Going IronDirect: A New Online Equipment Dealer Is Offering Huge (50%!) Savings on Machines

Today, computers are the windows to the world of retail and commerce. Music and movies are simply downloaded via iTunes. Taxi services like Uber and Lyft are easily hailed with a few swipes of your smartphone, and consumers can buy almost anything on Amazon — from books and beauty products to cars, clothing and even live lady bugs (hey, who knows when you may need some?). So, why not construction equipment?

That’s what Tim Frank and his partners at IronDirect got to thinking. Let’s create an online marketplace where we can sell construction equipment. Wait, that’s not new. Just go check out the one zillion listings on Ritchie Bros., IronPlanet or Machinery Trader. Luckily, IronDirect isn’t much like those sites and services. This web portal is actually the world’s first e-commerce machine dealer. You know that guy who sells you equipment and repair services down the road? Well, now he lives in your computer and in your smartphone (and actually, he can still be that dealer down the street if a customer wants).

“I’ve never met a contractor without a smartphone in his pocket,” said IronDirect president Tim Frank at a press event this July. “Why? Because they’re mobile.” And like that smartphone, he noted: This is high-tech stuff, but it’s not hard to use.

“All they need is a mobile device. Tech doesn’t mean, oh, I have to learn how to do this. The best use of tech is to make it so easy that, I won’t say it’s magic, but it almost feels like magic,” added Frank. “When you call an Uber car, it almost feels like magic when you connect with them on a very click, click basis. All the technology we’re introducing is meant to be just as simple as that. The only limiting factor is not the tech savviness of the person or the age of the person. The only limiting factor is having an electronic channel.”

Using this electronic channel, Frank and friends at IronDirect are promising an up to 50 percent cheaper investment from buyers on certain machine categories. Wow. What if you could cut costs by 50 percent across your entire fleet? Would you suddenly be company MVP? IronDirect is thinking you might. They want to offer an intimate, dealer experience that involves capitalizing on the entire lifecycle of the machine (buying, servicing and reselling) — just online.

“We divide our customers into two chunks — first off, key accounts [larger contractors with big fleets] — we’ll go after them in a very traditional person-to-person way,” said Frank. “On the e-commerce side, we’re going to use some of the tools that our parent company, Liquidity Services, has been using on its nine other marketplaces — social media, e-commerce marketing programs to build awareness first and then a registered user base and ultimately a growing buyer base.”

IronDirect is owned by Liquidity Services, a global solution provider in the reverse supply chain industry with the world’s largest marketplace for business surplus. As a guiding parent company, Liquidity Services has tons of experience moving products online, which bodes well for IronDirect’s success. The key will be getting folks to the site and creating the trust needed to close expensive online purchases. To entice said customers, IronDirect has some meaty incentives, including:

• • Easy online machine configuration and purchasing
• • Fixed pricing
• • Direct online parts purchase
• • Online finance, warranty, trade-in, resale and shipping
• • Virtual machine demos
• • 48-hour parts guarantee for value-priced machines
• • QR codes on every machine
• • Auto-shipped free maintenance parts

And three systems to help run all this:

• • DirectAssist, which is a virtual support anytime, anywhere app
• • Service Your Way, which offers three different ways to service a unit, including paying yourself for service work
• • DirecTrac telematics

So What’s the Catch?

Good question. To achieve these savings IronDirect is aiming to distribute, sell, service and resell construction equipment and attachments for manufacturers (and even dealers) who have a poor distribution network in America. IronDirect is focusing on quality equipment coming from foreign markets and machine makers that don’t have the wholesale distributor network of the big dogs.

Right now, the company’s brands include Chinese nameplates like Lonking and Shantui but also attachment makers such as Paladin, undercarriage leader Berco and Magni telehandlers. While its virtual equipment lot is mostly focused on larger construction equipment right now (excavators from 6 to 48 metric tons, wheel loaders from 3 to 4 cu yds and bulldozers from 80 to 520 hp), it has plans for lots more machinery including compacts.

“We’re looking at everybody, but the common denominators would be brands that have struggled or will struggle with finding traditional distribution,” said Frank, who has worked for everyone from Caterpillar to Sany.

Will There Be More American Brands?

