Can I build a business as someone who finds buyers for heavy-equipment sellers?

[Joshcam8395]

I've posted a couple of business ideas here before now, and I really appreciate all the responses you've given me. It's been a great help :)

I've got another one for you, if you'll let me pick your brain for a few minutes ;)

Do you think I can build a good business by earning finder's fees--finding buyers for sellers?

I would be focusing on used heavy equipment.

I LOVE machinery of all descriptions; it's always been a passion of mine--especially heavy off-road equipment. I love every aspect of it: design, operational safety & techniques, operational theory, field use (and stories), maintenance, fabrication, manufacturing, repair, sales, etc.

My background/experience with selling used heavy equipment is with agricultural equipment (tractors) and smaller machines.

But I learn quickly, I love talking with and helping people who buy, sell and operate heavy equipment, and I sincerely want to help sellers find buyers.

Here's my rough business & procedural plan:

--1. Register an appropriate business name locally

--2. Register my business name online as a domain, and set up an email with that name, to lend myself credibility and a professional approach (example: josh @joshcampbellequipment. com) Also, can set up a blog there, where I can blog about my interests in heavy equipment/equipment, sales, and related topics, AND (later) feature testimonials of satisfied clients to establish added credibility.

--3. Locate reliable, reputable buyers, and confirm exactly what they are looking to buy, price range, etc.

--4. Locate owners and dealers who are trying to sell a piece of used equipment on sites like Craigslist and specific online machinery classifieds

--5. Use a realistic, genuine approach to start conversations with sellers, so that I can eventually offer them a helpful service, even though it would technically be "unsolicited."

--6. Once a seller wants my services, we will exchange letters, mutually agreeing to simple terms (including commission to be paid) in writing.

--7. At that point, I provide the buyer's complete contact information to the seller, and I leave the picture. IMPORTANT NOTE: The seller and the buyer work a deal themselves, or not at all. I would not be acting as a dealer, an agent, or a representative in any capacity. All I'm doing is selling qualified contact information that I have worked to obtain and verify.

--8. If there is a transaction, the seller notifies me, and pays me the previously agreed-upon finder's fee.

Then, I repeat steps 5 through 8. And, in the meantime, I would always be increasing the number and quality of my buyer contacts.

So...

What do you think?

I believe there is a market inefficiency, with so many people who are too busy to locate qualified buyers, weed out the dead-ends and unqualified buyers, and bring buyers to sellers.

Even though there are many websites and publications out there where sellers can list heavy equipment, I see a lot of good, used machinery that just never gets sold.

In a nutshell...

Many sellers and buyers are too busy to put the work into finding each other, and websites and publications don't always do the job of moving equipment; I believe I can help!

Do I have a viable business model here?

[huggytree]

why not just be a salesman for a heavy equipment company????

how will you sell equipment from craigs list??? what if the sellers are bad?

your trying to match a buyer and seller.....since sometimes your seller is just anyone from craigs list I don't see how you can make the seller pay your fees..

what if the buyers are bad??

seems like a lot of work setting it up and your always relying on strangers to do the right thing.....and if they don't you get blamed

[Joshcam8395]

why not just be a salesman for a heavy equipment company????

Because I'm an entrepreneur, not an employee. I want to work for customers, not a single employer who will pay me a fixed salary and flat commission, if any. Plus, I enjoy big challenges!


how will you sell equipment from craigs list??? what if the sellers are bad?

Excellent point; by talking at length/in depth with each seller, I will have an excellent chance at discerning whether they are good or not.


your trying to match a buyer and seller.....since sometimes your seller is just anyone from craigs list I don't see how you can make the seller pay your fees..

That's possibly the biggest gamble in this proposition. Each seller and I will be exchanging letters agreeing in writing to the terms of the (possible) sale, and commission payment to me. Again, it all comes down to finding honorable people to deal with.

Plus, many of the listings on sites like Craigslist are dealers themselves, so they own businesses already. Their salesmen/advertising combination can't move a piece of equipment off the lot locally, to make room for more valuable newer machinery, so out of desperation, they throw it online and hope for the best. I think I can help!

And, dealers, being business owners, have a reputation to maintain, and I would assume are more reliable to honor a written contract, generally; plus, they more readily see the value in spending money (a small commission payout) in order to make money (a large equipment sale).


seems like a lot of work setting it up and your always relying on strangers to do the right thing.....and if they don't you get blamed

As I stated, I will be thoroughly verifying the buyers. I just emailed a LARGE buyer on the west coast (publicly traded and owned by Mitsubishi) that is sucking up used, heavy equipment like a giant vacuum cleaner--but who knows about them?

