Taking advantage of the US/CAD exchange rate when selling used equipment
Apr. 18 2016 - A lower Canadian dollar is often good for agriculture on both sides of the border. Grain and cattle industries are the usual beneficiaries but now the used equipment industry is getting in on the action. With our neighbours to the south having a little more buying power than what has been seen in recent years, there is a much greater opportunity for Canadian farmers to upgrade their equipment or add to their cash flow by selling their used equipment.
The asking prices for the Canadian equipment can stay relatively the same, while the stronger U.S. dollar means a bigger benefit to the American customer. They can either upgrade to a newer, more efficient machine or they can just save a little more in the purchase price due to the exchange rate. Part of the shift is farmers being more and more comfortable sourcing and selling online.
"U.S. customers are extremely pleased with getting such great prices on equipment that they need and our Canadian customers are equally happy to move their equipment more quickly," says Kirk Frankish, one of the founders of EquipLinx. "It's really great to see farmers on both sides of the border having more dollars in their pockets because they are either buying or selling used equipment."
By opening up options to include the larger U.S. market, a seller can reach buyers looking for equipment sooner. In March of this year, EquipLinx had 70 per cent of its views from the United States. Approximately 30 per cent of the company's final sales are south of the border, but with their expanding market there, they expect that to increase in the coming months.
While there are many benefits to selling across border, there are a few considerations that can make the process a lot easier. Frankish has a few tips for people interested in potentially selling their equipment to an international audience:
- Understand that there are regional differences in how equipment is used in the United States just like there are differences across Canada. Some machines will be of interest to the entire continent while some types of equipment will only see interest from a certain region.
- The season is soon in full swing, so with a busy schedule, arranging for shipment of the equipment rather than delivering or picking it up yourself will likely be part of the process. The distance between the buyer and seller will be important to consider. This should be something that needs to be considered in addition to the selling price.
- Finding your customer through a reputable network is key to managing risk. Whether you are buying or selling online it can create doubts for both parties. Buying or selling through a system that has safeguards in place can take additional stress out of the equation. This helps with making sure that payments are done in a timely fashion and that equipment is released as per the contract.
- Although not common, customs can delay the arrival of the equipment at its destination. Make sure to give yourself or your buyer enough of a window to account for any normal delays.
- If you're working through a broker, have a good understanding of what their fees are. Make sure that there will be still making enough of a profit once any commissions are finalized.
While it may not be a solution for everyone, selling equipment into the United States is a new option that changing technology has afforded the industry. For those wanting to take advantage of the right opportunity at the right time it may be a perfect moment to try something new.