). Generally speaking, you’ll want to sell the machine “as is”, which means that the buyer assumes risk for defects and breakdowns.
- Verify Payment Methods: Be cautious with payment options and verify authenticity.
An investment recovery service like Amplio solves compliance challenges by serving as your agent and advocate. We always transact with escrow accounts, we’re experts in contract language, and in the rare case something goes wrong, we go to bat for you.
Logistics and Shipping Considerations
The buyer is almost always responsible for shipping their purchase. That thankfully removes one consideration from your plate while selling, but you’ll still have to coordinate with the buyer’s logistics partner to remove the sold equipment from your facility.
Make sure that you have bulletproof contract language around the shipping – the buyer and especially their logistics partner need to be responsible for issues that occur during transit. If your team is responsible for partial disassembly or packaging the equipment, this could make you liable to a certain extent. You can address that with well-written contracts and by packing up equipment with the shipping specialists on site.
Legal and Environmental Considerations
There are three prominent ways that you can run afoul of regulations when selling used equipment (though this is not an exhaustive list by any means).
Comply with Export Laws: Regulations vary by country and may involve specific requirements based on the type of machinery, its intended use, and destination. Some machinery may need export licenses, particularly in high-tech or specialized industries. It's also crucial to understand the import rules of the destination country, which can include safety standards, special permits, or certifications.
Additionally, tariffs, duties, or import taxes may apply, affecting the final cost for the buyer. Ensuring the buyer is not on restricted party lists and complying with relevant international trade agreements are also essential steps. Consulting with a customs broker or export compliance expert can help navigate these complexities and reduce the risk of delays or fines.
Environmental Regulations: The seller is often responsible for downstream environmental challenges caused by used machinery. You must ensure that any substances or materials, such as oils, chemicals, or electronic waste, are handled and disposed of according to legal standards. If hazardous chemicals leak during shipping, for instance, you could be held liable.
Data Security: For machinery with computer controls, it's crucial to ensure data security by thoroughly removing all sensitive company information before the sale. This includes wiping any stored data, resetting the system to factory settings, and checking for residual information in software or connected devices. Proper data removal not only protects the company’s confidential information but also ensures compliance with data privacy regulations and safeguards against potential breaches after the equipment changes hands.
How to Sell Used CNC Machines Specifically
CNC machines are highly specialized and have a unique resale market. To successfully sell used CNC machines, add these tips to what we’ve already recommended:
- Highlight the Make and Model: Certain brands like Haas, Mazak, and Mori Seiki have strong reputations, which can increase interest.
- Include Technical Specifications: Provide details such as spindle speed, control type, and axis count.
- Showcase Upgrades: Mention any modifications or customizations that add value.
Buyers of CNC machines are often looking for exacting technical requirements, so clear and detailed listings are crucial.
Frequently Asked Questions (FAQs)
- Where can I sell used industrial machinery?
You can sell used machinery on online marketplaces, through dealers, industrial liquidators, or at auction houses. - How do I determine the value of my used machinery?
Evaluate the machine’s condition, market demand, and age. Consult with experts if necessary. - What documents are needed to sell used equipment?
You will need service records, compliance certificates, and operational manuals. - How do I sell a used CNC machine?
Highlight key features, provide clear photos, and offer a demonstration if possible. - Can I sell used machinery internationally?
Yes, but ensure compliance with export regulations and secure a trustworthy shipping service. - What are the benefits of using an auction house?
Auction houses can help you sell equipment quickly, although the final sale price may vary.
