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Author Topic: Equipment Auctions for used secondary wood processing equipment  (Read 1396 times)

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Offline stanmillnc

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Equipment Auctions for used secondary wood processing equipment
« on: November 17, 2021, 04:46:48 PM »
So I'm new to used equipment auctions and participated in my first auction yesterday. Was looking at a SLR, 43" planer/sander combo and Sawstop table saw. My expectation was that the equipment would sell for approximately half the price of new, inclusive of auction company fees, based on what others seemingly with experience had told me - boy was I wrong. I suppose that the current supply chain issues for new equipment have driven up the cost of used machinery; but not this much. Most good condition machines were selling for 2/3 to 3/4 the price of new!

Another factor might be the demographic where the auction was held - it was Amish country and they seemed to be flushed with cash and eager to spend. My previously held misconception that the Amish did not use large electrically powered machines changed as soon as I saw them rolling up to the auction site on horse drawn carriages making big cash purchases.

Anyway, is this how equipment auctions go for others? Are auctions no longer the place to get industrial woodworking equipment and are the days of good deals gone? Or perhaps I just need to wait it out until markets return to a more normal state?

Offline Southside

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #1 on: November 17, 2021, 06:25:18 PM »
Last year at a farm auction I saw stuff sell for more than new, and there have been a few on like auctions where WM mills have sold for more than a new one currently is. 
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Offline customsawyer

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #2 on: November 18, 2021, 06:47:40 AM »
When new equipment prices are going up as fast as they are then the used market is going to have to keep pace. This is all caused by the high demand, shortage on parts, lack of hired help and a dozen other reasons. Take the skidsteer I bought this past Jan. It is now almost 20K more than what I paid in Jan. so that means that if I wanted to sell it today I could probably get pretty close to what I paid for it or maybe even a little more if I found someone that needed a good low hour machine right now. Yet if I sold it I would pay more to replace it.
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Offline taylorsmissbeehaven

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #3 on: November 18, 2021, 09:06:09 AM »
I agree with what the others have said. I have also experienced a sort of "auction fever" where a couple of folks will get caught up in the bidding (or trying to out do one another) and run prices way up and ruin any deals for everyone else. Before Covid there was a quarterly farm auction just a few miles from my house. We would go every time until it was ruined by this type of bidding. Dont know if this is common or just something I experienced but its really annoying!! :D JMTC Brian
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Offline alan gage

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #4 on: November 18, 2021, 11:15:46 AM »
I enjoy going to auctions now and again and try to make the ones that have decent equipment. Rarely if ever is there a sale with industrial type equipment but once in a while someone with a nice home shop or former cabinet shop will be closing out. Sometimes there are really good deals and sometimes not. Depends what's selling and who's there bidding. The best deals seem to be one or two pieces of equipment selling with a bunch of unrelated things since it doesn't seem to draw as many interested buyers. 

I haven't been going to many auctions since Covid as there isn't really anything I need and I know things are going high. There was some woodworking equipment (cast iron table saw, 14" band saw, compressor, etc) that went for next to nothing at a recent auction. I got the bandsaw for $35 and I don't know if the table saw and some of the other equipment even got a bid. It was older stuff but in very nice shape. 

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Offline Stephen1

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #5 on: November 26, 2021, 03:18:26 PM »
The Equipment repair company came to service my TCM Forklift with shuttle shift. I bought it off of him when I started 3 years ago for 11k. He asked if I was retireing anytime soon as he cold get 25K for my Forklift. My Kiln has gone up 19K over what I paid 3 years ago. I do not think new sawmills have gone up quite that amount, but I really haven't looked.  
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Offline SwampDonkey

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #6 on: November 26, 2021, 05:20:00 PM »
The other day my brother told me someone got sucked into one of these buy back blitzes of late on used passenger vehicles. After he sold his vehicle he was then told it could be months before he gets to sit in a new one. ::)
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Offline SwampDonkey

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #7 on: November 26, 2021, 05:28:03 PM »
You fellas south of the snow line usually find good auctions. Any around these parts are mostly stuff everyone else passed over.  Anything decent I'd wager is high up here. I saw a couple farm auctions that were advertised and never came about. Maybe someone bought the lot, they would be from a single farm selling off. I see a lot of local hobby farms here go up to Quebec and Ontario to get stuff. One fella got a 150 foot glassed in green house up there a couple years ago, got for almost nothing. An old couple retiring and wanted to move it off the property. Took the fella a couple years to get the site prepped and it all installed back here. That thing brand new I bet cost some $$. Has a lot more in concrete $$ than in the greenhouse. Good thing it was cheap, he's just got a hobby operation. :D

