Social networking introduced to online machinery auctions

The Indoogoo online auction service aims to allow any used machinery owner to auction their own equipment without involving a middleman. Users could include individual traders, large equipment manufacturers and rental companies.

“With Indoogoo Auctions, everybody is an auctioneer,” Indoogoo CEO Mark Turner said. “Our motivation behind its development is that we wanted to give Indoogoo users the power to control their own equipment auctions. This is also the first time the social network structure has been incorporated into an online auction service, and we feel it has the potential to dramatically change the way second-hand construction equipment is traded around the world.”

Turner told Quarry that the industry’s response to the concept had been “incredible”, and that the service had already secured the participation of a number of key industry manufacturers and large rental companies seeking to auction equipment at the website’s pilot launch later this year.

“What the sellers are excited about is that they get to keep the data of every buyer that submits a bid request,” Turner explained. “So if they have 10 buyers submitting a bid request on a piece of equipment…[the seller] is effectively building their database of qualified, potential buyers by 10 new contacts, rather than the auctioneer keeping this data.”

The social networking aspect of this model was designed to ensure that no trading opportunities were missed, allowing sellers to directly contact unsuccessful bidders to offer them other items that might be of interest.

“In addition, the fact that the buyers can physically inspect the machines prior to auction day if they want to is a huge plus,” Turner added. “The response has been extremely exciting and is building with everyone we speak to.”

How it works

Sellers will be able to design their own “auction hall” that offers three different types of auctions: a timed, 30-day auction with a “buy now” price, a day auction with a reserve price and a day auction without a reserve price.

Users interested in participating in an auction will be required to include proven trade references in their profile and pay a bid deposit into an independent, third-party escrow account. The bidding process will then proceed much like existing online auction models, and once a sale is finalised, the successful bidder will be required to organise payment directly with the auctioneer through the third-party escrow service.

Sellers will be required to pay a listing deposit – fully refundable upon completion of a sale – as well as a sales commission that will be set at a fixed percentage across all sales with a capped maximum amount.

Buyers will not be required to pay premiums on the final sale but Turner noted that any additional costs, such as those associated with an international sale, would need to be agreed on by the parties involved.

“Transportation and compliance costs would normally be to the buyer’s account as it is envisaged that most sellers will sell on an ‘as is, where is’ basis from their yards and job sites, but again that will be for the seller to determine at the time they list their equipment for auction,” Turner explained.

He added that for international sales, the onus would be on both parties to ensure the machine was compliant with the national standards of the country to which it would be exported.

“With Indoogoo’s social auction, buyer and seller are able to potentially meet and discuss all of these details before auction day if they wish,” he said. “This means that they can negotiate any and all terms and requirements as they normally would in a private sale.

“Indoogoo does not get involved but rather provides the platform and the technology to both buyer and seller to become their own auctioneers and participants. The key to Indoogoo’s social auction model is that it is a social network first.”

Turner stated that the service was currently undergoing rigorous testing and was expected to launch in the second or third quarter of this year.

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