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Post by A

The economics of selling unreserved

Mon., Apr. 14, 2014 - 1 pm | Andy Artley

Sellers who don’t yet have experience selling assets in unreserved auctions frequently have questions about what to expect. That’s understandable, as a common misconception is that there is greater risk involved in selling on an open marketplace than selling subject to minimums or reserves.

Actually, the opposite is true. If you put a reserve on an asset, you are guaranteeing a chance that it will not sell, which defeats the purpose of having an auction. Also, you will limit your potential bidder quality as many good auction bidders don’t wish to participate in a manipulated marketplace. And, even more to the point, you will have very few dealers and wholesalers coming to your auction which is antithetical to having a great sale. It’s the dealers and wholesalers who are the market makers and understand the base value of the underlying assets so they can, in turn, sell to end users. It’s also the dealers and wholesalers who, just because they are there, naturally attract more end users to show up at an event. But if you sell reserved, the market makers don’t like to bid.

If your assets are commercially reasonable assets that have a perceived value in the marketplace, they will generally bring a fair price somewhere between wholesale and retail on any given day, so long as they are advertised properly. So, with that perspective in mind, let’s examine some possible price expectations for selling at unreserved auction.

Less than wholesale price
It’s very unlikely that your prices will be below wholesale because your buyers won’t allow it to be. Think what would happen to the buying brokers’ or dealers’ livelihoods and all of the inventories they have back in their warehouses if they let your assets sell too cheaply. Not only does it ruin your transaction, but it ruins their business model and their future transactions because they just devalued the marketplace. However, some items may sell for less than what the sellers expect due to lack of understanding of what the market value is of the underlying assets.

Wholesale price
It’s possible that prices will be at the wholesale level, but it is unlikely if there are enough bidders competing against the market makers – dealers and brokers. The end users will always give more than the wholesale price but hope to pay less than retail. By giving your asset enough time to be advertised properly and choosing an auction provider who understands marketing and sales, you will attract more end users.

Retail price
Your assets could sell at retail prices, but you will need several end users who all want it very badly and the assets have to be in high demand in the market place.

Higher than retail price
Aha! Sometimes, though rarely, prices can exceed retail values. That’s the beauty of unreserved auctions. Not only do they not set a bottom reserve price, but they also don’t set a top reserve price. This is the only sales venue in which I have seen items sell for a greater value than the seller placed on it to begin with. But this result only happens if you sell unreserved with a reputable auction company.

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Post by A

Tractor Central inventory reduction auction

Fri., Mar. 7, 2014 - 2 pm | Aaron Traffas, CAI, ATS, CES

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Aaron Traffas: Hello and welcome to Purple Wave’s Auction Podcast. My name is Aaron Traffas. We’re conducting an inventory reduction auction of ag equipment in Wisconsin for Tractor Central that will close on March 24. I’m speaking today with Randy Robinson about this event. Randy is Tractor Central’s General Sales Manager. Good afternoon, Mr. Robinson, and thanks for joining me.

Tractor Central auction flyer

Tractor Central auction flyer

Randy Robinson: Good afternoon.

AT: Let’s say I’m a bidder from outside your geography who has not yet heard of Tractor Central. Tell me about the company.

RR: We’re a ten-store operation. John Deere is our branded name. We encompass probably the northern third of the state of Wisconsin. It’s a large area and sparsely populated on the north, but we have a very diverse farm base – anywhere from row crop, dairy, cranberries, horseradish – just about any kind of crop that you can imagine. So we have a very wide and diverse customer base which leads to the very wide and diverse equipment that we have.

This event is an inventory reduction auction, and it’s quite a bit of inventory. Tell me why you’ve decided to sell this equipment now and why you’ve decided to do it by auction.

Well I think it’s no surprise that the ag economy’s been very strong in the last few years and we’ve kind of built up some excess inventory. A lot of the equipment that we’re putting on the auction is – we have doubles for it or multiples for those units. It’s just a matter of more used equipment that we have on our lots than we have need for our customers, so we’re just going to reduce up inventory. It’s good inventory and it was available for retail a few days ago.

