Are you looking to save money on specific restaurant equipment? Then auctions might be the best solution for you, but if you’re unsure of how they work or where to begin, you’ve come to the right place. This blog post provides all the details you need to get started with restaurant equipment auctions. Read on below to find out more.
What is a Restaurant Equipment Auction?
These kinds of auctions are typically held online or in a live format, where people can spot great pieces of restaurant equipment at bargain prices. However, online auctions do have their risks and at times, we could be buying blind. To ensure that you get the right items for the price you want, make a purchase only from reputable companies.
It should also be noted that online auctions aren’t absolute auctions, which means that even if you bid $100 for the item, the seller may want $500 from the sale. However, a live auction can be an absolute auction where everything goes, even if you only bid $1.
Why Buy at an Auction?
If you’re looking to upgrade a few cooking materials or are just about to get started with the restaurant business, the best place to start is at a restaurant auction. There’s already a lot of thought and planning into opening a business, so don’t let the purchase of big-ticket items add to it. There are also plenty of advantages to buying at an auction that you should consider before making any huge purchases:
Reduced Capital and Equipment Expense
Equipment will cost much less when it’s not brand new. At most auctions, the price you end up paying will usually come down to just a fraction of the cost for the same tool or equipment when purchased brand new. This will allow you to stretch your capital further if you have a good eye for auctions.
Plenty of equipment, such as linens, glassware, flatware, and baskets can provide you with huge savings when purchased in a used condition. Other items to look out for include chairs and tables; however, make sure they don’t look dated compared to the rest of your space. You can also use the money you saved towards other needs in your restaurant, such as the creation of new recipes.
Around 59% of restaurants fail after just three years in the industry. As a result, plenty of furniture and appliances in great condition can be delivered to a new home. Moreover, because so many restaurants don’t make it past three years of operation, business owners can have the opportunity to upgrade their restaurants with slightly used equipment.
For example, a cooktop that’s being auctioned has already lost its over-the-top value as soon as it was turned on for the first time. Just like the car industry, equipment used in restaurants tends to depreciate quickly. In the end, you will get a good deal on top-notch equipment even if it has a bit of mileage on it. With a lightly used item, you’ll get more bang for your buck and a bit more peace of mind when you don’t have to worry about paying big sums of money.
- In a live auction, buyers have the chance to name their price
- As a buyer, you can confirm that the sellers are looking to liquidate their equipment
- An auction can eliminate long negotiation periods
- Buyers are treated fairly and provided the same terms as other buyers for the same property
- Auctions happen immediately and will produce immediate results
Kinds of Auctions
There are various ways to conduct an auction, whether it is held live or online. However, these are the two most practiced and most straightforward ways to conduct an auction:
In this type of auction, an auctioneer will start by asking for an opening bid. The audience will then provide their bids, where the item escalates in price. The item will then be awarded to the highest bidder.
High Bidder’s Choice
Here, similar pieces of equipment are grouped to be placed on display next to the auctioneer. Bidders will then have the chance to bid for items of their choice on the display. Once the highest bid is determined, the item is removed from the choices and another round of bidding can start.
How to Prepare for a Restaurant Equipment Auction
While auctions for restaurant equipment can be exciting, they can also be a bit scary for both experienced and inexperienced bidders. So before you head over to an auction, be sure to consider important things such as the most important pieces of equipment you need, your budget, and the available space in your restaurant. Here are a few tips that will prepare you for an auction for used restaurant equipment.
Before the Auction
1. Create a realistic budget by checking your accounts to see how much you can afford to spend. Auctions are designed to help you save more, so if an item is outside of your budget, look for a bargain on a different piece of equipment. Impulsive buying can only cause you to fail in your plan to save money.
2. Make sure that you understand how an auction works. You can do this by conducting some research before you start participating in auctions. In this way, you can get the knowledge you need and how others might bid before actually bidding yourself.
3. Check on your space and needs — if you buy an oven that’s over your voltage capacity or is too big for the space you have, you’ll waste a lot of money. When mistakes like this happen, you won’t be able to use the right equipment in your restaurant. To avoid problems like this in the future, be sure of the things you need and how they will fit in your space.
4. Ensure that the auction house is reputable and check how long they have been in business. This will help you get the peace of mind and assurance that you will get the item promised to you.
5. Find out what the auction is for — ask questions such as why the restaurant needs to liquidate. Did they go out of business or are they looking to upgrade their equipment? Knowing the answers to these questions can help you prepare ahead of time.
During the Auction
6. Knowing your competition will give you an advantage. If the auction is crowded and the bidding moves quickly, it’s best to step aside and avoid overspending on equipment that everyone wants. But if the auction is quiet and the bidding is slow, then you’ll likely get pieces for a lower price.
7. Choose your purchases wisely and talk to auction staff about pieces that interest you. If you can, find out as much as you can about the product’s history and where it originated from. This is an important part when it comes to purchasing used items. An oven that has a weird smell may have big problems such as power failure or insufficient cooling.
Try a Restaurant Equipment Auction Today
When you’re ready to try your luck at a restaurant equipment auction, here are just a couple of last tips to keep in mind. Bidders need to understand that everything bought in an auction will be sold to them in an “as is” condition. Also, sellers should get paid within two to three business days, while items can be picked up within 1 week.