Permian International Auctions sells equipment for the global oil and gas, construction, manufacturing industries. Their items on sale at each auction are diverse and plentiful with a detailed video description for each. They make the job easy for the global buyer and bring in the deals for their sellers. Their next online auction is on July 19 and 20 and is poised to be a bigger success than their last.
Multiple factors have systematically led to a bump in online auctions for the heavy equipment industry globally. Beginning with the pandemic, the wheels turned, and we witnessed – restrictions on direct contact meaning lives and businesses moved online, that followed widespread, temporary shutdowns of original equipment manufacturers’ operations in order to keep employees safe; and simultaneously global supply chains became slower. All of these meant that whatever equipment was available in good condition was available on reputed global online auction sites. Permian International is one of those handful, well-known auctioneers. And strike the iron while it was hot, they did.
In 2014, the founding partners of Permian International Auctions – Steve Taylor and Eric Dyess had been in the oilfield auction business for more than two decades. And they were good at their job as with their expertise they managed to sell 90 percent of the oilfield equipment brought to any auction during that time. Between 2014 and 2017, a series of mergers and buyouts opened new doors for Taylor and Dyess allowing them to continue their extensive careers in the oilfield auction and equipment marketing business but this time under their own leadership and with a new name, Permian International Auctions.
Permian International Auctions hosted its first sale in October 2018. A total of 1,079 lots of oilfield and construction equipment were sold bringing over $8 million in gross auction proceeds. This auction took place in Rock Spring, Wyoming, with over 600 bidders from 41 US States, and 11 countries worldwide thanks to internet bidding and marketing platforms such as PlantAndEquipment.com.
Inventory management
With the large amount of equipment on sale at any given auction, Permian International Auctions doesn’t spend money on physically moving the heavy oilfield equipment, cranes, and other heavy construction machinery. “Given the nature of the equipment we sell, it is neither practical nor cost effective for us or for our sellers to move it to our facility,” says Dyess.
“When you visit our website or look at one of our auctions’ catalogs you will notice that the equipment is located over several yards. We have found that it is much easier to move it with a camera via a digital image to our auction room than for us or our sellers to incur the expense of trucking it to our yard,” adds Taylor. “Take, for example, items like complete drilling rigs – it just doesn’t make sense for the seller to move that when we can market it to the world and sell it at auction and then let the new owner handle the moving and trucking. Ninety-nine percent of the equipment we sell is entrusted to us by various consignors,” continues Taylor.
As the company has grown, so has its need to update cataloging and inventory management processes. “We have been working closely over the last year and a half with Innova Technologies to customize and develop a better and less paper intense system for managing our inventory while also streamlining our processes of getting equipment uploaded to our website and listed for auction, which in turn allows us to do a better job of marketing our inventory,” says Dyess.
The sales process
From a seller’s perspective the process is straightforward. Permian International Auctions offer a ‘turnkey’ service from start to finish. Once the seller speaks with one of Permian International Auctions’ account managers and agrees to an auction date, a team member or a full team (depending on the need to start inventorying and cataloging equipment) is sent to the seller, so that Permian International Auctions can start working on a marketing campaign.
“We offer services that include cataloging and taking photos, taking videos of running equipment, light mechanical work, paint, other details and yard setup,” says Taylor. Once the auction is over, Permian International Auctions provides the seller with reports of what items were brought to the sale and what was sold. “We handle the collection process and will finish the payout to our consignors within 30 days of the auction. In most cases we pay within 15 days,” adds Dyess.
The buying processes
From a buyer’s perspective, the process is just as easy. Buyers can choose to attend the auction in person or register to bid online through Permian International Auctions’ website, www.permianint.com. Here they can also view the online catalog along with pictures and videos of the upcoming auction items.
“We encourage our buyers to inspect the equipment prior to the auction since it is being sold on a ‘As is, where is’ basis,” says Dyess. Once declared the winning bidder, the buyer will receive an invoice either in person or by email. Acceptable forms of payment include cheque, wire transfer or for smaller purchase amounts credit cards. Once Permian International Auctions receives the payment, the new owner is free to plan for pick-up. “We do not get involved in the trucking or shipping process beyond offering local recommendations. We are experts in the auction business, not trucking,” adds Taylor.
TLC
Having said that, Permian International Auctions offers a level of personal care and attention to customers that other auction companies do not provide. Auction companies usually are concerned about volumes and not the customer and their needs. “This business is about relationships,” says Dyess. “Steve takes much pride in promoting the fact that we take care of our customers from the ‘cradle to the grave’,” continues Dyess with a smile. In addition to this customer philosophy, Permian International Auctions wants to strive to stay in front of the changing dynamics facing the auction industry by seeking out new technologies and methods to stay relevant and keep their customers’ equipment in front of the world audience.
The company has established, in addition to the relationships with their customers, a valuable, strategic relationship within their niche industry with companies like Range Valuation Services. Range Valuation Service is the premier appraisal and valuation firm within the oil and gas industry as well as heavy equipment and machinery industries. “Our alliance with Range gives us access to their services and expertise which reciprocates into them having access to our marketing and liquidation expertise for their clients,” says Dyess.
Online auctions as well as live/simulcast auctions have not only changed the way used equipment sales businesses operate, but it continues to change the entire auctioneering industry. Buyers are becoming more tech savvy and are preferring to bid online over in person live auctions. The company sees 70-80 percent of bidders being online bidders. This is another reason for Permian International Auctions to work with Innova Technologies to design a unique platform for them that will allow them to compete and outperform their competition, while establishing a dominant presence on the global stage.
“We are fortunate in how successful Permian has been in four short years,” says Taylor. Short term goals for Permian are to expand their presence state side in the USA by increasing their salesforce and setting up people on the ground. Their long-term goals are the same but given that the industry is migrating to more online, sales expansion for them may mean fewer permanent physical locations and a broadening sales force in the USA and abroad.
Supply chain woes
With the tightening supply chain, the company has seen an increase across the board in overall bids in the oilfield equipment sector. The lack of new equipment and the scarcity of parts, along with oil prices at US$100/barrel, has driven supply chain costs up by 30-40 percent from where the market was just two years ago.
“For us, we never really experienced a downturn in business during the pandemic. If anything, we saw an increase in online bidders in some cases three times higher as compared to what we had previously seen. The pandemic helped to facilitate the transition to online bidding for a lot of buyers who would not have considered it prior. It has changed the auction industry,” adds Dyess.
Since the time they set up the company, primarily selling oilfield equipment, both Dyess and Taylor feel the most in demand equipment is anything that is late model, low hours, and field ready. “Many oilfield service companies resorted to cannibalizing their fleets and equipment to save money and keep operating. Now that there is an increase in oilfield activity and supply chain issues, everyone is looking for field ready equipment,” continues Taylor.
Looking ahead, Taylor and Dyess see the auction industry continuing to migrate to more online and simulcast auctions. Permian International Auctions have already reached the point where their online attendance exceeds their onsite attendance. This is an advantage because in this way, the company is able to reach markets that previously they were not able to attract. However, this scenario also brings with it its own set of challenges. Fewer buyers will travel to inspect the equipment prior to auction which means Permian International needs to be more creative and thorough during their recorded inspections and descriptions when cataloging.
If the statistics are anything to go by, Permian International is doing everything right. Their last auction saw the company make total sales of $5,780,192 of which online sales were $3,553,936. The total number of bidders were 1,123 of which 113 were from outside the USA and total catalog views were 54,596. And the only way is up from here.