2010 John Deere 9530T tractor

2010 John Deere 9530T tractor

You must have investigated several different options. Why, in the end, was Purple Wave selected to conduct the event?

Well, to be honest we had not thought about strictly online and they came in and told us the market research they’re doing and quite a bit of the demographics where our equipment’s going to be sold. We felt they brought a lot to the table. I really like – I think the customers are going to like, too, what they see on the website for the amount of data that they’ve collected and the videos with all the large pieces of equipment. I really like what they’ve put together for displaying the equipment and have been a very professional company. They’ve got a lot of good research on the front end, so we’re excited about going with them.

Let’s talk about the equipment. What types of equipment are we going to be selling and how much is there?

2012 John Deere 9460R 4WD tractor

2012 John Deere 9460R 4WD tractor

Well, we’ve got – I believe there’s 65 items there, and it’s very wide and diverse. We thought we should have something that would appeal to just about anybody. We’ve got a late model 9460R wheel tractor – it was a 2012 – all the way down to a John Deere 2010 tractor from the 1960s. There’s a 7810 tractor in the middle there – all different types of price points for a wide variety of customers, and not only in tractors but in just about all the equipment.

This inventory is located at several different Tractor Central locations, and each item has the location listed in the description. We have a couple of scheduled open inspections at the locations that have assets in the auction. Those scheduled inspections are Friday, March 21, from 8 a.m. to 5 p.m. and Saturday, March 22, from 8 a.m. to 2 p.m. During those times, anyone can swing by and ask questions or take a look at the items. In the event that these times don’t work for somebody, what does he or she need to do to take a look at something or ask questions outside of those specified times?

I think we’ve done something rather unique. What we’ve done there is we’ve posted the actual salesman that traded that piece of equipment in. So that phone number and that individual that is posted with each item there is actually the salesman that traded it. Nobody more so than them are going to know about that equipment. They’ve been instructed to be very helpful and get you the information that you need and tell you what they know about that equipment. That’s the actual salesman that traded it in and his cell phone number.

Tell me about the after auction experience. What can a buyer expect after the auction regarding payment and loading assistance? How long before the purchases have to be removed?

1963 John Deere 2010 tractor

1963 John Deere 2010 tractor

Payment is arranged through the Purple Wave auction, and when we are notified that the unit is paid for, we will release that unit. As soon as we’re notified – I guess we’re notified via email – we’ll be happy to load during our normal business hours which is 7:30 a.m. to 5:30 p.m. weekdays and from 8 o’clock until 1 o’clock on Saturdays. We’re not going to charge for the loading, but if there’s any disassembly required, that’ll be at regular shop time. It needs to be prearranged, and there’s flat rate charges for removal of duals which will be posted on the auction items. We would expect that all items be removed in about two weeks, but we’ll work with the customers. We understand that there’s maybe somebody in Texas or far away that maybe has some trucking schedules. We’re not going to slap a storage fee on there, but if it gets to be out there a little ways we’ll probably have a discussion with those customers. We’ll be very accommodating.

I would guess, as with most things, communication is probably key in those situations.

Correct. Yeah, you know, if there’s a loading issue or a trucking issue if we’re kept informed – as long as the equipment is paid for – we’re not real excited, but obviously we’re going to have some space issues, you know, as we get into spring planting season.

As we’ve mentioned, you’re not going out of business, this is simply an excess inventory reduction. Will you be offering any kind of financing or other incentives for prospective bidders?

2009 John Deere 7750 forage harvester 1,534 engine hours on meter 1,113 cutter head hours meter John... 2009 John Deere 7750 forage harvester

2009 John Deere 7750 forage harvester 1,534 engine hours on meter 1,113 cutter head hours meter John… 2009 John Deere 7750 forage harvester

Yes, on select items – and they will be identified on the items – we will be offering John Deere Finance to qualified buyers. It must be pre-approved 48 hours prior to the closing of the auction. The problem there is because it closes on a Monday and it closes on that weekend, so we need to have those pre-approved by Friday so you can bid in confidence that you know that you’ve been approved to bid at your desired level. Mostly it’s going to be on the larger items, the larger tractors, and we’ll identify those on the select items there.