Grain tanks must be cheap second hand to, he's got 4 or 5 tanks and what he grows wouldn't fill one of them.
No amount of belief makes something a fact. James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Offline mike_belben

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #8 on: November 26, 2021, 08:19:51 PM »
i guess i was about 25ish, i attended the auction of a machine shop i worked at from 13-17 yrs old. i bought nothing because the prices were stupid and there was stuff i knew to be broken being sold for up to 3/4 of new.  the week after the auction they wanted the building empty to lease.  everything left that didnt sell, i got to have it. i did so much business and trading during the pickup week with all the other bidders that it wasnt even funny.  thats when you wanna be around a big auction.  lots of guys are peddling off pieces of lots that they had to buy to get one or two things.

not too many years later the same sort of stuff was being sold to scrap yards without even holding an auction..  the scrap companies were being asked for bids on whole shops.  then it went up again.  then down.  now back up.  


if the price is stupid, just wait until it isnt.  you dont need it that bad or you woulda already had it.  the "better get one before i cant" thing is a self fulfilling prophecy. the housing boom sucked me into buying an overpriced house in 2007.  yall know how that went.

its hard to be patient in this situations but im tellin ya.  the herd is running off a cliff. ive seen this a few times.  go the other way. 
Isaiah 63:10

Offline thriceor

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #9 on: November 27, 2021, 08:12:47 PM »
Auction prices can be all over the board in this area (Miami County, Ohio).  I like to go to ones that have shop equipment and tools, because they have equipment and tools!  Most are attended by the same core group of buyers.  We have a few "re-sellers" who are regulars, and tend to buy as much as they can.  As I only buy stuff I think I need, or can use, this can erode the chance of a bargain.  That said, I have spent close to new price occasionally for a few things I really wanted (or just to outbid one of the "buyers"  ;D).  So I guess it evens out, and it's fun.

I have bought good old equipment for half the price of cheap newer stuff, sometimes.  Sometimes the old stuff goes high.  Sometimes good old Delco grinders go for $10, the next time they are $40.  A lot of older shop equipment will sell for low prices, I think because so much of it is coming available.

Each sale seems to have it's deals, and it's coveted items.  The only constant I have observed is that the more there are of similar items, the better the prices will be (at least after the first one).

I'll keep going, because it's fun to accumulate stuff my kids will have to figure out what to do with  :D.
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Offline longtime lurker

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #10 on: November 29, 2021, 06:33:14 AM »


If ya waiting for cheap wood processing equipment just wait until the price of wood falls. And it's going to fall - this is a boom and bust industry, behind every big boom is a smash and this is the biggest boom of them all so we know what comes next.
You'll be able to buy plenty good gear cheap then. Of course in a bust you might struggle to afford it with the market tanked but you'll buy it cheap enough for sure.

Paying more than you'd like when you're cashed up is often more affordable than trying to find the cash to grab a bargain when you're skint.
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Offline mike_belben

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #11 on: November 29, 2021, 09:45:25 AM »
Boom.. What LL said.   Having a wad of cash under the mattress on crisis day is how real lasting fortunes are made.  The buyer of last resort gets begged to come.  'make an offer before they lock me out.'  

This is what the scrap industry is built on. Last resort buying.  No negotiating, dont come here until you are defeated.  Todays prices are on the whiteboard.  

I made a friend over $150k flipping scrapped stuff in 2 years time.  "I will buy anything if i get to set the price."

A very wealthy fellow no matter what markets are doing.
Isaiah 63:10

Offline longtime lurker

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #12 on: November 29, 2021, 03:37:32 PM »
Yeah well, I guess the thing is that price/need/opportunity and profit are all going to vary depending on where and how you make your money.

I don't make my money from scrap or trading in equipment, hell I don't even make my money sawing wood anymore. I make my money selling wood, some of which I even cut myself. And some I don't - I've bought near as much wood as I've sawn in the last couple of months. And with that admission comes some realisations about how to approach need and opportunity... my need is now because my opportunity is now. I can't influence what the market will be doing in 3 months or 3 years - I can't even tell ya if I'll be here to deal with it - but what I can tell ya is that next week if I've got a bigger, better, faster widget that said widget will make me money and that holding off buying said widget until the bottom falls out of the widget price will come at a cost in terms of profit and opportunity. And that buying that big widget cheap will come at a time when the market doesn't have much room for it to present me with profit and opportunity.

It'd be nice to be able to operate independent of market conditions like your friend but yanno... I don't have that sort of cash and never have during my lifetime. I've turned a lot of cash over and had some high living but I've always had a lot of debt as well because mostly the start I got was along the lines of a good work ethic and a fair degree of native intelligence so I could mostly work a lot harder and a bit smarter than the next guy.

