No Warranty: As-is, Where-is. Auction conditions with Gregg Epstein from Perry Videx - YouTube

I'd like to introduce Gregg Epstein from Perry  Videx LLC. Uou shared with me a document that  

your company put out called "the 8 Myths of Used  Process Equipment," and myth number one states  

that there's no guarantee that used equipment will  work. In Blackbird's world, in the auction world,  

we sell everything as-is where-is, that's what  we have inspection for. However, there's almost  

an implied sense when a piece of equipment is in  line, and it was in a factory, and it was working,  

and the plumbing's connected to it, and they were  making widgets when the plant closed... there's a  

certain amount of faith that buyers put in that  knowledge when they buy at an auction sale, and  

clearly if we know that the piece of equipment  was not functioning properly or needed a new  

spindle or it was broken or needs a new control  panel, we'll disclose that. Sometimes we don't  

know. Sometimes we're handed the keys and  literally have no one left in the company that's  

being liquidated to help us answer those kinds  of questions. So, your company and our company  

we partner transactions together we lean on Perry  as an expert to give us guidance for appraisals  

sometimes, and sometimes you're buyers at our  auctions, so you buy something as-is there's no  

guarantee that used equipment will work. And it's  different from your perspective as an equipment  

dealer, so tell us what happens when you buy  something in my auction, what do you do with it?  

What happens behind the curtains? So, you're  right and I may be a little different than a  

typical buyer, because we have the ability if  something's not working to fix it ourselves,  

but and that almost never happens, when you talk  about the sense that the equipment was in line,  

and working when the plant shut down that the  equipment's going to work for us for me as a  

buyer. And for us as a machinery dealer, we have  the added protection though that if there is an  

issue or even if there's not an issue, even if  we just want to recondition the piece, and clean  

it up and test run it, we have that ability so our  world is a little different than the auction world  

in that our implied warranty and sometimes a  customer will buy an explicit warranty from us,  

when they buy equipment that's non-auction world  from a dealer, in the sense is that we're going  

to stand behind everything that we sell. My  experience with auctioneers, the credible  

auctioneers, that if there's a problem that  no one anticipated, it's in the auctioneers  

also best interest to try and get it resolved.  There are several ways to mitigate the risk,  

one of the ways is to inspect the  equipment before an auction sale,  

another way is to have, if there are really  critical tolerances on a piece of equipment,  

to hire a testing service prior to the auction  sale, have them go in, to the extent that they  

have access to the equipment. Remember no one's  warranty is that this piece of equipment will do  

what you want it to do in your process, okay? That  which is implied is that this piece of equipment  

will work mechanically. [Right.] Not that  your reaction will take place in this reactor,  

that's up to you and your chemists. [Exactly,  right, and I think they call that merchantability,  

for a particular purpose within the warranty  world, and you know all the king's horses can  

can help put Humpty Dumpty back together, but  if Humpty Dumpty is really broken, and if what  

they're trying to accomplish can't work, then  it has nothing to do with the equipment.] Right.  

[Okay.] That's really on the buyer to be educated  in that respect. What's a little different for  

us is that we have more flexibility as a dealer  perhaps than an auctioneer would in terms of being  

able to take a piece back because somebody made a  mistake, and either give an equipment credit, or  

it's a good enough customer just giving  his money back because he'll come back. In  

blackbird's world we deal in a very compressed  timeline, we need we need to get in get out,  

clear the floor move this stuff out, because our  objective is different, and in the dealer world,  

you do have the benefit of more time to take the  time to recondition or clean, or make adjustments,  

or put a different sweep blade on the  bottom of that piece that you're selling,  

to meet the customer's needs. But in an auction  sale it's as-is where-is and it's just the way  

it's sitting on the floor. So to the extent that  your myths state that there's no guarantee that  

used equipment will work, is it serviceable  in the event that the mixer motor is frozen,  

are these things serviceable to people that  buy them at auctions? Can you help with those?  

Yeah. Absolutely, they're serviceable. If a piece  of equipment is in such disrepair that it's not  

serviceable, that's going to be pretty obvious,  which is why either inspection by photograph  

at the bare minimum, or if possible inspection  person for an auction scenario is so important,  

because you can pretty much see what most of  the time the problem is. Again our world is  

different in that we have the flexibility to  take it back where the auction works not but,  

they've had very very remarkably few situations,  especially in the auctions I've been involved  

with, where we've had an issue with a client  claiming that "hey, I didn't know this wasn't  

going to work," but you have more experience  than I do in that respect, Dave, but I've had  

very little pushback like that over the years for  us. So the disclaimer "buyer beware" and "as-is,  

where-is" are important disclaimers in the  auctioneers world, and when a dealer purchases  

something from us, and has the opportunity  to go over it, you can offer that equipment  

with some kind of a warranty or guarantee after  the fact, and there's consideration for that.  

And depending on the equipment obviously depends  on what that kind of markup is going to be,  

but the overreaching message I think that we're  getting to here is that people that are looking to  

buy a piece of used equipment are generally in the  industry within the equipment space that they're  

looking, and it will be evident from an inspection  if things have been properly maintained. It will  

be evident from the the condition of the rest of  the facility how that particular place ran their  

operation. So you can give a little bit of leeway  and have some comfort in knowing that as a buyer,  

trust in what you see, ask really important, you  know, ask really learned questions, and from an  

auctioneer's perspective the last thing I'd like  to leave is that, take advantage of the inspection  

period and go in look at these things and if it's  a complicated purchase, to your comment, please  

get an expert in there to look at the equipment  before you make a purchase. Yes so I think all  

of the above is how you can buy confidently  in an auction sale. My friend, Gregg Epstein,  

President CEO, Perry Videx, thanks for your time  today. Great, thanks Dave. Thanks for having me.