This insolvency refers to that of a debtor who is unable to meet his payment obligations to one or more creditors.
Inability to meet payment deadlines, lack of liquidity and high levels of debt can all trigger insolvency.
Advantages of a Liquidation Auction?
The affected company's assets include its full item inventory, i.e. furniture, vehicles, machinery etc.
It is the duty of the liquidator to arrange the sale of these items accordingly, in order to best service the outstanding creditor claims.
A liquidation auction is a very effective method of carrying out this liquidation. High-quality used machines,
proven in production, such as borers, saws and routers are of particular interest to the administrator.
These machines can produce high revenues, and can aid in the quick recuperation of debt owed.
On the other hand, a liquidation auction can offer a prospective buyer many advantages. As part of such an auction,
fully functioning used machinery can be purchased on very favourable terms for the buyer. In most cases, the final price is significantly lower the current market
price of comparable machines.
This low cost factor is an important consideration, especially for smaller companies; factory modernisation,
enlargement or the replacement of defective machines can be organised at short notice, with a relatively low levels of investment.
Another advantage of such an auction is the rapid availability of the machines. This can allow a company to quickly and efficiently react to increases in market demand,
or expand the current product range. In addition to these benefits, machines in a bankruptcy auction have the added benefit of being straight from the production line,
and hence are smooth running and well maintained. As a rule, new machines require a certain break-in period to ensure proper function.
This loss of valuable production time is circumvented when purchasing a used machine.
What types of Liquidation Auctions are there?
Liquidation auctions (or insolvency auctions) take the form of online auctions or live auctions.
A live auction takes place at the site of a used machine, whereas an online auction can be attended from anywhere, and gives a buyer access
to a large and diverse range of available machines, all within a few clicks. This is combined with the speed and simplicity of the bidding process.
Unlike live auctions, which require a personal presence, one can participate in an online auction from any location, at any time. This is truer now
than ever before with the Surplex Auction App (for Android
and iOS). It is even possible for a buyer to bid on multiple auctions simultaneously.
Surplex usually offers hundreds of items from many different locations, and the industrial auction house makes participation in this broad range
of auctions logistically possible. In addition to extensive documentation on each machine (pictures, videos, in-depth technical information etc.),
Surplex also offers the possibility to visit most machines on-site to inspect them in operation. When you have decided on a machine, you just need to
follow the steps described here to register online and participate. On auction day,
each bidder is kept informed in real time of the current status of the bid process via email. Once a highest bidder has been determined,
this bidder is personally contacted and assisted by qualified personnel throughout the entire processing procedure, right through until the machine is placed into production.
Taking the Right Steps
Our liquidation auction preparations are always very systematic and thorough. Once proper plans for insolvency auctions are laid down,
the process will progress smoothly with our team of experts. Most business liquidation auctions follow the outlined comprehensive process
below in order to reap the maximum benefits for both the seller and the buyer.
The Asset Liquidation Auction Process:
- Determine the liquidated assets with an inventory list
In your list include thorough information regarding each asset. Valuable information such as warranty certificates, purchase details, state of equipment, repair records etc. Also consider any repairs which may need to be carried out to help maximize potential returns.
- Determine the most appropriate value of your asset
Carefully consider the amount of time you have available, asset quantity, prevailing macro market conditions, asset conditions, and the variety of assets. Due to a number of market conditions directly affecting an asset’s value, often it gets priced below its actual market value. However, services of qualified appraisers may help determine the liquidation value of your assets.
- Plan accordingly considering all the necessary resources
Once an asset’s liquidation value has been established, Surplex will help you with an in-depth strategy that includes working with our team of certified professionals. Critically evaluate costs involved and set a suitable deadline.
- Implement your strategy
Remain focused on the sales price and network with other fellow folks within the industry including competitors and suppliers. Surplex.com liquidity experts will help you find a buyer.