I hate debt. I hate stressing about money. But in truth mostly when I've been up to my a$$ in debt and stressing about cashflow has been when I've had cashflow and lived high on the hog so to speak. I'm spending money like water lately but I don't think I'm spending too much on any individual piece of equipment.... I'm just buying it while I got the coin to pay for it and during the next crash will come a time of consolidation when others are buying bargains they have to struggle for. Because this is a boom and bust industry - behind every big boom is a &^%## big crash - and when I come out of that next crash I'll be in a lot better position than I was coming out the last one to take advantage of the good times.

The long view... I'm in this game for the long term and I'm thinking beyond any one cycle even if I can't guarantee to be there to see it myself; next crash I buy timberland.
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Offline mike_belben

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #13 on: November 30, 2021, 08:58:06 PM »
Just some thoughts anyone in business should have a grasp on.  


If you are moving semi loads of something in and out and there is a competitor in your state, you are in a commodity market.  It doesnt really matter what exactly, tgeyre all pretty similar.  A commodity business is one with low margins and high volume.  Due to low margin, it cannot pay on a small scale.  Like making one bag a day of wood pellets or dog food for your living.  Why bother? Either one is a huge business but only works on a huge scale.  


The problem is commodity producers have a lot of inertia and commodity markets are fickle.  Think of semis driving too fast, too close on the interstate.  Profit margin is the space between trucks.  When the truck up front slams on the brakes all the following trucks have a big accordian wreck because lets face it.. You dont run a business too long without profit.  In good markets demand is insatiable and wears your equipment and crew out.  then in bad markets you may operate at a loss until you cant anymore.  Feast or famine.



Opposite side of the story is high margin business.  I was a micro-volume product manufacturer for 8 years of a product with no competition that i created. In the beginning i retailed by individual units on a custom order basis as i made them.  then subbed most machining to a CNC and i wholesaled them exclusively to a single retailer when i couldnt keep up with the manufacturing. Today the product is distributed and wholesaled to multiple retailers. Profit margin was 700% when i started and 300ish % when i sold it to my partner.  I never raised the price and made the same or a bit more money pretty much each year.

I never wore a machine out, had no employees after a 3 day trial run disaster, and never felt any sense of economic downturn ever (even 2008 ) because even as every single cost continually rose, my margin was so fat, it was always feast.  i was able to absorb price rises to keep cost the same and try to discourage competitor entry.  Order volume grew every consecutive year.  It took 9 years for a competitor to arrive with a near clone but they didnt make a difference in new owners bottom line because his price was higher than ours.  The niche was bigger than we all thought.



Not horn tooting here..  i made plenty of bad decisions and wasnt smart with the money, but its a real contrast.  Consider a pallet sawyer verse a live edge conference table sawyer.  What theyre physically doing is soooo close.  But the business models are worlds apart.  

I delivered logs to a pallet mill today that has millions in assets and a 45 man crew to produce a $15 widgit that i pickup by the truckload free all the time.

 One talented man can do top of the line tables in a 2 car garage with an alaskan, handheld powertools and sawhorses.   But look at their margins.  One has wiggle room to absorb slowdowns and the other will be run into the ground just by its payroll if global trade drops.

Today we call it value added but i think its really segregating yourself from the nearest competitor so his price is no longer weighing your price down.  Turn your sawdust into robust compost and now the sawmill across town isnt influencing what your sawdust income ceiling is because they sell sawdust.. You sell compost.
Isaiah 63:10

Offline mike_belben

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #14 on: November 30, 2021, 09:11:31 PM »
and that brings me back to my scrapyard friend.  Why is he wealthy?  Because of the fat margins.  He buys anything at a commodity price.  Thats light iron, 8cents a pound.  

But as a junk seller its not commodity anymore, its waiting for one eye who sees a hens tooth.. Thats an old america made wall locker, $45.  Thats a toyota camry transmission $450.  These barbells are 50 cents a pound when he paid 10 cents. Big big margins or it can sit longer. 
Isaiah 63:10

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #15 on: December 02, 2021, 11:02:18 AM »
I know that even a blind squirrel finds a nut once in a while, but every time Ive tried to buy something at auction, it went for more than it was worth to me. 
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Offline mike_belben

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #16 on: December 02, 2021, 11:19:38 AM »
absolutely.  there is nothing better for a seller than multiple bidders.  when i was the scrap yards junk seller i routinely set up multiple lookers at the same time.

go ahead you two, look it over and then compete for it.
Isaiah 63:10

Offline muggs

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #17 on: December 02, 2021, 02:21:12 PM »
I was friends with an electric guitar factory, they had a BK auction. You know like the song words too much coke and too much smoke, it applies here. At the auction, the auctioneer stated that all the tools came from a working facility. I started to bid on an item, and the foreman of the place whispered to me that was'nt their stuff. The auction co. had brought in stuff from the outside, that you could not try out. I bet the tools did not even work. So be careful out there. Lots of tricks.

