How EquipmentWatch Helps Contractors Make Better Equipment Decisions

Bryan Furnace (00:00):

Today we're here to talk about some valuable tools at your disposal to help you in purchasing used equipment. Or perhaps if you're a new fleet manager, maybe you might want some tools to help you determine running costs and maintenance costs of your current equipment. We're here to talk about EquipmentWatch. In full disclosure, EquipmentWatch is owned by Randall Reilly, which also owns The Dirt. But in all honesty, it doesn't really matter, because these tools are invaluable once you understand the data that's out there. But don't take my word for it. Here we're going to talk with Grant from EquipmentWatch. Well, Grant, thank you so much for being on the show this morning. I appreciate your time.

Grant Nolen (00:45):

Hey, thanks for having us. I'm a fan of the show and excited to be here.

Bryan Furnace (00:49):

So my first question is, for a lot of people outside of the equipment sales industry, which in all honesty that's how I know EquipmentWatch, could you give us a brief overview of what the platform is and what tools it offers to contractors?

Grant Nolen (01:01):

Yeah, so most contractors know us as the Rental Rate Blue Book. So the Blue Book is frequently specified for change order and force account work. So the reason for this is it benefits both the contractor and the project owner. Going into the job having an industry standard rate that you're going to charge for your change orders and force account, ultimately it avoids downtime, but the way you get there is you avoid negotiation, which avoids litigation, and ultimately it just provides a smooth process to get the job done on a quicker basis.

Bryan Furnace (01:34):

So where are you guys aggregating all of this data from? Is this like you guys watch from a very high point and make some assumptions, or is this real world data that you guys are pulling into your system?

Grant Nolen (01:45):

So this is real world data, and we get as granular with it as we can. When I think about the ecosystem that powers our data, it comes from a variety of sources. And that's dealer partners, rental partners, telematics, the US Treasury, labor of statistics, and even weather plays into the rate. So if you think about it and you're a contractor in California, you're getting a much longer construction season than Bryan Furnace in Michigan. So for that reason, when you're getting more annual use hours, your rate goes down because you're utilizing that equipment more.

Bryan Furnace (02:20):

Interesting. So both the Blue Book and the internal charge rate seem like pretty valuable tools for contractors. At a high level, like I said, as an equipment salesman, EquipmentWatch as the Blue Book side was invaluable when I'm going out and evaluating equipment and figuring out what we're going to spend for it. But I could also see the flip side of that as a contractor going in, going to buy a new skid steer or a used skid steer with some hours on it, getting a good feel. Am I getting taken or is this a pretty decent price for the hours, or is there a spectacular deal a little further over that numbers are a little lighter? It seems like there's a lot of data there for them.

Grant Nolen (02:55):

Yeah, that's absolutely right. So we're collecting 400,000 market observations in the auction, resale, and rental channels.

Bryan Furnace (03:03):

Wow.

Grant Nolen (03:03):

So that's going to give you a really good insight into what's happening in the market. When's the best time to dispose of my piece of equipment? We find that if you dispose of a piece of equipment in February, you're not going to get near as much as you will in August, and you can find different trends like that. So we're providing FMV, OLV, FLV, which is fair market value, orderly liquidation value, and a forced liquidation value. Yeah, so it helps both dealers and fleet owners that are looking to purchase.

Bryan Furnace (03:32):

So with all of this data at your disposal, what are some ways that contractors can utilize these tools to make better buying and selling decisions? And you touched on that with the seasonality, but what other insights can contractors glean from what you guys have aggregated?

Grant Nolen (05:04):

There's certainly a lot of things they can do with it. They can find out which assets are going to hold their value longer. We can map out residual values. So if you want to know, "What is this asset going to cost at the end of seven years or at the end of the lease?" We do that as well. The valuation side of it has many uses for marketplaces and fleet owners alike. And then going back to the internal charge rates portion, what we find is that there are many multi-generation, the same families own these construction companies. And we're starting to see a turnover of the older generation. We're seeing millennials, gen Z come in, and we just didn't have the same upbringing as our parents and grandparents, and there's a knowledge loss.

