There is now widespread recognition in boardrooms and investment companies worldwide that environmental sustainability is aligned with business sustainability. Auctions in the broadcast industry have always been a great way for users to get a significant discount on the price of new and used equipment, or to generate income from assets they no longer need, but now the environmental benefits of enabling the reuse of these assets as part of the circular economy are becoming clearer for equipment distributors and manufacturers alike. The ability to measure this impact and report on the carbon avoided is a way that both buyers and sellers can celebrate their positive contribution.
The Focus on Sustainability
Investors are raising the priority of ESG (Environmental, Social and Governance), and there are multiple examples (Boohoo and Exxon to name but two) where the impact of this has been felt in the boardroom. The view is perhaps best summed up by the words of investment group Engine No.1 (not a green fund itself), "We strongly believe that climate risk is business risk". For suppliers bidding for government contracts in the UK, as of September 2021 they must have a commitment to net zero carbon emissions by 2050 in order to be considered for new contracts. So the requirements for sustainability are not some distant future requirement, they are very much in the present.
There are many different ways that businesses can work towards achieving net zero, but one of the oldest sales methods in the world, the auction, has a compelling set of reasons to incorporate in your business model.
Traditional benefits of auctions
The idea of selling your surplus broadcast assets isn't a new one - we have been helping our clients do this for years. The two traditional benefits of selling your surplus assets are :
Generating revenue from the sale of idle equipment or surplus stock
Reducing the costs associated with those idle assets (costs to store, maintain and insure).
For a seller, one of the key factors of an auction is that they are a date-certain, time-specific method of closing a sale for the best value in a competitive buying market. Manufacturers, distributors, resellers, and broadcasters can have a large stock of surplus items; this is a method of working through that stock quickly rather than having to wait for buyers to approach you as they would in a 'store' or e-commerce model. Our average auction, for instance, has between 300 and 600 lots (and some lots will contain multiple items), with >90% sell through rate.
As a buyer, you are facing longer lead times in the face of a rapidly changing technological landscape and client demands. While auctions are not generally a suitable procurement route when you have very specific requirements, if you can be flexible, you can find equipment that in many cases would require several months to source. Also, there is no protracted negotiation process. The winning bid is the final price. Invoices are issued within hours of the auction closing, and often once payment is received the item can be collected as little as 24 hours after the auction closes.
The environmental benefits of auctions
For the environment and society, there are now multiple benefits being recognised. Firstly, by buying used over new, or enabling your surplus assets to be bought, you are avoiding the raw materials needed to produce a new item. Equipment from an auction often goes to developing countries (recent high-profile auctions had buyers from 51 countries participating), and can enable the creation of entire industries in these countries that otherwise could not have afforded the equipment new. There is also a measurable carbon impact avoided, and we can produce figures from an auction that can be incorporated within annual ESG reports.
In addition, we have found that buyers can take ingenious approaches to the reuse of assets. It doesn't always have to be a valuable item to be sold at auction, and waste items can even be incorporated into a sale and/or donated to charities. During one auction in early 2022, an enterprising buyer even took the chemical toilet!
We're proud to announce that we're also introducing a carbon measurement on the site, showing the positive impact of buying used in terms of the carbon avoided from a new purchase.
Reducing costs, creating revenue and having a positive impact on the environment, all without spending money up front, makes auctioning your surplus assets an attractive opportunity. Even before the additional benefits of circulating products and materials were added to these factors, for many companies this was already a highly profitable and strategic activity. Data from asset resale can also be fed back to procurement, ensuring that information on end-of-life value is incorporated into Total Cost of Ownership (TCO) analysis. It can be used by accounting, ensuring that asset depreciation is realistic. It can also allow you to ensure that you keep abreast of current technology, if you know that you have a route to market for assets after several years of use.
It has also proven to be a popular, low risk method of raising funds, quickly and easily contributing to investment in more current and future technologies.
KitPlus Auctions is a partnership between KitPlus, established in 2005, a global online marketplace for advertising new and used equipment for sale in the Broadcast, Film and Video industries, and CA Global Partners, an auction company established in 1997 with worldwide experience in selling surplus broadcast equipment and assets from company closures.
CA Global Partners is also part of the Ellen MacArthur Foundation community, a charity working with business, government and academia to accelerate the transition to a circular economy.