How to Navigate the Ins & Outs of Shopping an Auction

Auctions can offer some great deals if you know what you're doing, but don't get caught in the trap of buying something simply because it's cheap.
March 1, 2009

Like a new automobile, a $100,000 automatic press that has been used by a screen printer for any length of time has lost considerable value. This means great potential deals at an auction. This photo is courtesy of Mind's Eye Graphics, Decatur, Ind.

By Greg Kitson, Contributing Writer

The ongoing recession seems to have practically everyone refocused on frugality, doggedly searching for ways to get the best deals on anything and everything they purchase. Screen printers are no different, seeking bargain-bin pricing on top-notch equipment and supplies. And what's one of the best places for dollar-conscious decorators to find these killer deals? An auction.

Auctions usually occur when another screen printer goes out of business, for whatever reason — whether it's due to falling sales or an owner who's simply finished working in this industry. In any case, auctions offer incredible deals, especially when you understand what's for sale.

The Infrequent Auction
One of the biggest challenges regarding auctions in the decorated apparel industry is that auctioneers don't necessarily know how to run them smoothly — and that's because they happen so rarely. In fact, there are probably only one or two major equipment auctions each year in the United States, around six smaller ones, and probably 100 or so tiny ones that aren't even worth attending.

Because major auctions are so rare in this industry, auctioneers aren't sure how to value the equipment and supplies they're auctioning, and they're not sure how to promote the events either. However, if you're fortunate enough to learn about the auction, whether through direct invitation or through scuttlebutt, you're in for a great opportunity: You can buy items for literally pennies on the dollar.

Auction houses often rent member lists from industry associations and subscriber lists from trade publications, which means that if you're a member or reader, you may be notified of the event. You also may hear about them through sales representatives from equipment companies. Just be sure to let your reps know that you're in the market for used equipment, and if they hear about an auction, they can pass the word to you. If you buy a press at an auction that a rep told you about, consider offering him a finder's fee since he has lost out on a large commission he would have earned if you had bought a new press from him.

In some ways, purchasing equipment at an auction is like buying a used car vs. a new one. As soon as you drive a new car away from the dealership, the vehicle immediately depreciates a lot; likewise, a $100,000 automatic press that has been used by a screen printer for any length of time has lost considerable value.

That's not to say it's not worth buying; it's just that the original purchaser absorbed the steep initial depreciation. As long as you understand the equipment you're buying and inspect it carefully, you can get a great bargain. Among a small crowd attending an auction, perhaps only six people really understand the value of the equipment — and the auctioneer usually is not among the six. The downside is that one or more of those six others might bid aggressively on an item you had on your list.

The Press in Action
You should fully understand exactly what you're buying before you place a single bid on a large item like a press. Either you or someone you bring with you should be able to assess its mechanical condition. Test the machine. Turn it on, let it run, put your hand on the heads and feel it vibrate. See if you can spot any warning signs of abuse. If you're unable to test the equipment — because there's no electricity to it, for instance — you probably shouldn't bid on it unless you want it only for spare parts.

If you're bidding on an automatic press, you will want to see it run a job, given how much you're likely to spend. Spend several hours determining the machine's condition. If you don't have the expertise to do that, it's worth investing several hundred dollars to pay a press technician or installer to join you at the auction. Also, if you win the auction, the technician or installer can help you tear the machine down, crate it up, put it on a truck, and reassemble it at your shop.

Prepare to spend around $1,000 for crating a press, by the way. It's money well spent, because without proper crating, the machine may torque and bend, throwing the press out of registration.

If you don't bring along a press technician or installer, you're not completely out of luck. Often there are people known as riggers hanging around at auctions who will offer to help crate and deliver equipment you purchase. Riggers can be quite handy, as it doesn't do you any good to purchase a $100,000 press for $12,000 if you can't get the equipment safely out of the building and back to your shop.

That said, you also may need to hire a trucker with a forklift, which may cost $300 to $500 or more, depending how long you need him. Another issue to clarify is whether or not you need a licensed plumber or electrician to properly and safely disconnect equipment. This will depend on local building and zoning codes, but at all times make sure you remain safe.

You should understand the requirements of the press you're bidding on, just as you would if you were purchasing a new one. For instance, you'll need to know its footprint and its electrical requirements. A bargain isn't a bargain if the press requires three-phase power and you're in a commercial strip center that has only single-phase power.

