When it comes to the sale and purchase of construction equipment there are a lot of different factors that impact the price of the machinery. The chance to buy high-quality equipment at a lower price is offered by the used construction equipment market, which is a vital component of the construction industry. The pricing and sales of secondhand equipment are influenced by a number of different circumstances, though. We will look at a number of factors in this blog that affect the sales of used construction equipment, including the size of construction projects, the accessibility of replacement parts, price, the supply/demand cycle, specialization, the state of the economy, the manufacturer, and the traditions of the industry. Both buyers and sellers may make educated choices in the used equipment market by being aware of these elements.
SCALE OF CONSTRUCTION ACTIVITIES: The number and scale of construction activities directly impact the scale of sales of used construction equipment and, as has been the case in the past few years, as the construction industry expands, so does the sales of used equipment.
AVAILABILITY OF REPLACEMENT PARTS: Used equipment can be quite old and hence it is of great consideration to the buyers whether the replacement parts of the machine are still made by the manufacturers, especially the parts of the machine that undergo the most wear and tear and need to be replaced soon. Therefore, the sales of used equipment that have the option for replaceable parts are significantly more than the machines that the original manufacturers do not manufacture the parts for anymore.
PRICE: The listed price is definitely a very relevant factor in the case of used equipment as the price should reflect the condition of the equipment based on factors such as its maintenance, age, operating capacity, etc. It should be reasonable as a ridiculously low or high price both send a wrong signal to the buyer.
SUPPLY/DEMAND CYCLE: Demand and supply in the market determine the price and hence sales for the equipment. It determines who has the advantage as conditions in the market tend to change. For example, in case the market for certain used equipment gets saturated, the buyer has many options and has the upper hand and sales can suffer.
SPECIALIZATION: Specialized equipment tends to be less expensive than machines with more general and diverse uses and such equipment has specific and fewer buyers. Consequently, the resale value of such specialized used equipment has to be very carefully decided in order to enable and increase sales.
ECONOMIC CLIMATE: Economic conditions and stability can boost or hinder sales in any industry and so is the case in the used equipment industry. The costs of owning the machine along with fuel and operating costs can vary significantly in different economic conditions. For example, in times of recessions, the economy is slow and people wouldn’t be buying houses, and due to increased available supply, the prices will be low as well, so the construction industry will be slow too and, in such instances, the sales of used equipment will be driven down.
MANUFACTURER: Few players in the equipment industry dominate the market and brand loyalty among buyers is very strong. This brand loyalty also trickles down to the used construction equipment market where brand name holds a lot of value and sales of even used equipment of the dominant brands with loyal customers is high.
INDUSTRY CULTURE: Changes in industry culture and norms in the connected industries can have a significant impact on what kinds of equipment is bought. For example, with the recent move towards strict implementation of labor laws and ensuring labor safety in industries such as construction, it has become imperative for companies to buy equipment, especially used, which is safe for labor to use and hence demands with respect to that have risen and so heavy equipment suppliers need to keep that in mind too.