How Ritchie Bros. Auctioneers transformed equipment auctions
In 1958, the three Ritchie brothers – Dave, Ken and John – owned and operated a furniture store in Kelowna, B.C. At the time, the store was having financial challenges, so they decided to liquidate the store’s inventory to pay off some debt. This was the brothers’ first auction.
Now, after more than 65 years since closing the furniture business, Ritchie Bros. Auctioneers has grown to become one of the largest heavy equipment auctioneers in the world, as well as a premier destination for pre-owned construction equipment.
“The brothers went through a couple of iterations auctioning off a variety of commodities until they found their niche and landed on the heavy equipment side of things,” said Jason Huber, Ritchie Bros. regional sales manager – Saskatchewan and Manitoba Industrial Division. “Ritchie Bros. recognized a need in Western Canada for someone to form a marketplace where sellers could part with equipment that they no longer needed, and buyers could acquire that equipment through a public, transparent and unreserved auction.”
“The reality is, because we are not tied to a specific brand, type or industry, nobody sells more heavy yellow iron and heavy trucks and trailers than we do at Ritchie Bros., thanks in large part to the support of SHCA members.”
– Jason Huber, Ritchie Bros. Auctioneers
In the 1980s, Ritchie Bros. went through a period of expansion, setting up shop in the United States in Texas, California and Florida. To this day, the company’s February Orlando Sale is one of the largest events of its kind in the world, seeing thousands of pieces of equipment and hundreds of millions of dollars of transactions occurring over a six-day period. Building on its success over the years, Ritchie Bros. now has operations across North America, Europe, Asia, Australia and the Middle East.
Global reach, local perspective
Despite its growth, Ritchie Bros. maintains a strong Prairie presence. The company has three major yards in Saskatchewan at Saskatoon, North Battleford and Rouleau. Ritchie Bros. employs approximately 100 people in the province.
“Because of our agricultural background, Western Canada is probably the most auction savvy market in the world,” said Huber. “There’s no question that farmers, as a rule, love auction sales. They remember their dads dragging them to sales when they were kids. They remember the smell of pies and burgers in air and the sounds of auctioneers calling out, and for many it was just a big community social event. This nostalgia for auctions continues to be strong across the Prairies, especially in Saskatchewan, which remains a very dominant market share in our auction space – rivalling anywhere else in the world.”
This global presence is what sets Ritchie Bros. apart from the competition. There are a lot of auction houses that can find homes for equipment, but their reach is generally limited to a local audience. This is not the case for Ritchie Bros., where equipment can be sold in Saskatchewan and potentially be sent anywhere in the world.
“It’s not unusual to see our sales end up in another country – we often see something like older Caterpillar equipment ending up in the Middle East,” said Huber. “It’s always a highlight when we see far away places pop up on the map whenever the bidding happens. It’s a real treat when we go back to our customers and say, ‘You know that piece of equipment that you had in your fleet that you got rid of? It’s going to Vietnam or it’s going to Mexico City, or Dubai.’ They usually get a kick to hear where it all ends up.”
Working with members
Ritchie Bros. has long been a member of the Saskatchewan Heavy Construction Association (SHCA), its members often seen at auctions bidding on equipment.
“The members of this association are, by and large, our customers and people who we go to see and visit with on a regular basis,” said Huber. “The reality is, because we are not tied to a specific brand, type or industry, nobody sells more heavy yellow iron and heavy trucks and trailers than we do at Ritchie Bros., thanks in large part to the support of SHCA members.”
Ritchie Bros. is not only a source of equipment. Because the company is not just a single dealer with a specific brand, and sells all brands, makes and sizes, Ritchie Bros. has a unique vantage to see where the market is going. As such, many of the questions Ritchie Bros. receives from SHCA members and customers revolve around how the market is doing and when the best times to buy and sell might be. Answering those questions is a team in the background of Ritchie Bros that has its finger on the pulse of emerging trends in dealer inventory or Original Equipment Manufacturer output, as well as an eye on which direction prices are heading.
This expertise was especially useful in the face of the extreme supply and demand disruption caused by the COVID-19 pandemic.
“We are still coming out of what is likely the most chaotic market that we’ve ever been a part of,” said Huber. “There was such a scarcity of equipment during COVID-19 that, no matter the condition, everything for sale brought in top dollar and the sellers were kept very happy. In recent months, however, the pendulum has swung and the companies that paid inflated prices are being hit by heavier interest rates – in some cases that results in bankruptcies and more equipment going to auction. This means we are seeing prices levelling off as the supply of yellow iron and core construction gear goes up and, while prices remain strong, it’s nowhere as crazy as it was during the pandemic.”
The evolving auction
With customers becoming accustomed to online applications like eBay, Kijiji and Facebook Marketplace, Ritchie Bros. has been watching the auction space slowly evolve for years. However, the pandemic accelerated the pace of that evolution.
Where the local auction was once a must-attend event that drew crowds, much like a travelling circus, the trend today sees people wanting to go online on their computers and smartphones to bid on equipment. Ritchie Bros. has made it simple for people to bid at RBauction.com from their homes and offices, the front seat of their trucks and even their combines, as auctions today have become more of a transactional activity as opposed to a social event.
“The auction business has certainly changed post-COVID,” said Huber. “Auctions used to be a party that we would hold multiple times a month. Now, they have people watching what’s going on from their computer screens and there’s not a lot of interacting with other human beings.”
“It’s not unusual for us to run into a second or third generation contractor that still [has] the very first grader that their dad bought to start the business, and there is an absolute emotional attachment to the past – we help them work through that and make the auction a positive experience.”
– Jason Huber, Ritchie Bros. Auctioneers
While the day of sale may be different in the business of auctioneering, there is still a very human element behind the scenes in the leadup to auction day. The real thrill for those working at Ritchie Bros. is getting to work one-on-one with the contractors who may have excess equipment or – better yet – are at a point in their career where they’re eyeing retirement. When that happens, Ritchie Bros. works with the customer to make sure they can end their careers on a proper note and, whether it’s been five years or 50 years, the auction house takes pride in giving them the public fanfare they deserve for a career well lived.
“And at the end of the day, if we’ve done our job right, the conversation post sale with the customer, more often than not, leads to tears or gratitude from the person or their spouse or their family, and sometimes a little sadness,” said Huber. “It’s not unusual for us to run into a second or third generation contractor that still [has] the very first grader that their dad bought to start the business, and there is an absolute emotional attachment to the past – we help them work through that and make the auction a positive experience.”
The road forward
Looking ahead, Ritchie Bros. aims to continue providing the same global reach and personalized service that has brought it success over the years. Part of this means continuing its strategic expansion into new areas. In 2023, Ritchie Bros. completed a significant acquisition of IAA, Inc. (IAAI), which brought the company into the salvaged car business.
“IAAI was the number two salvage car company in North America,” said Huber. “So, we now have this whole division of salvage car that opens up other opportunities for us throughout North America – and around the world – in terms of our ability to come to scale, in terms of a real estate footprint, and in terms of what we’re able to offer our customers when it comes to service levels and the ability to remarket their equipment, whether that’s an auto or a bulldozer.”