New player builds competition

IronPlanet managing director Graeme McPherson said the company had built “excellent market penetration” in North America and had reached a point where growth in those territories was becoming expensive from both a cost and resource perspective.“Interest levels have been phenomenal,” McPherson said. “We are averaging about five or six bids per item at the last auction and we had in excess of 1000 people online during the course of the auction.“We had Singapore and New Zealand [buyers bidding] as well … but all the equipment sold into Australia.“In the last auction 72 percent of equipment went to end users and 28 percent to resellers. We can’t tell what the businesses have been but on average over the past four auctions we’ve had about 75 percent of items go to end users.”McPherson said the company’s core line-up of equipment was skid steers, compactors, rollers, dozers, graders, loaders and excavators from about 30 tonne down to minis.IronPlanet offers two types of sales to vendors. In an owner auction there are two prices, the opening bid price and a reserve price the vendor has set prior to the auction. “The seller will consult with us to find the opening bid price and the reserve is also then set,” McPherson said. “People bidding will get a message back advising them that the reserve is not met via an email.”In a feature auction the opening bid price is determined by IronPlanet. With this type of auction, once a further bid is placed the item is on the market and will be sold.The company has a variable type of listing fee for vendors and also offers “iron clad assurance” – a kind of warranty on the auctioned item’s description to leverage some light security for buyers.“Iron Clad is not to ensure that [the equipment] will perform from a functionality basis but rather that what is provided in the report is true and accurate, and what the buyer will get is what was on the report,” McPherson said.“If [the listing] says it is a backhoe loader with a four-in-one bucket and air conditioning with 3522 hours, it means it will turn up with those things in place.”At this early stage of its exposure to the Australian market, McPherson said the company was “on target with our business plans, about where we expected to be”.“We’d always like to be further advanced but we really only launched in August [2007],” he said.Makrell said Ritchie Bros. was not fazed by the new competitor. “It keeps you on your toes,” he said. “The people who will benefit from the competition are the end users and the dealer.” “I believe if we maintain our integrity and our service and our business model that’s been successful for 50 years worldwide … we will continue to grow.”Increased competition in sourcing used equipment will remain an ongoing challenge. “It’s a matter of being on top of the market and building rapport with people to sell their equipment,” Makrell said.

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