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Ensuring that used specialty equipment is in top working condition is more important to buyers than a few nicks and scratches on a truck, a re-marketing expert said.
“When you have cranes and hydraulic systems and things like that — expensive add-on equipment to these assets — the buyer really wants to know that equipment is working. And when they’re reassured it is they will bid max market value for these assets,” said Justin Honeycutt, vice president of heavy truck sales at fleet management services provider Element. Part of the company’s services is managing the resale strategy for trucks and cars.
Honeycutt spoke during a March 10 presentation at Work Truck Week 2021, a virtual event hosted by NTEA, The Association for the Work Truck Industry.
Honeycutt said it’s important to ensure sellers are making strategic investments in equipment they hope to sell. “We always use the rule of thumb that we want to invest a dollar to get three back,” he said. “We’re very sensitive to our customers’ net returns.”
The focus, he said, is on ensuring the condition of the equipment and the components, not on cosmetics such as fixing dings and scratches. Used trucks, he said, are expected to have some wear and tear. However, he noted that it’s important to remove branding and logos on the vehicle from previous owners.
Honeycutt highlighted marketing, expertise, reconditioning, measuring performance metrics and technology as the key focuses to selling equipment, an approach that also includes working with auction companies and other sellers.
“We also have a network of dealers or brokers that we’ve used for years that move unique ... assets that we’ll leverage direct sale with, when it makes cost sense to do so,” Honeycutt said. “Our approach to the market — the promotion, the marketing, the right vehicle, the right place — is the first key to success.”
The next vital element, he said, is the right people. Element has a dedicated team of eight individuals who focus specifically on the Class 8 specialty equipment segment.
Honeycutt noted that the usual cycle time for selling used trucks is longer than a typical passenger car. This is due to logistics, such as moving the vehicle, certification and preparation, he said. Plus, he noted, sales activity around heavy equipment is simply not as frequent.
“Where there’s weekly sales on the passenger vehicle side, there may not be a sale here for 30 or 45 days, depending on what part of the country these assets are [in],” Honeycutt said. “That lengthens the time to sell. Our goal here is to try to sell as many of these vehicles as possible within a 60- to 70-day time frame.”
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Honeycutt noted that measuring sales performance is also key. “Not only the time it takes to sell these vehicles but our overall performance,” he said. “We really closely monitor cycle time.”
Honeycutt added there also is an added challenge in selling specialty equipment, as there is not a large amount of comparison data to use for reference.
During the coronavirus pandemic, he noted that technology has brought a new level of opportunity to his company’s multichannel approach to selling.
“In the last 12 months, technology is becoming even more important,” Honeycutt said. “A lot of the live events that used to happen are on freeze right now, so everyone had to pivot and go to a more digital way of sourcing this equipment.”
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