Also, ask for maintenance logs on the press. Get the equipment's serial number and model number, and call the manufacturer's service department to see what kind of work has been done on it. This may seem like a lot of work, but you're looking at spending tens of thousands of dollars, so it's hardly a waste of time. And again, saving $30,000 on a press doesn't mean much if you don't truly know what you're buying.

Other Available Items
Of course, auctions aren't just about the automatic press itself. You can often find accompanying hydraulic cylinders, servos, proximity switches and other items worth anywhere from a few hundred to several thousand dollars. Sometimes parts like these are stuffed into a single crate or onto a pallet that sells for an incredibly low price. Of course, you only want these parts if they fit a press you own or have just bought.

You also may be able to get bargains on squeegees, floodbars and pallets that fit the press you're buying. For instance, you might be able to get a full set of pallets for an automatic for only a few hundred dollars. Air compressor equipment may be available for a song, though many times the air system is part of the building and not for sale.

The auctioneers also may have thousands of quarts and gallons of custom mixed inks that often don't sell. They're a hassle to store and transport, so unless you're getting a great deal — or unless the containers are unopened, not custom — you may want to just pass on the ink.

Screens are a different story. You may find $100 to $150 screens selling for $10, which is a tremendous value. You also may find bolts of mesh at bargain-bin prices.

Washout sinks and power washers can be found at auctions, although you'll probably need to do some reverse plumbing to remove them. If you're in the market for this type of item, bring along coveralls, gloves and tarps, and prepare to get dirty. You probably won't mind a little dirt, however, given that you might find a $2,000 stainless backlit sink for $100. At that price, who cares if it's encrusted in emulsion? You can clean it up.

And don't forget the re-claim chemistry sitting there in drums or 5 gal. containers. You can pick that up for little or no money if the building owner doesn't know about screen printing chemistry. They may be happy to have someone who's willing to take away what they perceive as a "hazardous material" headache.

You also may find used computers, monitors, hard drives and so on. Software is rarely available, unless there's unopened, retail versions. If you purchase a computer that has, say, Adobe Photoshop installed, that doesn't mean you own that application. In fact, most times the original purchaser of that software didn't have the right to resell it.

Anyone who has installed new software on a computer is familiar with clicking through a screen that contains a long, legal text document and a dialog box that tells you "Click here if you agree to the terms of use." Well, that long text document that hardly anyone actually reads is called a EULA (end-user license agreement). And for most commercial software, the EULA grants a non-transferable license to the original purchaser of the software. So, even if the software is installed on the hard drive of the computer you bought – and even if you also have the original owner's registration key – you should know that you don't own a legal license to use that particular software application.

Caveat Emptor
While there are often plenty of deals to be found at auctions, that's not always the case. Some auctions simply don't have that much good stuff for sale — and other times, you may think you're getting a great deal only to learn later that you made a bad purchase. I once bought $1,500 worth of roller frames without touching them, only to find out afterwards that they were the wrong size for our shop's equipment. I wasted money because I wasn't paying close attention.

Assume that anything sold auction is sold "as is," meaning you're purchasing it and accepting it in its current condition — no refunds, no returns. So you must insist that you see the equipment working before making a bid — or be willing to accept that you may be purchasing broken equipment that's only good for spare parts.

You also can make sure you're up to speed on the auction's equipment by asking in advance for a sale bill. You can go online prior to the event and see the equipment's serial numbers, and then spend some time looking at what similar equipment sells for used. You may even be able to find out what attendees at prior auctions paid for similar equipment, giving you a good idea of fair market value.

Another good idea for auction preparation: Make a list in advance of the items you're interested in purchasing. Your notes should say what you want and what you're willing to pay for it. This way, you're less likely to get caught up in the heat of the moment and make an unwise purchase.

Remember, the auctioneer's job is to create a sense of urgency and get the crowd into such a state that they're paying more for the items. Your job is just the opposite: Come prepared, know what you want, and spend only what you intend to spend. This way, you're sure to get the most out of the auction and walk away with killer deals on equipment and suppliers for your business.

Greg Kitson is founder and president of Mind's Eye Graphics in Decatur, Ind. For more information or to ask a question, contact Greg at greg@mindseyeg.com or visit mindseyeg.com.

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