Rate this post

Click here if you are having trouble viewing this article.

The recent downturn in the Ag economy has resulted in the growing popularity of auctions.

This article examines their relationship to overall market prices.

There are different types of auctions for agricultural equipment, ranging from the time-honored distressed sale to planned inventory reduction events. There are many factors that can affect the results of an auction sale. dealers are looking for assurance that the values that auctions provide reflect market prices

Iron Solutions ® looked at their database to answer the concern.

Iron Solutions has the largest database of dealer sold and auction transactions in the North American market. Over the course of 30 years, records have over 16,000 models of equipment, totaling over $ 80 billion in retail sold reports.

Iron Solutions ‘ Director of Software Development and Data Services compared auction results with dealer reported retail sales for two popular recent model-year combines, a John Deere S680 and a Case IH 8230. He looked at sales reports from January 1, 2016 to December 1, 2016 for those two models. There were 670 transactions in the dataset.

The data from the auction transactions alone was used to build a scatter-chart. The two models listed above are included in the chart. The transactions were done at Auctiontime. Iron Solutions has an Official Guide database. The machines plotted here can have different options.

The dealer reported retail transactions. After the reported sold price has been adjusted to allow for differences from the base unit, these results reflect sales prices. Common configuration for a piece of equipment is defined as the base unit.

Auctions, 2016 for 2014 Model Year Combines

The steps that Iron Solutions goes through for every sold report submitted by a dealer are shown in this diagram.





Adjusting the price to set the baseline.

Adjusting sold pricing to set baseline

A scatter plot of those retail transactions was then created and is shown here:

Adjusted Retail Sales, 2016 for 2014 Model Year Combines

Many more retail sales transactions are available due to the fact that auctions account for only a fraction of the sales of agricultural equipment during the year.

Next, you should compare your high, low and average selling prices for equipment. The format makes it easy to see the differences between the two data sets.

You can find sales when you compare retail and auction results. The average dealer retail price for the Case is 27 % higher than the average auction price. The average retail price of the combine was 25 % higher than the average auction value. The auction results for combines sold in the database ranged from $ 125,000 to $ 359,000. On a much larger volume of sales, 607 dealer retail transactions varied between $ 155,000 and $ 295,000

Auctions Results vs Iron Solutions Retail Results

Why do auction results alone give an unpredictable estimate of value? The most common reasons are:

  • comparability of the values by model is questionable because of the erratic environment of the auction.
  • Accurate option detail is not always available.
  • It is possible for condition evaluation to be subjective.
  • There is n’t enough data points for a particular make, model and year.
  • The final value assigned to a piece of equipment can be affected by the auction environment.

The best source of valuation is dealer sold reports. They represent a price between a willing buyer and a willing seller.

Each dealer retail transaction is reviewed by Iron Solutions to make sure the data points are the same. A database of dealer retail transactions assures that there are enough data points to make a reasonable conclusion about the value of the machine. Iron Solutions can give you more information about our data and the tools we provide to help customers turn trusted data into profitable decisions.

The White Paper can be downloaded here. Contact us to learn more about how Iron Solutions can help your business. li class “ gfield gfield_contains_required field_sublabel_below field_description_ ” /p >

Source: https://nhadep247.net
Category: Machine