For vocational fleet operators, commerical vehicles and equipment are important tools.Commercial vehicles and equipment also represent a significant capital investment for your organization. To better control your total cost of ownership (TCO), you need to maximize resale returns when these units reach the end of their useful lifecycle. However, liquidating commercial vehicles – especially those with highly specialized upfitting – is far more complex than simply selling them to your local dealership.
As you prepare to close out 2024 and finalize your fleet strategy for the year ahead, now is an ideal time to reassess your vehicle remarketing strategy to make sure it adheres to industry best practices while also aligning to the needs of your business. To help you craft an impactful remarketing strategy to generate capital that can be reinvested into fleet operations or other areas of your business, here are a few key factors to consider.
EMBRACE A HOLISTIC APPROACH
For some organizations, remarketing fleet vehicles is simply viewed as a way to dispose of a unit at the end of its useful lifecycle and extract some resale value. However, for best-in-class fleet operators, the remarketing process is a vital component of minimizing their fleet’s TCO and their strategy for maximizing returns typically begins before the vehicle even hits the road.
You’ll want to give some consideration to potential resale value at the time of ordering. While it is important to spec your vehicles appropriately for their intended function, when possible, think about the options and upfit in terms of what will appeal to the largest pool of potential buyers when it is time to sell. This holistic approach to fleet management will help you optimize your remarketing strategy, allowing you to get the most value for your assets in a timeframe that works for your business and, in turn, lower your overall operating costs.
FIND YOUR HIDDEN GEMS
Understandably, many businesses place so much emphasis on the first three phases of a vehicle’s lifecycle – buy, drive, and service – that the final phase, sell, is often an afterthought. As a result, most organizations likely have several units gathering dust in the corner of their facility, taking up space and depreciating by the day. For vocational fleet operators, this is especially true for highly specialized units and other commercial equipment such as forklifts or trailers.
To uncover your fleet’s hidden gems that can be liquidated to generate capital, here are a few areas to explore:
- Underutilized assets – Through the use of analytics, you likely know exactly which units are not being used to their fullest potential. This information may uncover an opportunity to right size your fleet and sell units that are no longer needed for immediate gains.
- Highly specialized, rarely used assets – If you have vehicles and equipment that only serve a niche need, assess whether you can outsource for these units for the few times when they’re necessary. If outsourcing won’t hamper your business, you may be able to sell these assets for a substantial return.
- Costly underperformers – Dig into your fleet data – maintenance costs, downtime, fuel expenses – to find the units that no longer deliver optimal performance or are a drain on your budget. Say goodbye to these costly underperformers and work towards a healthier budget.
- Old commercial equipment – Forklifts, trenchers, or other specialty equipment; these tools often sit idle at the end of their lifecycle. Typically, the ROI doesn’t justify costly auction expenses and administrative effort but innovative programs (offered by fleet management companies) can help you simplify the liquidation process and realize strong returns by mitigating traditional auction expenses.
The best advice for fleet operators is to conduct a thorough analysis of your fleet operations to understand precisely how your assets are being used to support your business. If you identify assets that are underutilized or no longer needed by your business, you should consider liquidating them immediately to generate capital that can strengthen your operating budget.
LEVERAGE A HYBRID STRATEGY
As you reassess your approach to selling your used vehicles and equipment, you’ll want to ensure you tailor your strategy to the specific needs of your business. You’ll need to determine whether it is most important to maximize sale proceeds or liquidate units as quickly as possible – or most likely, identify a sweet spot somewhere in the middle. This is an area where it is especially beneficial to have a knowledgeable remarketing partner.
When you take your vehicles to auction (either in-person or online), you’re typically able to get each unit in front of the most potential buyers to maximize returns. This is especially true for highly specialized vocational vehicles and equipment which may only appeal to a limited number of buyers. Many auction venues specialize in certain types of units or focus on a particular region, allowing you to direct assets to the most appropriate venue to maximize proceeds. However, when you use these auction venues, you incur expenses such as auction fees and transportation costs that take away from the net return.
For scenarios when time is of the essence, your best option may be a service such as Holman’s BuyDirect program. These types of innovative solutions mitigate market risk, reduce your administrative burden, and allow you to liquidate assets immediately to generate funds within 72 hours.
Another option (depending on the composition of your fleet) is employee sales. This method often works well for both your company and your employees. You’re able to offer your employees the opportunity to purchase a vehicle at a reasonable price while also allowing your company to sell assets quickly and avoid auction fees and transportation costs.
Today, most organizations are embracing a hybrid strategy, leveraging a mix of traditional in-person auctions, online virtual platforms, employee sales, and other solutions. Regardless of the exact channel(s), the strategy remains the same – get the unit in front of the most potential buyers to maximize proceeds and minimize time to sell.
YOU DON’T HAVE TO GO IT ALONE
Whether it’s finding the ideal sales channel, assessing market conditions, determining pricing tactics, or managing logistics, these are tasks that take you away from your core strategic responsibilities. Today, most vocational fleet operators will benefit greatly from partnering with a remarketing provider that.
will help you develop a strategy that aligns with the goals of your organization while also eliminating your administrative burden.
For most organizations, the ideal remarketing partner will:
- Develop a holistic strategy with innovative solutions that align with the needs of your business.
- Provide a seamless, efficient process and manage all logistics to reduce your administrative responsibilities.
- Target the ideal base of buyers for each unit to maximize proceeds.
- Minimize expenses typically associated with the resale process.
- Supply comprehensive analytics to help you assess performance and adjust to market trends to ensure you’re always getting the best value for your assets.
It is important to keep in mind that there is no one-size-fits-all approach to liquidating fleet vehicles and other commercial assets. Together with the right remarketing partner, you’ll be able to develop a winning strategy that delivers more options, more flexibility, and ultimately, more value for your vehicles and equipment.
ABOUT THE AUTHOR
Holly Vollant is the remarketing manager for Holman. To learn more, visit www.holman.com.
