Hi everyone, I wanted to share a bit of my story and ask for your thoughts or advice. Since 2018, I’ve worked in the heavy equipment industry as a middleman. In the beginning, I used to visit end users personally to find machines for resale. Over time, things improved, and machines started coming to me. I always made sure both buyer and seller were treated well. I’ve built a reputation for being transparent, reliable, and doing honest business. During COVID, things got tough, but we managed to keep going by selling machines through videos. Even without physical inspections, we had no complaints, which really proved our reliability. In 2020, I decided to shift gears and started buying and selling on my own, with just €25,000 as starting capital. I wanted to build it up slowly, but sourcing machines became a huge challenge. I kept getting outbid at auctions, especially with end users bidding alongside dealers. Prices were too high, and the risk of sitting on machines for months made it worse. I held on too long, and mentally it broke me down. That €25,000 eventually disappeared into monthly expenses, and I never even bought a machine. My clients who used to buy through me also started going directly to auctions, so I stopped working as a middleman in 2023 and went back to working as a mechanic. Recently, though, I’ve received a new opportunity to work with a startup and a €1,000,000 investment to source and sell machines. For the past month, I’ve been trying to find good machines. I’ve reached out to end users, dealers, and even pay a finder’s fee to people who connect me with off-market equipment. I’m currently avoiding auctions because, in my opinion, it feels like they’re becoming dumping grounds for leftover stock. And platforms like Facebook and Marktplaats are filled with other dealers, not actual sellers. I know the market, I know the prices, and I’m confident in selling – the real struggle is buying. It’s frustrating because I feel like I’m doing something wrong, or maybe the market is just oversaturated at the moment. So here’s my question to you all: Based on my story, do you think I’m missing something? Is it really the market that’s this tough right now, or am I overlooking a key strategy? How do you source your machines? I don’t like asking other dealers directly out of respect for their hard work and the paths they’ve taken, but I really appreciate any insights from the community. Thanks in advance for your time and feedback
Ask yourself what you bring to the table vs someone like me going to the auction or estate sale or private listing by myself and buying or bidding. You need to risk something that brings more than just the machine to make your service/markup worth more than doing what anyone else can already do unless you deal with niche equipment for niche industries. Your finders fee as a middleman is basically irrelevant in this age of the internet making it easy for owners or companies selling equipment online. Which leaves you with niche stuff or justifying your markup through something like a warranty or comprehensive service and repair to known worn parts to a buyer.
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Kenny Tarmac Jr.....
Dutch Machinery trader. I don't think you are missing anything. I don't think it matters where you find the equipment whether it be auctions , facebook, dealers, you have the skillset to inspect and sell equipment. The whole world is coming apart at the seems as we speak so yes it's tough for everyone. Only advice I can give you is don't give up and keep moving forward.
Lots of used equipment dealers get the bulk of their equipment from auctions. They put it in their yard and barely look at it. If you could inspect equipment and then give detailed reports and even warranties on it makes you more credible. You could also offer to buy machines from contractors looking to trade in. You probably wouldn't have the overhead of big dealers so could pay more and still make a decent profit. Most buyers would pay more to have a machine with a through inspection report noting things that may need attention in the near future.
We sell our trade ins wholesale, have a select group of used dealers we reach out to. Also some gets listed on machiery traders fastback iron. reason to do so instead of retail or auction is speed, and also a solid bid before the Machine is even traded. Don't want to mess with used retail sales, or tie up cash in inventory.
I would be nervous if I had to pay interest on that money. I fool around with used equipment for my own use, sometimes it takes me 1.5 years to find a "deal". I have seen a few that i ended up thinking that dang I should have bought that. There are far more disabled machines that need work to be put back into action. I would think the market to obtain them would be easier in those. Some times companies list one thing as stated above. Go check out every listing you need to actually do more foot work. That is a free introduction that allows you to get face to face. Several times for me you are looking at something that ends up letting you look at something else. At the end of the day your model maybe a combination of locate repair and sell. That will be hard because you will always be waiting on pay day. If you are building an inventory then you are working the wholesale market looking to sell at a retail price. This means you will need a store front to hold and show these items. Or you want to do a fee for lining up retail clients on both sides. Constantly looking for both buyers and sellers. Otherwise you will need immediate funding, and be first to the listing because every farmer is looking for a deal and all the bigger guys are only buying new items. Unless someone is retiring or washing out due to failure good machines don't turn over as much as you would think. A lot of failures can't turn wrenchs. Also the industry has cycles and it is easy to see those. When machines have work they are working and people can make payments, when you see stuff sitting and listing's increase that is the time to buy. When it's busy and there is work and someone needs a 953 you will take any 953 you can get. So you must catch the cycles. Hold and wait. Etc.. Lastly certain companies don't want there old machines taking there work, I know of a few that won't sell anything. Scrapped or it sits in a big yard. They won't sell. It's a tuff game, you are playing with things that can have wild swings in price, constantly cost money to maintain, have hauling cost if you start moving them. If you are not into something steady then you must deal in a wide variety of things to attract more buyers and sellers
We trade most of our iron in to the dealer when buying new. Most of the time we have depreciated the machine to $0 either lump sum bonus or over several years. Normally there is very little $$ difference between what the dealer offers on trade in to what the real retail (Not machinery trader retail) price is once you deduct the tax penalty on the recapture. An added bonus is the transaction is quick and easy, not tying up your capital like Ozark said. OP you're in a tough spot competing with dealers and auctions. Have you considered a rental/used sales combination? Maybe concentrate on light construction rentals like compaction, CTL's, mini's, light towers and small lifts? Buy them, rent them and sell them. The rental would give short term revenue and the sales long term revenue. Easier to forecast and plan. By keeping the iron smaller it cheaper to buy, cheaper to work on and easier to move. Just my $.02
Is there enough profit that you could make it taking the auction buy and sell fees? If the auction makes 10% on both ends, you could make that instead. The benefit of paying you that money vs auction for seller would be a deal ahead of time vs gambling on auction results. Benefit for buyer would be your inspection report and reputation for honest dealings.
Interesting question by the OP. My thoughts are that middleman dealers are dying a death.The true dealers see it coming a mile away and rarely allow middleman intervention unless it suits them. I agree with the OP that he needs to buy stock of his own to sell.This requires nerve,patience and the financial capability of sitting on stock for a considerable time to wait for the right price. You make your money on machines when you buy them generally. Buy quality,but don’t expect cheap bargains. My own thoughts are that many of the successful dealers can afford to buy in quantities that you won’t with your $1m budget.They also have many,many years of experience.They also have contacts at the highest level that you might not. It’s a tough thing you’re trying to achieve.I dip my toes in the water quite often with Cat dozers,but I have a trusted dealer that handles all my transactions simply because we are also friends.I couldn’t deal on a global market level like he does. I’m not clever enough. Perhaps you aren’t either,I have no idea,but you’ll need more than $1m to make a strong go of it,and you’ll need the financial support and storage space to sit things out when you have to. I wish you the very best of luck in your endeavour.