David is joined by Otto Cuyler to discuss how to buy food processing equipment at auction.
About this segment of Blackbird TV
Recorded: September 21, 2020
Published: June 29, 2021
My friend Otto Cuyler from Cuyler Food Pro joining us to talk about food processing equipment, and I’m curious, if I’ve never, ever been to an auction sale and I need to buy a piece of equipment. What do I look out for as a buyer? What’s really important for me to understand before I write the check. There’s a there’s a lot there. I think you and I each attended our first auction, and there’s a lot to know and there’s a lot to be learned. I think that there’s a level of a minimum level of sophistication, quite frankly, required at auctions, particularly when you’re talking about equipment that is sophisticated in its nature, whatever industry that is. The first thing is you have to be able to evaluate the asset properly and you need to do a personal inspection. That’s number one. And you have to do a personal inspection from the perspective that you better know what you’re looking at. No different than a car, it could look beautiful. And the transmission might work. But do you really know? So, the reputation, the credibility of the company that’s managing the sale really is important here, but in a Blackbird sale, we encourage you to go and inspect the equipment. It’s so important. Do you think that it’s more important to go and inspect a filling line than it is to inspect a Bridgeport lathe? I can’t really speak to machine tools because I’m just not an expert in those. But, you know, they being mechanical in nature, I think that you need to look at it unless you’re buying it super cheap or your intention is to only pay a thousand dollars for that Bridgeport. You can’t really go wrong. It depends. If it’s worth three thousand dollars or something, you got two thousand dollars to put into it. And the same thing applies to food machinery. I mean, I’m a machinery guy, so I’m always going to start with the equipment and work my way up into the transaction part of it. From the top down, I think going to a sale and looking at who’s running the sale, it’s a big deal. It has been to me as a professional buyer at auctions over a long time. I would say that it’s really shaken out at this point to where you have a handful, arguably two handfuls of people that have been around a long time. People know them, they know what they’re doing, and they’ve really perfected their work. And they’ll work with customers in, you know, in a real customer service way. And that wasn’t always the case. So that stated, let’s just assume that you’re working with a good national auctioneer like a Blackbird that will welcome you to the sale number one on a personal basis. Still have staff there. They can say welcome to the sale. What are you looking at? What can I show you? And then so there is the personal inspection part. Get them in front of the equipment. And that’s really helpful to me, because now we’ve established a relationship, because that same person is likely the one that’s going to translate your bids to the auctioneer. It’s a very stressful time for a lot of people, especially that don’t buy very often to go to an auction. It’s like they’re very nervous. So a lot of adrenaline. They don’t want to choke. And it’s the auctioneer’s job, of course, to get the highest possible bid. For me, someone going to an auction, evaluate the equipment, figure out what you want to pay, because you’ve determined, like anything else, what you feel you may have to put into it for it to suit your needs. And you stick with that number and you work with the auctioneer. Whether you give him a proxy bid either online or in person, or you bid at yourself online, which I prefer to do, and then once you’ve established that relationship, I feel more comfortable with the auctioneer because he’s not a stranger to me and vice versa. He knows that I’m a serious buyer and he’ll pay attention to me and I will miss something or I won’t be overlooked for a bid when it comes down to a challenging transaction where you’ve got two or three bidders, that’s when you have to really be paying attention. I’m sorry, dialing this back to my original question, if I’m a newbie and I need to go buy something at an auction and we were going to stay in the food processing space because that’s your space, your suggestion would be if you’ve never, ever been to an auction sale before. Pick up the phone or walk in for an inspection and develop a relationship so that you have a rapport with the people that are managing that sale and you measure value in that. That’s a fantastic perspective. I do. And I think, you know, the Blackbird sales that I’ve been at and others where I feel most comfortable is when you walk in the door, there’s still some, you know, at least for me, and there’s always some anticipation and excitement, anxiety, whatever you call it, and you go in there, you don’t really know what to do. Every situation is different. I want to have good signage. I want to know right where to go to sign up. If they need a credit card, a deposit check, you give it to them. I’m talking about an onsite auction, which is more rare these days. Right. I want to be greeted by somebody that can direct me to lot number one or a lot number, whatever it is. Right. Is your catalog. There’s you go and have a runner to take you out in the plant, if that’s what’s necessary. That makes me feel really, really comfortable. And to me, it will translate at the end of the day to higher, higher bidding, because people feel comfortable when they don’t feel comfortable. I think they tend to clamp up a little bit and not quite spend as much the onsite work that you guys do in your industry as important customer service, make them feel comfortable, not do you have to have 10 people there and hold their hand or get them in a golf cart or anything like that. Meet and greet, show ’em the way, good signage. And then they can look at it and then they can come back and either bid online or bid in a ballroom style environment. Fabulous, fabulous perspective. And I appreciate that. Otto Cuyler, my friend Cuyler Food Pro. Thanks for joining us today. My pleasure, David. Thanks.