IronPlanet to Push for Major European Tenders

For government and public sector entities, maximising the return on assets they deem surplus can bring a substantial stream of revenue. The problem is, the perception of what that maximum return actually is has been largely undervalued, particularly with regards to heavy equipment and rolling stock.

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IronPlanet, the world’s leading marketplace for buying and selling used heavy and agricultural equipment, is in the midst of raising the expectations of what that value could be. By brokering partnerships with notable government sector agencies, the company is utilising its used equipment expertise to achieve impressive results.

In late 2014, the company established a global agreement with the United States Defense Logistics Agency (DLA) to manage the disposition of its surplus rolling stock through IronPlanet’s online marketplaces. After a series of highly successful auctions – whereby price performance improved by 300% compared to their previous contractor, with 100% of the equipment being sold in half the time – IronPlanet began auctioning DLA equipment from U.S. military bases in Europe, largely out of Germany and the UK.  The first European auction was held in July 2015 to similar success, with 40,000 unique visitors from 115 countries participating in the auction, and 100% of the equipment being sold.

With the demand for government and public sector equipment evident, now, IronPlanet is making concerted efforts to develop similar partnerships in Europe – with the United Kingdom the first point of call.

New ground, same model

“2016 is going to be a significant time period for both IronPlanet and the public sector marketplace,” said Jeff Holmes – Senior Vice President, Government Solutions and Auction Management at IronPlanet. “One major component of that strategy is a very deliberate push towards expanding our public sector presence into the EU, beginning with the UK.”

“We know that there are tenders being developed by the UK Ministry of Defence (MoD) for the disposal of their surplus equipment. We will be competing for those awards. We have looked very diligently at the value we can bring to European government agencies, and how we can transfer the best practices from our commercial business model to the public services sector.”

These best practices have seen IronPlanet become established as the premier used equipment marketplace for a number of years. They range from IronPlanet’s IronClad Assurance® and inspection reports, which guarantee the condition of any given piece of equipment before it is bought; and its range of marketplace channels – be it the bi-weekly online auctions, or its Daily Marketplace, which allows users to view and bid upon items at any time. Combine these buyer incentives with the low-hour, well-maintained equipment that public sector entities can bring to market, and you can begin to see why targeting the sector has proven such a fruitful endeavour for each party so far.

Utilising the UK’s surplus equipment

Since the success of its initial government auctions, the case for further expansion in the sector seems justified. Not only that, it is being noticed by potential partners on the continent already. Holmes continued, “We have already proven that through an agreement with IronPlanet, we can help drive higher proceeds for rolling stock and achieve this in a far shorter period of time than they experience today. But asset inventories are not just limited to rolling stock – we know from experience in the States that there are other assets that will drive demand too, whether it be textiles, spare parts or electronic equipment. There is no reason why the demand wouldn’t be the same for items based in Europe.”

“We know that the success that we have had through our partnership with the DLA has created a fair amount of attention with public sector entities in the UK already,” he added. “But while that visibility is due largely to our work with defence entities, I would stress that the success of this model is entirely transferable to the public sector, which is why we are making this push.”

In the UK, the Ministry of Defence is responsible for the disposition of surplus equipment from both the military and a number of other government departments (OGDs). These include various police forces, fire and rescue services, prison services, the Home Office, public transport organisations and a host of other public sector bodies. Each department has its own unique disposition needs and types of equipment that would garner significant returns. With each department also having its own budgetary considerations, it makes a profit-maximising partnership with IronPlanet that much more appealing.

With IronPlanet’s commercial model, businesses such as individual construction companies and rental firms can attain excellent value for their assets and earn liquid capital that can be injected straight back into the business. In the context of government and public sector entities, attaining that capital can help shape fiscal budgets in a way that enables a more efficient distribution of spend.

“Government agencies need not simply retire their surplus vehicles to the scrapheap whilst they still hold value to someone elsewhere,” elaborated Holmes. “There have been some changes in the UK MoD which means that the results of equipment disposals can go back into the budgets and be reused in the current fiscal year – whether it’s the British Army or non-defence entities. If we can turnaround this equipment and get 200% to 300% greater value in a more timely fashion, it makes a huge difference to the allocation of budgets that are ultimately funded by the taxpayer.”

Time will tell whether IronPlanet’s push into the European public sector will be as rewarding as it has been in the United States. However, given the company’s impressive results so far combined with the potential of its huge global buyer base, it makes it a difficult opportunity to resist for government and public sector entities throughout the continent.

“Quite simply, if I wasn’t confident of success, we wouldn’t be doing it,” affirmed Holmes.