Ritchie Bros. Auctioneers sells $5 billion worth of construction equipment over the Internet

Ritchie Bros. Auctioneers Inc. (TSX:RBA) has set a new record as it exceeded US$5 billion in online equipment sales. The company conducts hundreds of unreserved public auctions each year, selling a broad range of used and unused equipment, trucks and other assets utilized in the construction, transportation, agricultural, material handling, mining, forestry, petroleum and marine industries.

Ritchie Bros. Chief Operating Officer Bob Armstrong attributes this milestone to changing behaviour patterns.

“We sell more used trucks and equipment than anyone in the world, so by virtue of our position, as more and more people wanted to do business online we were there and we were a bit of a beneficiary,” he said.

The auctioneer introduced its real-time online bidding service in March 2002 as an enhancement to the live auction and eventually introduced online bidding in an additional six languages.

Despite the recession and a dip in construction, heavy duty equipment was still in demand.

“All the work that we see going on around us is a little bit less, but it’s still a lot. And all those people need equipment,” said Armstrong.

The company conducts hundreds of unreserved public auctions each year, selling a broad range of used and unused equipment, trucks and other assets utilized in the construction, transportation, agricultural, material handling, mining, forestry, petroleum and marine industries.

The recession actually helped turn some buyers to Ritchie Bros. auctions as they realized they didn’t necessarily need to buy brand new equipment.

“We actually saw our bidder numbers go up significantly during 2008/2009 when the recession was at its worst,” Armstrong said, adding that some have remained as regular Ritchie Bros. auction participants while others have gone back to purchasing new equipment.

Armstrong said the unreserved auctions sell out each time and they are quite indicative of the market. He said though they don’t usually sell many cranes, there are currently many cranes on the market in Houston right now.

Areas of demand also change. Armstrong said currently the strongest demand for heavy equipment is in Australia, Western Canada and the Middle East with South America sometimes becoming very aggressive.

“The United States and western Europe, which have traditionally been very strong markets, are still struggling quite a bit,” he said.

Armstrong added that this has allowed Canada and Australia to buy a lot of equipment in the U.S. and take it back home.

“They have strong economies, relative to the United States and they have very strong currencies compared to how they used to be so they have good purchasing power.”

Armstrong expects to have $1 billion in online sales this year, but said the majority of people still attend auctions in-person.

“The majority of people still want to be there physically with the equipment. Even the vast majority of the online buyers are doing inspections of the equipment before they bid, they just don’t want to be there on sale day because they’re busy,” explained Armstrong.

“We make it easy for them to bid when they want to but they still want to be there to kick the tires,” he said.

“I think that’s an interesting statement about our industry that probably never changes entirely.”