Mining Equipment Auctions – Price Determinants

The mining industry also regards the equipments and the machinery as the lifeblood of the mining industry. It allows projects, increase production, and boost profits. The process of buying and selling equipments in mining equipment auctions is not that hard either.

However, in auctions especially, whether buying or selling, there are more things to consider than just age or condition of the merchandise. You would know that a lot is at stake even if it is just one excavator, bulldozer or a dump truck.

Here are some factors affecting pricing.

The law of supply and demand

This one governs all business deals and certainly affects the pricing. When demand is up, or when supply is down, the prices rise. If there’s a glut, the prices go down.

As a seller, you can have buyers in areas where the supply is low and demand is high. As a buyer, you can go around and buy from places where there is an oversupply of equipments at lower prices than you expect.

Economic climate

Economic conditions will also have an impact on supply and demand and the resulting price of merchandise (mining equipment) and its price. When the economy is in a downturn, everyone watches the bottom line closely.

At this stage, they are less willing to pay higher prices for the equipment. At the same time, the need for equipment goes down and more companies will sell their under-utilized equipment and turning into a buyer’s market.

These factors are usually out of the control of buyers and sellers. However, when demand is high in one place, it is low elsewhere. Tapping into these regions or industries of high supply and low demand can be a smart move.

Manufacturer

There are now many manufacturers of equipments out there, but a few dominate the market. Many people will only buy from one or two particular makes of equipment. Brand loyalty is reflected in annual sales of new and used equipment around the world.

There are reasons why people would pay more for a name brand. Either they had good results with it, and trust it, have a good relationship and history with the dealer or the name itself often simply implies quality.

Models / features

Standard models are easier to sell than specialized pieces of equipments. Specialized equipments (like those in mining for instance) need to be offered to the biggest audience possible. The features and attachments can have a significant effect on the equipment’s selling price.

A feature may appeal to one buyer and is not favored by the other. If you are selling, it is important to reach to a large pool of potential buyers.

Age / condition

This is the generally the most frequent question being asked when buying an equipment. In short, age is an important determining factor of price. As it ages, it also depreciates along.

In another context, an equipment piece fetches a poor price if it is in poor condition, regardless of its age. Older but well-maintained equipments (including its appearance) can sell better. These are some of the factors that determine prices in mining equipment auctions.