Equipment auctions and equipment trading services provide used equipment at discount prices. Products range from laboratory instruments to earth-moving equipment. There are two basic types of equipment auctions: standard auctions and reverse auctions. Both types place buyers in contact with sellers and reduce negotiations to a single price. A standard auction or seller’s auction allows a supplier to list some or all of its products. Potential buyers then place bids for specific items. A buyer’s auction or reverse auction allows a customer to list product requirements. Potential vendors can then solicit business. There are two types of reverse auctions: open and closed. Both are similar to the traditional request for quote (RFQ) process. At a closed auction, a buyer sends requirements to a limited set of suppliers and receives closed bids. At an open auction, the buyer advertises publicly and receives open bids from interested sellers. In some cases, equipment auctions and trading services work with application service providers (ASP) to facilitate on-line bidding and the management of electronic catalogs.
Equipment auctions and equipment trading services provide a variety of financing arrangements. Some companies offer short-term or long-term leases, rental agreements, or specialized equipment financing. Others provide purchasing plans or trade agreements. Most leases last from one to four years and include penalties for early termination. Rental agreements can be as short as one week to as long as five years. Customers can also rent shared equipment or facilities by the month, day, or hour. In-house financing allows providers of equipment auctions and trading services to serve smaller companies that may have difficulty obtaining traditional bank loans. Businesses that cannot afford to purchase capital equipment outright can also benefit from the elimination of maintenance costs that are associated with ownership.
Equipment auctions and equipment trading services may offer a limited set of items or a complete product line. For example, equipment auctions and trading services that provide capital equipment to laboratories may rent, lease or sell centrifuges, elemental analyzers, electron microscopes, gas chromatographs, high pressure liquid chromatographs (HPLC), X-ray equipment, and nuclear magnetic resonance (NMR) imaging systems. Equipment auctions and trade services that provide earth-moving equipment may offer bulldozers or front-end loaders.