Jeff Tanenbaum - Executive Manager Director, Tiger Commercial & Industrial

Jeff Tanenbaum – Executive Manager Director, Tiger Commercial & Industrial

By: Jeff Tannenbaum, Tiger Group

The production equipment rental space is as dynamic and competitive as ever. That means it is imperative to efficiently and methodically leverage the value of a key asset—the equipment fleet. But disposing of excess inventory can be challenging and time-consuming. While digital sales channels like eBay or production-specific marketplaces are easily accessible, they generally represent management-intensive and less effective ways to dispose of equipment than working with asset disposition professionals. From a competitive standpoint, companies should focus on what they do best—renting equipment—not on racing to recycle that equipment online before it loses its value.

Many of the top names in the business, including the likes of Sony, Keslow Camera and Otto Nemenz, have leveraged
disposition professionals for precisely this reason. Certain niche players focus specifically on selling pro-grade production equipment via global networks of regular buyers. In addition to recouping the maximum value for older equipment, these companies can also leverage their buyer networks to help clients find deals on new acquisitions. They are constantly engaged in list building and outreach campaigns to cultivate new buyers and sellers. Unlike many rental companies, disposition professionals have the time and resources to send emails and make phone calls to prospects domestically and internationally. They’re also experts in staging and marketing auction events and can feature equipment in “conglomerate auctions” with inventory from multiple sources. Some of these specialists also appraise equipment for lending purposes and/or provide the capital needed to make specific acquisitions, such as a specialty package for a key client.

For example, when Keslow Camera acquired Clairmont Camera and its Canadian operations in Vancouver and Toronto last
year, the move more than quadrupled Keslow’s anamorphic and vintage lens inventory and added a substantial range of
custom camera equipment to its portfolio. Naturally, it also led to some equipment redundancies. Selling that inventory to a third-party company helped provide significant operating capital to Keslow. The disposition company was then able to both auction the equipment on its own timetable and sell it directly to local, domestic, and international buyers on a private treaty basis.

Disposition professionals also work in creative ways to contribute to a company’s strategic efforts. For example, acquiring certain trade-in equipment from a major manufacturer at a locked-in price, supported that company’s ongoing trade-in program, which encourages customers to turn in old gear and buy newer models.

As technology has rapidly changed, the ability to recycle equipment has become important. Six to ten years ago, many
rental companies saw the writing on the wall and made the decision to divest their classic film equipment—some selling their entire fleet. They wanted an expedient market sale to reduce the size of their film-based fleet, given the risks of rapid depreciation. In many cases, those sales were done by a third-party company that offered a fee-based solution.

The march of technology stops for no one. With more widespread adoption of large-format cameras, the industry can count on corresponding changes in customer demand and legacy equipment value. As the utility of vintage PL-mount lenses diminishes, it will be too problematic and costly for cinematographers, studios and rental houses to suddenly switch their entire fleets. These lenses, in other words, will retain val…for a time. Disposition professionals with substantial industry expertise and buyer connections can help companies discern the depreciation timeline and stay ahead of its curve. These companies’ ready access to global markets is part of what makes this possible. Currently, disposition companies are selling directly into China and India at a far greater rate than in the past and are cultivating relationships with specific, routine buyers. This represents a tremendous resource for sellers.

For third-party professionals, tasks such as finding new markets and buyers, understanding price points and establishing
sale timetables to maximize results are all part of the job. This proactive, engaged and multilayered approach is far different from, say, posting equipment on a marketplace website or eBay. As PERG’s members continue to contend with tough competition and rapid change, their strategies will benefit from the suites of services available from niche dispositionprofessionals focused on the production equipment space.

This article originally appeared in PERG News: September 2018