What kind of process is that in order to get approved? In other words, if I wanted to explore that as an avenue to help me with a purchase – first of all, I assume that waiting until that Friday before the auction is probably a bad idea to start that process, but what kind of time frame are we looking at and what kind of information would you need from me to get that pre-approval?

Basic financial information – we’re going to need at least a couple days. Most applications are approved within a matter of a few hours, but a guy should have a little bit of extra time there to communicate back and forth what you’d like to see, but your basic financial information is what you’re going to need. To do the process, contact the individual that’s phone number is posted on that individual item, that salesman, and he will be happy to help you complete that.

Randy, is there any kind of warranty offered on any of these purchases?

There are some units that qualify for the original factory warranty. Those can be identified by calling that particular salesman that – his phone number is posted there, he can research that and tell you if there’s any original factory warranty time still remaining on that.

Randy, is there anything else you want to say about the auction?

2012 John Deere 8310R MFWD tractor

2012 John Deere 8310R MFWD tractor

The equipment that we’re selling isn’t something we cleaned out of the back rows and said this stuff is just in dire need of repair and let’s just clean it out. This is equipment we’ve had for sale to retail customers. I would say the greatest majority of it has been through the shops and been reconditioned and cleaned and ready for retail sale. This is an inventory reduction, it’s not a disposal of bad equipment. I would encourage people to call the salesman whose number is listed and get a good description of it and feel confident about what they’re buying.

And you mentioned it earlier, but I want to underscore the fact that the majority of these assets have video posted with them and that’s going to be a very powerful tool to get on and watch that machine run and learn more about that machine right there on the Internet before picking up the phone and making that phone call.

Yeah, correct. That’s a great feature to actually see that it, you know, starts and runs and moves and just see the functionality of it other than just a still photo. That’s a great feature.

I’ve been speaking with Randy Robinson about the Tractor Central inventory reduction auction. Thanks again, Randy, for visiting with me this afternoon.

Alright, thank you.

Bidding for the Tractor Central inventory reduction auction is open now and will close on Monday, March 24, beginning at noon central. If you have questions about any of the assets listed, or you’d like to take a look at an item before placing a bid, stop by during one of the open inspection periods on Friday, March 21, from 8 a.m. to 5 p.m. or Saturday, March 22, from 8 a.m. to 2 p.m. Contact information for the salesperson representing each item can also be found in the items’ descriptions on purplewave.com.

Like all Purple Wave auctions, there are no reserves or minimum bids. Items receiving bids in the last few minutes will be automatically extended to give everyone a fair chance to bid. There’s no advantage to waiting, so view the complete inventory listing – and place your bids now – at purplewave.com.

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Post by J

Purple Wave sponsors event at National LICA convention

Fri., Feb. 28, 2014 - 4 pm | Jordan Sterling

nlicaThe National Land Improvement Contractors of America is an organization of conservation-minded earth moving contractors with members and state chapters from coast to coast. The members of the LICA offer services comprising grading, excavating, drainage, landscaping, paving, wetland development, site preparation and more. Construction equipment is crucial to these operations, and Purple Wave’s services are well suited to help LICA members manage their equipment needs.

A member of 5 of the 19 state chapters, Purple Wave enjoys a positive relationship with LICA contractors in all states, including conducting a live benefit auction for the Kansas chapter.

This coming weekend, I’ll be traveling to Las Vegas, Nev., for the 2014 National LICA Winter Convention. It will be held at the Riviera Hotel and Casino tomorrow, March 1, through Monday, March 3.

On Sunday, we’ll be sponsoring the Associates’ Night event from 7 to 10 p.m. If you’re going to be at the show, stop by and catch up with me then or visit our booth any time during the show.

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Post by A

Trade shows for March 2014

Thu., Feb. 27, 2014 - 1 pm | Aaron Traffas, CAI, ATS, CES

We’ll be attending six conventions in March. If you find yourself at one of them, be sure to stop by our booth or seek out our crew to visit about the ways Purple Wave can help you buy and sell equipment.

