Mid-sized Companies as Driving Force of digitalization

In the last 20 years in Europe digitalization of the used machinery market has been driven specially by medium-sized companies. Since its foundation in 1999, the online auction house surplex has been significantly involved in the digital development of the market in Germany and Europe, especially in the wood and metal sector.  In later years the used machinery market received a further boost from start-ups such as the meta search engine TradeMachines or online classified ads markets like Machinio.

Digitalization promotes the international communication between sellers and buyers

Trade has always had a a highly individual and national character, especially when it comes to used machinery market. Sellers and buyers rely on their long-standing contacts.  Most of them come from the same or one of the neighboring countries as the dealers. However, as a result of digitalization, the market has become highly international.

“It is quite common for us to sell a machining centre from a German furniture factory to India or Ukraine,” says Ulrich Stalter, commenting on the trend. “In addition, African countries are more likely to request conventional machines because of the frequent power outages and fluctuations. No computer-operated machine could survive something like that today”, adds Stalter. Together with Michael Werker, he is the owner and managing director of surplex.

Digitalization leads to more transparency, especially in terms of price

Before the Internet, the used machinery market was lacking in transparency. Not having a real market awareness, sellers didn’t exactly know how much their machine was worth and how many of the same type were available on the market. Buyers shared the same difficulty, since they couldn’t determine the comparative value. In addition, the search for the right machine was very time-consuming. Transparent pricing of available used machines through online auctions is particularly noteworthy.  This was, in fact, the most important leverage for the growth of online used machinery trade.

“Our revenue has increased continuously in recent years. We recorded a significant growth reaching 84 million euros in the fiscal year 2017 compared with 64 million euros in the previous year. Over the past 10 years we have also increased tenfold the number of our employees.  We are now about 180 employees at 10 locations in Europe,” Michael Werker from surplex comments on the growth in recent years.

The used machinery market worldwide: a volume of 380 billion euro

The global used machinery market can’t be analyzed very accurately yet. The reason is that there are many different sellers. Used machines are offered by manufacturers, industry, insolvency administrators and dealers, to name but a few. surplex currently assumes a worldwide trading volume of around 380 billion euros*. However, the market is growing:  the increased transparency reduces the duration of the investment planning and improves the sale of the warehouse inventory. Machines change owners more frequently while the scrapping decreases. Many machine owners are only now realizing how many valuable products were left to “gather dust”.

The used machinery market is on the move: mergers and investors

The market is currently on the move, as the recent mergers and investments show. While surplex increases its stake in TradeMachines, the Auctio Group recently announced the merger with mid-sized Troostwijk. The online dealer Gindumac, on the other hand, has found a major investor in Krauss Maffei, a machine and plant manufacturer.

*Based on the market analyses of market participants listed on the stock exchange (Ritchie and Liquidity Services) and the availability visible on used machinery search engines such as TradeMachines.

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