GovPlanet EU: surplus military equipment market sets up shop online
Buying anything second-hand always carries an element of uncertainty, even when you can inspect it directly for yourself. However, when your potential purchase is military surplus, the questions marks are even bigger.
“Trading over the internet really is a leap of faith,” says David Shouesmith, managing director of GovPlanet EU, a new disposals platform for military vehicles and equipment which removes the risk of online purchasing and promises both buyers and sellers get precisely what they paid for. “We guarantee the condition of the vehicle at the point of sale, so you can sit in your armchair in Ecuador and you can buy safe in the knowledge that what you're buying over in, say, Nairobi is exactly as we say it is.”
As the European arm of IronPlanet’s highly successful GovPlanet government and public agency equipment disposals service, the new platform will be using a model which has already been proving its worth in the US since its inception in 2014, and a central element of that is the comfort of its ‘IronClad Assurance’.
Like on any other online auction site, buyers can click through to preview the items on offer, but uniquely, everything here comes with a detailed inspection report and a certificate guaranteeing its condition. Potential purchasers can bid knowing that, if successful, should there be any discrepancies between the description and the equipment they actually receive, matters can be put right.
“The inspection process plus the IronClad guarantee is a very important part of our access to the global market,” Shouesmith says. “There's no one else in the market place that does that.”
Tuned to the market
While GovPlanet EU itself stands as a separate legal entity, it is not a distinct business so much as a GovPlanet brand that is specifically tuned to the European market place, and Shouesmith believes this will play a big part in giving the new venture its edge.
To do this, he says, the company will be looking to three different re-sales channels. Firstly, there is what might be called the ‘pure’ IronPlanet model, which involves regular auctions and teams working with their huge database of potential buyers. This approach suits certain kinds of equipment, with the frequency of sales being largely volume-driven. Secondly, the daily market place is more appropriate for more specialised, and often higher value, items, while thirdly, there is the direct sales route, drawing on the expertise of staff who know the business well enough to be able to work the phones and make the pitch, to find the right market, buyer and price.
Expertise and acquisition
Soft-launching in June, when Shouesmith came onboard full time, GovPlanet EU bid on, and subsequently won, its first contract, ahead of the official launch at DVD2016 in September. In addition to pursuing government contracts, notably including the recently opened MoD disposals tender, the company is also in the process of making an acquisition, which will further bolster in-house expertise in the UK/EU market-place.
“We expect to have it signed and sealed this side of Christmas, which will give us a number of current contracts, and provide the nucleus of an expert team, from which we will grow,” Shouesmith says without going into further detail.
Adding value through full service
GovPlanet makes a point of getting to know every single vehicle or piece of equipment passing through its hands – from armoured personnel carriers to generators. It means that no unusual specifications, special features or modifications get missed, but it also allows for faults which are fixable to be identified up-front, and put right. For the relatively small investment involved in changing a broken fuel pump, fixing the brakes or even replacing an engine, a non-runner can become a runner, and gain considerable added value.
The whole inspection process costs money, of course, so the higher the item’s intrinsic worth and the better the end price realised, the more viable the whole process is, and the better the GovPlanet model works. As Shouesmith explains, “having the expertise and the capability to do that is an important part of this whole mix.”
With the range of types and numbers of vehicles and other materiel potentially on offer being so variable, there is little room for one size-fits-all thinking, which makes specialist market knowledge – and a flexible approach – absolutely essential.
The business can involve anything from selling Scimitars and CVRTs in ones and twos to individual enthusiasts, or providing large engineering contractors with re-liveried trucks and earth-movers, all the way up to helping in large volume government-to-government deals. As a result, Shouesmith says there is no precise template for buyers, not least because the cadence of the MoD disposals vary from major outpourings to mere trickles.
In addition, for some of the equipment, export restriction may be in force, US ITAR regulations may apply and some countries may require their own import licences on top, all of which inevitably adds another layer of complication. There is also the less formal, but equally important, need to ensure that surplus equipment legitimately disposed of does not turn up some time later being used in some headline-grabbing terrorist outrage or human rights’ abuse, dragging both the company’s name, and the relevant Government’s, through the mud.
However, GovPlanet has plenty of experience working with the US Department of Defence, and Shouesmith himself is a former Major-General in the British Army and was MoD Assistant Chief of Defence Staff for Logistic Operations from 2006 to 2010. The sensitivities of military exports are something they understand.
So where does Shouesmith see GovPlanet EU being in a year’s time?
He feels that the company has much to do and multiple goals to achieve. “I hope we will have won that MoD contract. We think we've got a really good proposition, so that’s a key target for us.”
By then the hinted-at acquisition will also have been completed and integrated into GovPlanet's operation, bringing a number of existing contracts to run and helping the company target a range of further ones from both the government and private sectors. Beyond that, although the focus at the moment is on the UK, Shouesmith sees the wider European market – where a significant amount of the IronPlanet commercial business is already done – as definitely in his sights for the future.
“We’re not naive or hubristic enough to suggest that what we do out of the US, or out of the UK you can translate directly into France, Germany, Italy, Spain or wherever. We will pick our targets carefully, and make sure that our approach to those markets suit each of those individual markets,” he says.