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press release

Purple Wave featured in I-NEDA magazine

Thu., Feb. 20, 2014 - 10 am | press release

This article was featured in the Suppliers Spotlight section of the January/February issue of The RETAILER magazine from the I-NEDA. We thank them for the permission to reprint.

Purple Wave, one of the fastest-growing auction companies in the country, is transforming the way sellers reach buyers to turn assets into cash. The company specializes in liquidating equipment and vehicles through no-reserve public Internet auctions – providing an easy, straightforward way to sell used equipment quickly and efficiently.

“At Purple Wave, we operate a very simple, straightforward system,” said Andy Artley, auction director at Purple Wave. “Quite simply, we bring a very large marketplace to our clients in a very transparent manner so people can bid in confidence.”

The Manhattan, Kansas-based company has grown quickly since its humble beginnings in 2000. Last year, Purple Wave conducted 179 auctions, sold more than 30,000 assets, and had nearly 2.6 million potential bidders, with an average of 16,600 visitors daily.

The full service auction company conducts regularly scheduled no-reserve auctions and provides turnkey service for sellers from start to finish. “All you have to do is hire us and we’ll get the job done for you,” explained Artley. “We handle all of the marketing and details of the transaction, from the title, to asset transactions and collections.”

The auction company works to make things as easy as possible for the seller, and this includes leaving the equipment in their possession. “We have discovered that if we do a good job figuring out where the market is at and leave the asset with the owner, it translates to some extra recovery dollars for the seller,” said Artley.

A Purple Wave team member goes out and inspects the equipment, collects data, takes photos and a video, and posts the information on their website. “Our goal is to tell a story about the piece of equipment,” said Artley. “Ultimately, we want the listing to cause potential buyers to pick up the phone and call us. We want them to ask questions and discover as much as possible about the equipment before they bid on it. We want them to visualize the piece of equipment in their fleet.” Listings are typically posted from 21 to 30 days.

A lot of factors are considered when scheduling an auction. “Instead of blindly saying we’re having an auction, we evaluate what the asset is, determine the underlying marketplace, target buyers and potential new users, and work to attract them to come to the marketplace specifically for this item,” added Artley. “The end result translates to a good commercial transaction with a happy seller and buyer.”

Purple Wave employs a staff of 76, with 40 people in the field. “A lot of our employees have experience in the construction and agricultural industry, so we are knowledgeable about the equipment being listed,” added Artley.

He concluded, “As an auction company, we understand how to market equipment. Part of this understanding is researching and understanding the assets and people you’re marketing to in a simple, straightforward manner. That’s how we get the job done at Purple Wave.”

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Post by A

Clarence Collister, territory manager for southwestern Missouri

Tue., Feb. 11, 2014 - 3 pm | Aaron Traffas, CAI, ATS, CES

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Aaron Traffas: Hello and welcome to Purple Wave’s Auction Podcast, my name is Aaron Traffas. This episode is another in our series of territory manager interviews, and today I’m speaking with Clarence Collister of Lake Ozark, Mo. Clarence is Purple Wave’s territory manager for south central and southwestern Missouri. Good morning, Clarence, and thanks for joining me this morning.

Clarence Collister: Good morning, Aaron. Thanks for having me.

AT: Clarence, tell me about yourself. Where did you grow up?

Clarence Collister

Clarence Collister

CC: Well, I was born and raised in Callaway County in the town of Fulton, which is the seat there for Callaway County. That’s where I grew up and went to high school and spent my childhood and my young adulthood.

What happened after hight school?

After high school, I tried my hand at college. I didn’t do really well and ended up spending four years in the Navy.

What did you do while you were there?

I was an aviation boatswain’s mate handler. We handled the firefighting duties on base stations and then also did the plane directing aboard the aircraft carriers.

After you left the Navy you entered the business sector. Tell me about those previous careers.