“What is an American brand anymore? It might be an American corporation, but 80 percent of their products are built outside of this country. Or it might be a Japanese company, and 80 percent of their content is made in this country,” explained Frank. “So what truly is an American brand? I don’t know, but I would say most of the brands we’re looking at for the future will be more established and known brands rather than brand new brands from a China market and South African market. We are negotiating now with some very well-known brands that will soon be online”

While some of these initial brands might be unfamiliar, we got the opportunity to operate the excavators, dozers and wheel loaders in Asheville, N.C., and were impressed by their ruggedness and comparability to other brands. These machines don’t come with a lot of bells and whistles (no deluxe instrumentation panels or high-tech automation like grade assist yet), but they appear to work just as hard. It still begs the question: How can a buyer feel safe and satisfied buying a $100,000 piece of construction equipment on the internet — especially if it’s a brand they’ve never even heard of?

The Buying and Servicing Experience

A machine is only as good as its dealer, and IronDirect wants to be the ultimate, 24/7 dealer extraordinaire. Late night calls, overnight parts, machine loans, a global audience for resale, telematics services, IronDirect is ready to convince a customer that it can sell quality machines and keep them running more efficiently than a traditional dealer business model, regardless of the brand slapped on the side (noting all brands meet a strict inspection criteria).

Are you looking to buy one? The company offers live virtual demonstrations. Set up a time, and an IronDirect sales rep will hold an online demo, showcasing any part of the machine a buyer has interest in inspecting. The company has also set up a local, hands-on demonstration facility open to the public at its Asheville headquarters to inspect the whole gamut of IronDirect brands. In May, the company brought in 12 customers with a total fleet value of almost $10 billion to its Asheville proving grounds to test the concept.

“It was really interesting when we had the customers here,” said Kevin Tanner, IronDirect engineering manager. “We started off with a dinner, and they didn’t have any idea what we were going to show them the next day. The only thing they knew was that we were going to save them 30 to 50 percent off their equipment. They said, ‘There’s no way.’ They were very, very skeptical at dinner — it was almost uncomfortable. Then, the next day you could start seeing the light bulbs going off.”
Once customers are convinced and ready to buy a machine, equipment will be shipped from one of IronDirect’s 12 U.S. warehouses and fulfillment centers. Of course buying a machine is a lot easier than servicing a machine, which is why IronDirect has conjured up the uniquely flexible Service Your Way system. Because IronDirect is an online retailer, it wants to ensure buyers are happy with their service and machine upkeep, so the company offers three different options.

• 1. Opt for self-service: Qualifying customers can perform warranty repairs at their own facilities and get reimbursed for labor and at full MSRP for parts (pretty cool, right?).
• 2. Use your preferred local dealer: Select any pre-authorized dealer or service provider, and the company will provide what’s needed to service equipment effectively. Dealers and providers can easily apply through IronDirect’s self-service portal.
• 3. Choose from authorized service partners: The company already has hundreds of service locations throughout the United States, Canada and Mexico.

This service starts right with your smartphone. To simplify and expedite the process in real-time, IronDirect offers expert support access via its online technical service specialists. Download the DirectAssist app or call the number and receive remote assistance to help service your equipment, communicate one-on-one in real time with specialists via voice, video and text chat, share photos, videos and documents and receive important updates through broadcast video communications and service announcements.

Control the Lifecycle, Make Money

IronDirect is throwing out some eyebrow-raising numbers when it comes to savings. How? By allowing the owner to control that lifecycle of a machine: buying new at a cheaper cost; making data-driven decisions with real-time information; expediting repairs and improving oversight; and maximizing resale value. That last one is key: Once the owner wants to unload a piece of IronDirect equipment, the company will help them sell it. In theory, the resell value should be streamlined because of the telematics and service tools IronDirect is offering customers. To help with effective asset management, IronDirect offers three services to contain costs and optimize resources:

• 1. Telematics: DirecTrac telematics system, built into every IronDirect machine, monitors and reports equipment usage and provides analytical information to aid in asset management decisions. This comes free for the first three years.
• 2. Best-in-class uptime: This means an extended warranty, convenient online parts ordering with overnight delivery and full-service support minimizes maintenance expenses and maximizes uptime.
• 3. AssetZone: This software maximizes utilization throughout your equipment’s lifecycle by enabling strategic redeployment, sale and trade-in.

With the success of e-commerce sites from Amazon to Groupon, IronDirect seems like a pretty clever concept. On top of its innovative idea, the company is backed by a pretty impressive staff with a lot of machine experience. “I am excited to take my entire career of working in construction equipment, a very conservative industry that hasn’t changed a lot, and melding it with technology tools and an e-commerce company that has all these progressive ways of doing business,” said Andy Clevenger, vice president of operations, who’s spent years with Komatsu, John Deere, Volvo and Sany. “I want to take those two things together and do something that this industry has never done before.”

Keith Gribbins is associate publisher of Compact Equipment.