On average, 20% of an organization’s assets is surplus to its needs. In other words, one-fifth of your assets are just sitting around, depreciating, and taking up space. These obsolete or no-longer-used items don’t have to be a burden. Instead of letting your assets sit around and depreciate, you could sell them on the secondary market and recoup a large portion of your initial capital investment.
Wondering how to get started? Read on for a simple three-step process to get your surplus ready to sell.
Step One: Identify Your Surplus
To start, you must know what and where your surplus assets are. To find this out, you’ll need to conduct a full-scale asset audit of your facility or facilities. Create an asset register and record vital data – such as asset name, type, condition, location – for every asset. This will help you figure out which items are redundant or no longer needed.
To stay up-to-date on your assets and their condition, consider investing in a cloud-based asset management software – or partnering with a vendor that has this technology. Asset management software allows multiple users across your company to update, track, redeploy, sell, and request assets. Using this type of software makes asset management much quicker and more convenient than manually updating an analog asset register.
Step Two: Decide What to Do with Your Surplus
After identifying your surplus, you should then decide what you want to do with the items. You don’t necessarily want to sell every surplus item you have – some assets might be better off redeployed elsewhere in your company or may be too depreciated to earn you much recovery in the secondary market.
Since what you do with your assets will depend in large part on their potential value, you should appraise them to determine their value. Consider outsourcing this function to a trusted partner if you don’t have the specialized knowledge in house. An accurate appraisal will empower you to make the smarter asset management decisions and set sale prices that ensure you get the recovery you deserve.
Step Three: Select Sales Channels
Once you determine which items to sell, you should determine the appropriate channel through which to sell them. There are many options available, each holding distinct advantages. Focus your efforts on these channels below:
- Online auction: Auctions can be targeted by industry and asset type to maximize interest. The competitive bidding environment of auctions increases prices, generating higher recovery. Plus, online auctions allow you to reach potential buyers anywhere in the world!
- Private treaty: With this method, you negotiate directly with a buyer or a small group of buyers to agree on a purchase price. This approach is ideal for unique or specialized assets with smaller potential markets.
- Buy it now: The online auction’s speedier cousin gives buyers the option to immediately purchase assets directly from your website. While this option is quicker and less risky than an auction, the set price caps your potential recovery.
- Principal deal: By selling your assets outright to a third party, you get immediate cash and avoid risks associated with selling in the secondary market. But you also risk losing out on additional capital if the item sells for more than expected.
The right channel to use will depend on the asset, market, recovery goals, and other factors.
To learn more about selling your assets on the secondary market, read our ebook, How to Sell Your Surplus. This ebook will provide you with additional information on the above 3 steps as well as 4 additional steps on how to sell your surplus once you’ve determined you’re ready to sell.
Or contact us for more information on how we can help you with your surplus assets.