So many sellers don't have the time to find a power buyer like that...

...and that's where I can step in and help!

Thanks for your points, Huggytree!

Let me know if I missed anything, or if I've forgotten something :D

POST EDIT: I am concerned about one thing, though. I want to model an existing, successful business. My automatic nature is to innovate; but I would rather duplicate somebody who is already successful at something, and reach their level of success, and THEN innovate, if I want to.

And, I only know of some people who earn finder's fees by finding buyers of entire businesses (purely B2B), rather than portable assets like heavy equipment.

I know the late, great Jim Straw earned a fortune as a finder decades ago, finding buyers for sellers of all kinds of things; but can I do this in 2014 and beyond?

[Fulcrum]

This can be, and still is being, done. I don't think that this service will ever not be needed, though markets may change.

[Joshcam8395]

This can be, and still is being, done.

Thanks, Fulcrum!

That's encouraging to hear, because I really was wondering about that.


I don't think that this service will ever not be needed, though markets may change.

I agree; I suspect you are much more experienced in business, and/or machinery sales than I, so that really helps :)

[trunker]

I know nothing about this business but I do know that there is always a large lag time in getting parts for heavy equipment. My dad owns several Case front end loaders and it always takes forever to get some parts. Alaska gold mines are always in need of expedited parts delivery. If there is a way of maintaining a national database of available parts you could then match those parts to the people that need them and if they buy you could charge a small finders fee. You could use hot shot drivers also to expedite if needed. IDK just thinking.

I know that you were not talking about parts but I am just throwing out what I know.

[Joshcam8395]

I know that you were not talking about parts but I am just throwing out what I know.

Thanks, trunker!

I was not aware of that parts supply problem.

I know that mining equipment often has very large, expensive replacement parts; for example, it can cost upwards of $30,000 to replace one tire on a haul truck!

So, your idea is basically this: build a database of heavy equipment parts sellers, and find buyers for them.

You've got my wheels turning :)

[kimoonyx]

What I am wondering is what value you are giving to customers other than pointing to a place to buy, which the internet is really good at. Let me be specific, are you working more for the buyer or the seller? Are you helping the seller get a better price because of your knowlege of heavy machinery, or is it the opposite? Ie you know the market and are able to negotiate better deals for the buyer. I feel like its hard to do both.... I know the value of information, so I dont want to say that there is no way to make money in a "directory" role... I have done so in the past connecting folks to franchises before I sold that directory to a larger competitor. In this case tho, its hard for me to see why searching the web for a machine or part is something the customer is going to pay you to do.

I dont want to discourage you. I beleive small business is really the best way to make decent money now... Just help me understand more on what value you are planning to give. To me, it should be very easy to explain what you want to do... The big picture of what you offer should be evident to a customer within a very simplistic description. If you find yourself having to rationalize why your role exists... Its hard to sell.

[Joshcam8395]

What I am wondering is what value you are giving to customers other than pointing to a place to buy, which the internet is really good at.

That is a good point, Michael. I am assuming that certain sellers are not finding buyers, despite the power of the Internet. I really need to start living by this saying: "NEVER ASSUME!"

I should research into just how efficient the marketplace actually is, as it stands. I must be able to answer "Yes" to this question with absolute certainty: "Am I really needed to make things happen?"


Let me be specific, are you working more for the buyer or the seller? Are you helping the seller get a better price because of your knowlege of heavy machinery, or is it the opposite? Ie you know the market and are able to negotiate better deals for the buyer. I feel like its hard to do both....

As the business model currently stands, I will be working more for the seller.

You are right: it would be quite a juggling act to try and get the perfect price for both buyer and seller each time!

That's why I plan to stay out of negotiations altogether. My job is to bring a qualified buyer and a qualified seller together, and let them negotiater their own price--if they are right for each other.

The only thing I could do would be to acquire and maintain thorough knowledge of each buyer, and who will pay the highest price for a given type/condition of equipment.


I know the value of information, so I dont want to say that there is no way to make money in a "directory" role... I have done so in the past connecting folks to franchises before I sold that directory to a larger competitor.

Okay, did you build a directory of folks (buyers) or franchises (sellers)?


In this case tho, its hard for me to see why searching the web for a machine or part is something the customer is going to pay you to do.

You're exactly right! That's why I am focusing on finding buyers.

Individuals or businesses who are selling a machine or part don't have time to find buyers.

That's why they invest in advertising. But all forms of advertising have a limited efficiency, and I believe I can offer my main value by bridging that gap :)


To me, it should be very easy to explain what you want to do... The big picture of what you offer should be evident to a customer within a very simplistic description. If you find yourself having to rationalize why your role exists... Its hard to sell.

