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Equipment values can fluctuate due to a variety of factors. This can create challenges for equipment vendors, who must stay on top of changing market conditions to price their inventory accurately. An experienced, accredited equipment appraiser plays a key role in this process.
By conducting thorough inspections and assessments and staying current with industry trends, an appraiser can help equipment vendors understand the current value of their assets. This takes the guesswork out of setting prices and helps vendors remain competitive. If you own and operate an equipment vendor business, keep reading this Balboa Capital blog article. In it, we explain what an equipment appraiser is and why equipment vendors need their services.
Equipment appraisers are specialized professionals.
Equipment appraisers are uniquely trained to inspect machinery, vehicles, technology, and other types of assets and determine their value in an unbiased and objective manner. Appraisers complete training and certification programs through one (or more) professional organizations. These may include the American Society of Appraisers (ASA), Association of Machinery and Equipment Appraisers (AMEA), and National Equipment and Business Brokers Institute (NEBBI).
In addition to these national organizations, there are many local associations that focus on appraisal training and certification. The cost to get equipment appraised can vary, as can the pricing model. Appraisers may charge a flat fee, a per-asset fee, or an hourly rate.
An appraiser provides you with market value pricing.
Determining the price of new or used equipment for your vendor business can be difficult. Equipment values can rise or fall due to factors such as age, condition, demand, operating costs, and advancements in technology. Additionally, the brand and reputation of the equipment can influence its pricing. Setting prices may become complicated and time-consuming if your vendor business has a large inventory.
An equipment appraiser can help streamline your pricing strategy by accurately assessing the value of your inventory. Their expert evaluation enables you to establish a price for your equipment, one that can be well-received by customers and assist you and your sales managers in moving more inventory. If your appraiser identifies equipment that is either overpriced or underpriced, you can adjust prices accordingly.
Equipment appraisals are a vital part of the financing process.
When customers want to finance or lease the equipment your vendor business sells, their lender needs to know the value of the equipment. The equipment’s value will determine the amount of funding required for the equipment loan or lease, not including interest rates and additional fees. An equipment appraisal provides the lender with important information, helping them make informed decisions and minimizing unexpected issues during the application and decision-making processes.
Next, an equipment appraisal is required when applying for insurance coverage. The equipment’s current value and condition (e.g., age, usage) will determine the insurance coverage amounts. An appraisal can help establish accurate premiums and prevent underinsurance.
Realistic pricing can help boost equipment sales.
Sales are the lifeblood of your equipment vendor business. By setting realistic prices with the help of an equipment appraiser, you can attract potential customers without undervaluing the equipment you sell. This approach can help boost sales volume, increase cash flow, and foster customer trust and loyalty, as buyers feel they are receiving a fair deal.
Plus, competitive and justifiable pricing can lead to positive word-of-mouth about your vendor business. When customers perceive that they are receiving good value for their money, they are more likely to share their favorable experiences with others. Lastly, establishing trust through fair equipment pricing can encourage repeat business.
Transparent pricing saves time.
The results of your equipment appraisal will give you recommended price points for the equipment in your showroom or on your lot (or both). That means you and your sales managers will be able to clearly communicate prices upfront with customers, thereby eliminating the need to research prices online or contact manufacturers to make price inquiries. This saves time for you and your customers and accelerates the sales process.
In addition, when you and your sales managers are well-informed about the prices of your products or services, it enhances your vendor business’s credibility and conveys trust and professionalism.
Appraisals help you monitor the value of your inventory.
Managing your vendor business’s inventory—whether you’re using inventory management software or a spreadsheet—can be a complex task that requires careful attention. This process becomes even more challenging when you factor in the need to account for items that are sold, returned, or otherwise removed from your inventory.
Additionally, it’s essential to be aware of the fluctuation in pricing that can occur over time. Keeping the values of your inventory up to date is necessary for maintaining accurate financial records and assessing your vendor business’s overall health. By hiring an equipment appraiser to evaluate and price your inventory, you can track its value regularly. This can help you plan for growth, understand sales trends, and make informed business decisions.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.