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Home : Articles : Auction Software : Investment Recovery

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INVESTMENT RECOVERY

When companies purchase a piece of machinery or office furniture, they are making an investment in their business. Of course, those investments aren't going to remain useful forever: Machines need to be replaced and a change in decor forces a revamping of the office furniture. So what do these firms do with this equipment or materials when they are no longer useful. In most cases, these items are sold in attempt to recoup some of that initial investment. This practice is known as investment recovery.

Unfortunately, most companies don't even expect to come close to earning even a significant percentage of what they paid for the goods, so they settle for what they can get by selling the goods at a fixed-price to a liquidator or by participating in an in-person auction. Neither of these approaches are truly methods of investment recovery.

Currently, the one of the best methods of investment recovery is the online auction. Online auctions, unlike other methods of selling goods, have the remarkable ability to drive up sales prices significantly. For example, a business has a fleet of company cars that need to be replaced. The company cars may have low mileage but they are about 3 years old. In order to get rid of them fast to make room for the new fleet, businesses may simply sell them to employees or to the public for a fraction of the investment cost and, in most cases, of what they would bring in on a used car lot. If that company instead sold each car through an online auction, they could just as quickly get rid of the vehicle and could earn back a greater percentage of what they has paid initially.

Online auctions make this possible in a couple of ways. First, all auctions are superior to fixed-price sales because the seller often may stand to make more money. The seller can set a minimum price and can then watch the price rise from there. With fixed price sales, the only price negotiations would drive the selling price down, not up. Second, auctions inspire competition and that further drives up the price. Whether online or in-person, auctions work effectively because people want to be winners, even if it means they'll spend a great deal more than they had intended to make a purchase. In these cases, the big winner is usually the seller. Third, online auctions are convenient and are open to more people. Many potential buyers are immediately cut out of the buying process with in-person auctions. Some are not comfortable with the auction atmosphere, others have scheduling conflicts, and still more may be located in another country unaware that the auction is even taking place. With an online auction, all of these problems are corrected. People can bid from the comfort of their home or office, and people all around the world have the opportunity to participate in the auction. Finally, online auctions can be completed quickly. Making the arrangements for a traditional auction requires time and sometimes the date of the auction may be several weeks into the future. With an online auction, the item can be listed and the bidding can start almost as soon as the decision to sell it is made. Plus, the seller can specify the length of time for the online auction to last.

Investment recovery departments can use these benefits to help themselves or their clients regain a larger percentage of their initial investment because more people will have access to the process and because competition almost always leads to a higher paid price. Companies that are upgrading their equipment, moving or closing an office, emptying their inventory, or in any other way needing to get rid of their goods can make use of online auctions in order to make more money from the sales than they would through either of the traditional means of investment recovery.

When a company makes an investment by purchasing furniture, cars, equipment, or other goods for the business, they may not be thinking about the point in the future when those goods will need to be replaced and that investment will need to be recouped. But in that event, online auctions should definitely be one of the primary options to consider.

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