Your last sentence is really powerful, Michael. So, here is my simplistic description/mission statement of what I plan to offer my customers (sellers):

"I will bring you qualified buyers who want the equipment that you're selling. If you don't sell it, you don't pay me."

Does that clear things up for you? I'm open to any and all comments anybody would like to offer here, because I'm the first to admit that I will never know everything, and that I need advice and perspective :)

[KristineS]

So basically you're operating as a seller's agent in a sense, helping them find qualified buyers that can actually afford what they have to sell, and taking the work of qualifying the buyers off their hands and putting it in yours. From where I sit, I would think that would be a great selling point, you're not just bringing random buyers, you're bringing qualified buyers who have the funding and resources to be able to purchase the equipment available. Which, of course, then leads to the question, how do you determine who is a qualified buyer and who isn't. My guess, and this is just a guess, is that people who would use your service would use it to try to shorten the sales time. In other words, they'd turn to you because you would have access to buyers who needed what they had and could afford it, which would lead to less time spent figuring out whether or not that was the case. So, I guess my question would be how do you determine who is a qualified buyer and who isn't?

[Joshcam8395]

So basically you're operating as a seller's agent in a sense, helping them find qualified buyers that can actually afford what they have to sell, and taking the work of qualifying the buyers off their hands and putting it in yours. From where I sit, I would think that would be a great selling point, you're not just bringing random buyers, you're bringing qualified buyers who have the funding and resources to be able to purchase the equipment available.

Exactly, Christine!

You understand exactly what I'm describing. :D

My job would be to save sellers the work (and possible more costly expense) of qualifying buyers, and shorten the sales time.


So, I guess my question would be how do you determine who is a qualified buyer and who isn't?

That's the part I don't know for sure, yet. One technique is to limit myself to contacting and vetting businesses that buy, sell, rent and/or use heavy equipment; those types of businesses are all buyers of heavy equipment.

I'm actually considering modeling one of the businesses run by the late Jim Straw, whom I mentioned yesterday. His page is still up here:

businesslyceum.com/FF.html

It looks like his eBook is still available, and I can't find anything else like it, so even though the price is a bit steep as eBooks go...I may invest in it, because I would much rather learn from somebody else's mistakes!

Hopefully I can get some critical pointers on exactly how to qualify a buyer from that book.

Also, I got to thinking about the written agreements between myself and sellers; I may have to invest in a book on contract law too, but I hope I don't have to get that complicated.

Anyway, I'm eager to learn all I can from anybody who would like to share their experiences or perspectives on qualifying buyers :)

[David Hunter]

Interesting...

I know nothing about heavy equipment sales. Let us know how it goes!!!

[JohnF]

Yeah, you can build a business this way. Just need to find people who would have the use for an independent salesperson rather than doing it internally. I don't know enough about that industry to tell you how to do that, unfortunately.

[Joshcam8395]

Let us know how it goes!!!

I will do that, David.

Thanks for your interest :D

[Joshcam8395]

Yeah, you can build a business this way. Just need to find people who would have the use for an independent salesperson rather than doing it internally

Thanks John.

Yep; that's what business is all about--like the ad on the old cement truck said: find a need, and fill it!

[etobicoke_woj]

Josh, were you able to get anywhere on this type of business? It's definitely a good model if you can make the seller's life easier by finding qualified buyers!

[Joshcam8395]

Nope. Margins are running so thin these days, nobody who owns equipment that I've talked to is interested in this type of service.

Somebody supposedly posted this message to the board on October 3 this year: "I have some equipment for sale and if you made this business work or still have the contact for this company let me know. I would pay a fee if you can find me a buyer."

But the message and the user promptly disappeared, so I was never able to follow up with that.

Oh, well!

Thanks for asking, anyway.

[TAAccounting]

Josh,

The idea seems great and I know for a fact it's possible -- I have a few clients in the Midwest that brokers use heavy equipment. Which, I am assuming you are wanting to do.

The opportunity for it is pretty endless, but it becomes a big battle of logistics. If you can get that down -- you're golden.

Just be sure you work with an accountant who understands profit margins when you engage in the endeavor. I know a few times when I put a stop to a deal that sounded good, but were terrible arrangements (me being the accountant). In something like this, watch those pennies and dimes, they add up quick in the brokering game.

And if you need help with this, please feel free to reach out to me.

Best Regards,
Tran Nguyen
Accountant
TransActions Accounting LLC (http://www.TAAccounting.com)

[Pop Alexandra]

You should be able to find some support at RBI Heavy Equipment (https://rbi-he.com/), if you're still interested.