IronPlanet Adds More Iron

IronPlanet Merges With Cat Auction Service

Jim Patrico
By  Jim Patrico , Progressive Farmer Senior Editor
DTN photo

You would expect such a merger to boost construction equipment auction sales. But IronPlanet Chairman and CEO Greg Owens told DTN/The Progressive Farmer that ag equipment makes up about 10% of company volume by dollar and "will be an important part" of the company's future. He expects total gross sales to top $1 billion over the next year.

IronPlanet has been in business for 15 years and was a pioneer in the Internet model of equipment auctions. It claims about 1.3 million registered uses with sellers in 40 countries and buyers in 100. About 30% of sales are international. Until the merger, IronPlanet had been strictly an online service. But -- with influence by its new merger partner -- it held its first physical auction in February in Florida and has two more scheduled this spring in Colorado and West Virginia.

Heavy equipment auction competitors like Ritchie Bros. Auctioneers have long done a combination of physical and online sales. Owens said IronPlanet would continue to rely on its online model but that physical auctions will be part of the future mix, especially in regions where they are part of the industry culture.

IronPlanet has several advantages over competitors, Owen said, including its IronClad Assurance policy. The company will send trained inspectors to a seller's location to examine a piece of equipment before sale. With some exceptions, undisclosed defects a buyer later finds are covered by the policy.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

"We will make restitution if something is wrong and if it is really wrong, we will buy the piece of equipment back," Owens said. The idea is to build buyer confidence and to encourage more buyers to come to the site.

For sellers, IronPlanet offers the convenience of not having to ship equipment to a sales site.

IronPlanet holds sales every week, which Owens listed as another competitive advantage. Other auction companies hold sales less often.

The ag sector has increasing importance for IronPlanet, Owens said, and pointed to much of the last decade when the sector was "very strong." High commodity prices boosted new equipment sales and brought dealers a lot of trade ins. "We do better when there are more trade-ins," he said.

Currently, "tractors are still strong" and sales of other ag machinery are starting to pick up.

IronPlanet buyers of ag equipment tend to be individual end users, Owens said. Sellers tend to be both OEMs and dealers looking to reduce inventories.

Overseas markets for heavy equipment are vital to IronPlanet's business model. There is "a large demand for U.S. equipment. We are very much an export country," Owen said.

Canada and Mexico are key destinations for U.S. farm equipment. Latin America and Europe also are important customer regions, although the weak Euro has recently hurt trans-Atlantic sales, Owens said.

IronPlanet is the holding company for other online equipment auction entities, including those that serve the energy, transportation and government sectors.

(BAS)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[article-box] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Jim Patrico