(05:49):

So where we're really able to help a contractor, and especially in that situation, is with our internal charge rate calculator. They can come in, look at the benchmarks that we're using in the Blue Book, and use that as a starting point, a starting point for the estimate of what it costs me to own and operate my equipment. And then from there they can start collecting their own data and get really granular with it, and ultimately they're going to be more profitable and win more bids.

Bryan Furnace (06:15):

It is interesting, because we talk so much out in the field about the generational gap and the skills gap that we're seeing, but no one really carries that over into the office side of the industry, which is the other half of it. And now it is, and I start to see how this could be a very valuable tool for, a new kid comes in, you no longer have the grandson or the son taking over the family business. You've got to hire someone who's totally green. But instead of teaching them how to put pipe in the ground, they've got to figure out what it takes to maintain your fleet. And it does seem like this will be a pretty powerful tool to get them up to speed and at least get them to where they've got a foundation under them. And like you said, being able to add in your own numbers, I could see how that would be pretty valuable to get them up to speed significantly faster.

Grant Nolen (06:59):

Absolutely. And that's a common situation, but we also come across the situation where we're trying to bridge the gap between the office and the field. Your project managers, your equipment managers, they're hands-on, they have a little bit of an idea of what it's costing, but then you go into the office, you've got your controller, your CFO, who are many times setting rates, there's a gap. And a lot of times those two departments do not communicate the way they really should, and this helps them get them on the same page.

Bryan Furnace (07:27):

Yeah. Well, let's give everyone a little sneak peek as to the data you have access to. And I'm genuinely interested as a contractor. With all of the data at your disposal, do you have any insights as to what the used equipment market is going to do here in the next six months or so? Because we're hurting as contractors trying to buy even used pieces of equipment currently,

Grant Nolen (07:46):

Our July market report tells us that equipment values have stalled on both the auction and resale market. Contractors and equipment managers are really in a holding pattern. There's all this federal money that's coming down the pipeline, but as you know, much of it has not turned into actual contracts yet. If the spending rises and those dollars become contracts, we could see a warmer market. But at this point it's really a holding pattern. My dad is in the industry as well, and he likes to call it, "Hurry up and wait."

Bryan Furnace (08:14):

Yes, 100%. We're well versed in that in this industry.

Grant Nolen (08:18):

That's right.

Bryan Furnace (08:20):

So let me ask you this. If someone's wanting to get involved with EquipmentWatch, isn't really sure where to start, how could they find some more information on the platform?

Grant Nolen (08:29):

Yeah, so the best thing to do would be go to equipmentwatch.com, call us, email us directly. We'll connect you with a rep and they'll take a deeper dive into the insights that help increase profitability.

Bryan Furnace (08:39):

And just out of curiosity, and let's say I'm the greenhorn kid in the office that's trying to figure out what fleet costs are going to be and everything, and I log into this platform and just overwhelmed with data. Do you guys have some resources available that if I'm totally lost, they can help me get my feet wet into what I'm looking at?

Grant Nolen (08:57):

Absolutely. And it's a very friendly user interface, but you will have a dedicated account manager. And then if we get really into the nitty-gritty, the technical stuff, we have engineers and data analysts that we can come in to provide support.

Bryan Furnace (09:10):

Perfect. Well, Grant, thank you so much for the information. This is a valuable tool.

(09:15):

Well, thank you again for Grant coming on the show and taking time to explore some of these tools with us. Like I said, this can put a lot of power in your pocket when you go to purchase that next used or new piece of equipment. And if you're a new fleet manager and you're trying to get your feet under you and figure out what run time costs are and how much you should budget for maintenance, there's some really valuable tools on this platform. So as always, I hope this helps you and your business to continue to grow. Thanks for watching, and we'll catch you on the next episode of The Dirt.