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Online Equipment Auctions Offer Savings, Risks

So you need a piece of equipment, quickly and you're on a tight budget. In the past, you might have been at the mercy of an equipment dealer or manufacturer. But today you need only open your Internet browser to look for equipment-namely any of a number of online auctions that offer buyers low cost and convenience.

How does an Internet equipment auction work? In some cases, it's similar to eBay. Current ask-and-bid prices are displayed in real time on a bidding screen, along with photos of the equipment and details about its condition.

Participants simply enter the amount they're willing to spend and place a bid. A counter shows how much time is left in the sale. No special equipment or software is needed. One example is IronPlanet.com, which holds Internet-only auctions every two weeks.

In other cases, online users virtually attend live auctions. Internet bidders use free software to see the equipment, hear the auctioneer and place bids in real time. When you activate the "Bid" button on your computer screen, you'll see the current asking price displayed for the selected item. Just clicking the button submits your bid. If your bid is the first to reach the company's servers, it will be forwarded to the auctioneer. Internet bids are displayed on monitors located at the auction site.

Naturally, Internet auctions carry a number of risks. For instance, some Web sites require you to accept certain payment terms before you place your bid. Read all of the terms and conditions of sales before you start clicking.

In addition, look into who will be picking up the tab for shipping the equipment. If yours is the winning bid and you don't understand the shipping terms, you might wind up paying thousands of dollars more than you bargained for just to get the equipment delivered.

Just as on eBay, it's all too easy to get carried away with ill-advised impulse buys. Know precisely, right down to the specifications, what you're looking for and what you're able to spend. Remember, there will always be another online auction, but there may be no getting over the regret of spending precious dollars on that "vintage" backhoe gathering rust in your parking lot.

Questions about the risks of Internet auctions? 
Contact Tom Kinder at 312-980-2904 or Ira Zorn at 312-980-2972.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.