Offline farmfromkansas

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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #18 on: December 19, 2021, 06:25:26 PM »
Last farm auction I went to, the seller got a lot more than he planned.  Everybody was crazy to buy his old stuff.  Only bargain I saw was a hydraulic hay rake, and there was one bidder, so I ran the guy for a way, but he was determined to have it and I did not need it as bad as he. I have an older model which works well, is just getting hard to fold out for a guy 70, and this one was a hydraulic fold.
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Re: Equipment Auctions for used secondary wood processing equipment
« Reply #19 on: December 20, 2021, 03:55:01 AM »
Consider a pallet sawyer verse a live edge conference table sawyer.  What theyre physically doing is sooo close. But the business models are worlds apart.

 One talented man can do top of the line tables in a 2 car garage with an alaskan, handheld powertools and sawhorses.   But look at their margins.  One has wiggle room to absorb slowdowns and the other will be run into the ground just by its payroll if global trade drops.
I meant to come back to this a while back but got sidetracked, and we're both wandering off topic anyway but... what we're discussing is more important to an enterprise than paying a few bucks extra for a half broken down piece of gear.

I don't disagree with any of that post, but there's a whole lot of if's, but's and maybe's I think you glossed over.
Profitability is important. And we agree about high margin businesses and low margin businesses, and I've been in both at one time or another

The problem with high margin low volume businesses is that your product is almost inevitably composed of discretionary spending items; people don't have to buy what you produce. Doesn't matter whether we're talking conference room tables or high end kitchens or jewellery or tenor saxophones... market demand for your product is based solely around people having money to throw about on the product. That can lead to cashflow issues that are seasonal in nature (people have more play money at certain times of the year) and just a dead set collapse in demand in a poor economic climate. And particularly when you've got limited output like a one man band conference table manufacturer it can be a long time between drinks: Cashflow is as important as profitability, because you can be very profitable but if the money ain't there when the bills are due you've got a problem. And particularly in the wood business every item being a one off means marketing is harder than a custom widget the same as every other custom widget you make so you can't just box them up and ship them worldwide.

High volume low margin work as you correctly point out tends to be tough. I've done that too, beaten myself and the gear half to death for peanuts and been caught because when the big ticket maintenance bills hit sooner than anticipated there wasn't the money to cover it. And been done over by wholesale customers going under, and done over by wholesale customers buying retail volumes on wholesale prices. But so long as the cashflow is there you can work your way out of the hole... usually just in time to fall into the next one.

Nowadays I do a little of both. I don't build high end conference tables or do big dollar kitchen fitouts but I carry the materials. And I do all that framing I used to do as GOS roughsawn at wholesale but mostly sell it as DAR at retail... I try and value add it out about as far as I can go while still being a sawmiller/ lumber merchant rather than a cabinet and joinery shop. Selling 2x4's I get cashflow, selling 20' x 5' live edge slabs or DAR walnut I get some of the cream as well. I'm competitive with anyone on the framing because I have the minescule profit I used to make at wholesale and the lumber merchants margin as well. And it smooths the cashflow between sales of the good stuff.

Downside of this as a business model is that I have a lot of $ tied up in inventory. But I own my inventory outright so while I'm cash poor just about all the time I can mostly sleep at night knowing someone will buy something tomorrow for sure. And I have a lot of equipment because as my volume has dropped back I've vertically integrated again. (Didnt want to but to hold a logging contractor steady you got to keep him busy)

It's taken me a while to find it but yeah... I think I've found my niche only it's not so much a niche as a little bit of everything. This week I got an order for high value cabinet timber leaving, I got little bits and pieces of framing jobs leaving constantly, garden stakes to do, got a pole order that we need to debark, I need to cut more feedstock for decking, etc etc etc... I have a steady stream of moderately profitable jobs that are not necessarily discretionary purchases to the customer, and a bit of cream on top.

Back on topic I bought a new piece of old junk the other day. Paid "too much" for it by everyones estimation but for mine I spent a day and about 1k on it and started her up and walked her on the float to come home... so much for parting it out to keep the other one going. (And for what I paid she was worth that as parts easy if it hadn't co-operated) But I've always been lucky with equipment... or maybe I know what I'm looking at, and right where to give it that tap with a hammer to fix the "seized transmission" :D



 

Ain't she pretty? She will be with some paint... hitch is sloppy but the old tart pulls like a train and you can do a lot of line boring for the cost of a Tigercat 602.





The quickest way to make a million dollars with a sawmill is to start with two million.


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