Well, after I got out of the Navy, I tried my hand at a couple of different sales jobs, those being selling radio advertising and insurance sales. I operated a small hog production farm. Then, I got into the equipment business with Case – a local dealer – and worked for them for about seven years. Then, after being with Case, I was with a Caterpillar dealership out of Kansas City for ten. It got bought out and another Caterpillar dealer bought them and I was with them for a year. I just really wasn’t quite a fit for the management of the new dealership. I didn’t fit in with them and they didn’t fit in with me and I decided to do something different and that’s how I came about to be with Purple Wave.

How did you first hear about us and how did you get the job?

Well, for being in the construction business for about 19 years, I guess, prior to joining Purple Wave, I had used and been on the website quite a bit looking for equipment values and seeing what was out there and who was buying and selling equipment. Purple Wave was a great resource for that. Then, I’m going to say probably about three years ago, I had the opportunity and the pleasure to meet Aaron McKee, one of the founders for Purple Wave, at a commissioners convention. I was very much impressed with his demeanor and character. When I started looking for work, I gave Aaron a call and he said submit a resume and they had an opening that came up about four months later and I interviewed and here I am.

Clarence

Clarence serves southwestern Missouri

And there you are in Missouri. Describe the territory that you cover.

Well, I handle the southwest corner of Missouri, which is about 21 counties, basically running from Lake of the Ozarks down to the Arkansas line, which keeps me pretty busy.

Tell me what that means, exactly – keeping busy. What have you found your roles and responsibilities to be and what’s an average day look like for you?

Well, being a territory manager, my responsibilities are everything from actually getting in contact with the seller, making sure the pictures and the asset descriptions are complete and adequate, and then actually following that right through the sale. As a territory manager for Purple Wave, not only am I just interested in selling your equipment, but I’m also interested in making sure you get a good return for your equipment. That involves, a lot of times, calling bidders and reaching out to people that may be interested in your asset and getting them registered and getting them to bid on your item. The other thing that’s one of the nice things about working with Purple Wave is no day is exactly the same. Some days involve the data capture – taking the pictures and, like I said, listing and making sure the descriptions are accurate – and then the next day is kind of follow up after somebody sells with us, making sure that their load out goes smoothly and making sure that they’re happy with their auction results.

Well, we’re always after happy customers. Tell me about the response you’re seeing in your territory from your sellers and your bidders and your buyers.

The response to Purple Wave has been outstanding. The results we get are also outstanding. Purple Wave, in the auction industry, really has the reputation for hitting that market value. I think Purple Wave does that better than anybody else and the number of repeat customers that we get is really a testament to that fact.

Well, Clarence, you started with us last June, so you’ve got not quite a year with us. How are you liking it so far?

I love it. To be honest, they’ll have to run me off with a stick. I find the job very challenging and very rewarding.

Tell me about some of your personal interests when you’re not working. What kind of things do you like to do in your spare time?

Spare time? I don’t have a lot of it, but one of the things that I enjoy doing is I have a Harley-Davidson. I enjoy motorcycle riding. I started out on a Triumph when I was a young man. I actually bought it when I was in the Navy down in Florida and rode it back to Missouri. I enjoy getting out on my Harley and getting the wind in my face. I enjoy that. The other thing that – when I was a younger man, I hunted a lot. As I moved from Callaway County down to the Lake of the Ozarks I kind of got out of the hunting. Just about two years ago, my oldest daughter decided she wanted to take up deer hunting, so she and I have been deer hunting together the last two years. The first year we went, we weren’t able to harvest anything, but the last year we both harvested deer. It was pretty enjoyable.

I’ve been speaking with Clarence Collister, Purple Wave’s territory manager for southwestern Missouri. Thanks again, Clarence, for joining me today.

Well, Aaron, I appreciate you having me on. Thank you for your time.

Find Clarence on the web at purplewave.com/clarencecollister. Contact him at clarence.collister@purplewave.com or call 573.434.0019.

Don’t forget to find us on Facebook at facebook.com/purplewaveinc or follow us on Twitter at twitter.com/purplewave. Subscribe to Purple Wave’s Auction Podcast on iTunes. Search iTunes for “Purple Wave” or use the link on the podcast page on our website at purplewave.com/podcast.

