The aviation industry is transforming the way ground support equipment life cycles are being managed. GSE operators seek new strategies for extending use of their fleet, preserving capital to invest in revenue generating services and returning a greater value for surplus assets. Managing the life cycle of GSE can be an unnecessary distraction from core operations. We intend to offer some approaches designed to minimize time and curb costs while decommissioning equipment from a fleet.Organization
The first step in returning value is to understand what you have. You must organize the details of your equipment in a way that will easily reveal its worth. One way is to create a spreadsheet listing the details of each piece. You will want to capture information like the manufacturer, the year it was made, model number, part number and serial number. Also record the general condition of the equipment including the overall shape of the unit, the number of hours, maintenance records and other relevant specifics. Digital photos can be illuminating for your customer, but be careful how you store them in your spreadsheet. They can easily increase the size of the file unnecessarily. Try to store links to the pictures or use thumbnails.
The selling process takes time, and you never know when you will cross paths with the right buyer for your equipment. Hopefully if you have organized your details properly, you will easily be able to provide the customer with the right information to close the deal. And, of course, if you need to get management’s approval to sell equipment, be sure to have this in place before you take the equipment to market.Methods
Once you are organized, you need to consider how to sell your equipment. Methods for selling vary in level of difficulty and the value they return on your equipment. We will discuss a few here and let you decide the right one for your needs.
Scrap: A quick, easy way of disposing of your surplus assets is to send them to the scrap yard. Unfortunately, scrapping equipment is not going to bring the highest yield for the equipment. You may face removal fees for certain items.
Auctions: Auctions are a good solution if you have a large amount of equipment that you need to move quickly. They require a lot of pre-planning, but reputable auction houses can help with the logistics. If you have a small amount of equipment, try online auctions. In the GSE world, there are several alternatives, including eBay. While auctions should yield more than scrapping your equipment, they can be unpredictable. A hot item may have several people bidding on it, and it could sell for more than you would consider asking for it if the deal were done in isolation. More commonplace equipment may only return pennies on the dollar.
Classified ads: A direct approach is to advertise your equipment in print media or online. Trade publications have sections where you can advertise your equipment. There are Web sites dedicated to listing equipment. You may even want to create a page listing your equipment on your company’s website.
Direct sales: The best way to maximize the return is to do your own direct sales campaign. This requires the most effort. Start by proactively contacting all of the companies nearby who use GSE. Then broaden your scope to include other users of GSE. You could call customers located anywhere, but if you limit the amount of freight that is necessary for the customer, your chances of getting a deal are greater.
As part of your direct sales effort, you can call GSE resellers who buy equipment they can sell. Often they have customers that are always looking for equipment.Pitfalls
When you deal directly with customers, you open yourself up to a host of issues. The first is the credit risk. Cash in advance is probably the best way to go, and you may want to be sure that the check clears before you release the equipment. Even if you get paid, you may not be out of the woods. Once the customer gets the equipment, they might request a refund. At this point you face a dilemma: ignore the request and anger the customer or give the refund and lose the sale. Freight also can be a large issue. Clearly indicate which party will be handling the freight when the deal is closed. Finally, we have seen cases where customers have bought surplus equipment, used it while they were waiting for a new product and then tried to return it when they no longer needed it! While cases like these do not represent the norm in the industry, we have seen it too many times to not mention it here.An Easier Solution
An alternative to braving the hazards of selling your surplus GSE by yourself is to partner with a company that faces these hurdles on a daily basis. Companies in the GSE industry specialize in doing sales under Asset Recovery Programs with their clients. In these programs the clients consign their equipment to a reputable partner who will take the equipment to market. The client agrees to share part of the revenue in return for shielding them from all of the risks discussed above. We have found that clients enjoy the ability of maximizing their return for a minimal amount of effort. The partner takes care of all of the logistics regarding the sale according to a pre-negotiated contract.
When you begin your search for this type of partner, be mindful of the qualifications necessary. Look for one with a diverse channel, such as direct sales, inside sales and e-marketing alternatives. Find one with a large database of contacts, a broad understanding of the market and a competent staff.
At Century GSE, we understand that selling your surplus equipment can be time-consuming, frustrating and difficult at times. However, it can also be rewarding for you to free yourself of your surplus equipment while recouping its value at the same time.