I just about outfitted my complete shop buying machinery through IRS. The trick is to know what you're bidding on and how much it's going to cost you to get it to your shop before you bid. Van's correct in that the best opportunities are from shops that are complete dispersals, but that's the majority of them anyway. Keith's correct in that they are usually well maintained, have to be if they're counting on them for production, but most factories also have their 'graveyard' machines as well. You can usually tell those by the pictures alone, if they look as if they're not hooked up or maybe not in a production setting.
Condition Information:
You need to talk to someone familiar with the machinery before the auction. If you call the auction agent listed for that auction, they will give you a good contact person at the company location. Foremen are the best, they usually have no 'dog in the hunt' and are pretty forthright with the condition information. Owners can be a bit trickier and sometimes you need to 'interpret' the information they're giving you. For the most part though, I experienced very few surprises after the fact.
Rigging:
If you're successful, IRS will list one or more 'pre-approved' or 'suggested' riggers that you can call for a quote. The worst situation can be when there's only one rigger, they know that they may have you at their mercy, so to speak. It also may be a bad situation when the company itself wants to do the rigging. I've had it go both ways with that, either exorbitant or not, most of the time not. In fact, I've had some guys rigging themselves that didn't even charge me or charge very little. You are not tied into their riggers and are allowed to employ others if you wish, but they must provide insurance information to IRS prior to rigging. Also, the riggers there should be able to quote lower than some guy going just to rig your machine or machines.
Knowing your total costs:
Your bid price + buyer's premium + wire transfer fee + rigging + shipping + possibly sales tax + possibly rigging again at your shop. Determine how many of the above are going to apply to the specific auction or machine(s) you're looking at. Call a freight broker beforehand to find out how much 10' or 20' of a truck (or a whole truckload, depending) and they should be able to give you a pretty good approximation. When I was doing it a lot, it was mid 2009 to mid 2010 and stuff was going for practically nothing. There were so many HUGE furniture factories in the midwest and east coast (sadly) 'dropping like flies,' and with the economy 'in the tank' not enough interest given the glut of machines that were hitting the market. At that time, I used to double my bid price (in my own mind) and usually be fairly close to approximating my final cost, assuming full truckloads as opposed to just a portion of a truckload. But that was then and this is now and prices have crept back up, so doubling the final bid price may be too cautious. You'll be able to determine better after you get a freight estimate prior to the auction itself.
As I said, I was able to outfit almost my complete shop through IRS. They provide an unbelievable opportunity to purchase great machines at a fraction of the cost elsewhere. This is not to say that you do not need to sit back and 'bide your time.' I was a 'bottom feeder' only staying in on stuff that was 'falling through the cracks,' and I'm not sure what level prices are at now. Some of my notable buys (ones that I can remember off the top of my head): Northfield #4 table saw with a 4 roll power feeder ($400 hammer price), SCMI Track Fed Pin Router ($200), Diehl Straight Line Rip Saw ($800), Sandingmaster 36" 3 head Wide Belt Sander which included approximately 80-100 new, unused belts ($1500), Newman Whitney 26" Planer with their Whitney 'Quiet' Head ($1100), Tannewitz 36" bandsaw ($700), and a Northfield 28" bandsaw ($800). Those are the ones that I can remember, the others I can't but they were all really, really good deals.
One machine that I was the underbidder on, that I kick myself, to this day over, was a 56" 3 head Italian Wide Belt Sander. It was less than 4 years old, cost $275k new, and went for $9200. Coincidentally, I ended up talking to the 'winning bidder' after the auction on another matter, he didn't know that I was the underbidder, and he told me that the $9200 was their absolute final bid. Broke my heart. To this day. Kick self, kick self, kick self.
If you decide to do it, remember to bide your time (there's ALWAYS going to be another machine down the road), be prepared by informing yourself beforehand as to conditions and costs, set your absolute limit and then stick by it (unless it's a 56" Italian Wide Belt Sander, then go above your limit, you stupid jackass), and then, have some fun.
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Originally Posted by Matt McColley
