Online auctions boost King Sturge business
15 July 2008
There are many advantages to online disposals and we have found that online auctions still enjoy the same bidding frenzy that made traditional auctions exciting and successful
An online auction system, partly inspired by eBay, has boosted business for King Sturge Plant Machinery Ltd.
King Sturge P&M became the national market leader in Plant Machinery earlier this year with the acquisition of the team from Bache Treharne.
Along with Bache Treharne’s staff and expertise King Sturge also acquired the LLP’s online auction model of doing business.
The auctions allow interested parties from all over the globe to make online bids for lots which typically come from insolvency cases or from companies who ask King Sturge to liquidate assets on their behalf.
The auctions were inspired by eBay but have one big difference – where eBay auctions have a definite closing point King Sturge’s auction model allows a further 15 minutes of bidding time whenever a bid is made.
This crucial difference prevents “sniping”, the practice of bidders waiting until the closing seconds to make their highest bid, which is very common on eBay.
In the period between February’s acquisition and the financial year end at the close of April 2008 King Sturge have completed 16 online auctions.
In total for the financial year ending April 2008 the team sold nearly £17 million’s worth of machinery, a substantial gain on 2006-2007’s total of £11 million - which itself was considerably up on the previous year’s total of £6 million.
King Sturge P&M partner Chris Jackson said: “The online auctions are very successful. In one recent sale equipment which we had valued at just £90,000 ended up being sold for £400,000 after two parties engaged in a bidding war. The client was in full agreement that the market valuation was correct, the premium prices achieved were a direct result of the two sector leading corporates determination that the assets should not fall into the hands of the other!
“The beauty of the online auction is potential bidders from all over the world have the opportunity to make a bid without leaving their country of origin. The effect is often to cut out the middle man (machinery dealer) and achieve greater levels of realization for the vendor. It also costs less, an average of just £5,000 compared to traditional auctions which typically cost £20,000 to execute.”
Mr Jackson added that covenants imposed by landlords to prevent traditional auctions being carried out on site were also circumnavigated by online auctions.
He added: “There are many advantages to online disposals and we have found that online auctions still enjoy the same bidding frenzy that made traditional auctions exciting and successful.”
Mike Hanson, who heads up King Sturge Plant & Machinery’s national agency operation, confirmed that the acquisition of Bache Treharne’s business and their online auction system in February had been key to the success.
Mr Hanson said: “The online auction system has made it more cost effective to dispose of machinery by auction.”