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Post by D

What a day

Mon., Feb. 10, 2014 - 11 am | Dave Sommers, AARE, PRI

The topic of last quarter’s newsletter was how Purple Wave shares a customer base with lenders and how we work together to the benefit of all. While writing, I was reminded of one of the craziest lender-related auction days I have ever experienced. The following story is true. The players are Purple Wave, three lenders and our mutual customers. It happened so long ago that it’s now safe to share and no longer irritating – it’s just funny. The names and specific geography have been omitted to protect the innocent and guilty.

It was a beautiful August morning in Kansas and I was driving north to Nebraska. A customer had called and wanted to list a late-model green combine. I had vetted the situation and knew I would be reaching out to a lender for consent and payout guidance. Yet I also knew the seller was pretty well-healed and a large land owner; there was no trouble on the horizon. I was feeling good and the trip was going well.

I also had a lender-owned boat selling that morning, and I was pulling over periodically to check the bid status. The recovery price would tell me how the conversation was going to go with the lender after the sale. To make a long story short, we marketed the heck out of that thing and the sale went well. The boat sold for more than $60,000 to a far western US buyer, and a quick conversation with the lender confirmed he was pleased. The day couldn’t have been going better at this point.

Then, my phone rang. A seller for whom we had recently listed an ag equipment package was yelling into his mobile phone, as the background noise was torturous. Some weeks prior, I had met with this seller and his lender in person. We had planned the sale, the asset listings were currently listed and marketing was going well.

There was more yelling, but with the background racket I struggled for clarity. I finally understood him to be insisting that we push the sale date out for one of his assets. When I asked why, he told me that the sheriff was chasing him, and closing in…as we spoke.

Befuddled, and not knowing where else to go in the conversation, I asked why he only mentioned the skid steer and not the other assets selling. It turns out the skid steer was his getaway vehicle.

Now please understand, the top end speed of this fine piece of collateral is about 6 mph. Yet he evidently chose wisely; he easily pushed through the barbed-wire fences encountered in the pastures chosen as his route, and temporarily evaded capture.

Folks, this is everything you want in a customer. He took the time, during a “high speed” chase, to let me know that we may have a possession issue for an asset coming to sale. Expectations had been set well. Though the law was closing in, he maintained his auction bearing in considering the lender’s collateral and Purple Wave’s reputation.

Not long after, the lender came to our rescue and retrieved the abandoned skid steer from the impound yard. He graciously held the asset at his place during the marketing and load-out period, going above and beyond in assisting our mutual customer.

It turns out all three of these sales landed well; one was just a bit more adventuresome and took some unconventional teamwork.

Thanks for reading; now go poke around purplewave.com.

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Post by A

Trade shows for February 2014

Tue., Feb. 4, 2014 - 12 pm | Aaron Traffas, CAI, ATS, CES

We’ll be attending several ag and construction industry trade shows in February. Stop by and see us.

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Post by A

2014 winter sales rally

Tue., Feb. 4, 2014 - 11 am | Aaron Traffas, CAI, ATS, CES

Purple Wave’s 2014 winter sales rally was held in January at our Manhattan, Kan., headquarters. The two-day event featured continuing education for our territory managers and auction specialists.

Like last year, this event featured a set of awards given in several categories to members of the auction management team who have demonstrated excellence and exemplary performance in 2013.

2013 award recipients Bob McBride, York Hekel, Jerry Young and Michael Braun

2013 award recipients Bob McBride, York Hekel, Jerry Young and Michael Braun

2013 awards

Congratulations to Bob, York, Jerry, and Mike. We’re proud of our entire auction management team for the great job they did in 2013 and we all look forward to making 2014 a great year for our customers and our company.

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Post by A

Trade shows for January 2014

Thu., Jan. 2, 2014 - 7 pm | Aaron Traffas, CAI, ATS, CES

We’ll be attending many trade shows in January. Be sure to stop by and see us.

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