REMINDER: Value is what someone is willing to pay

Written By: Joe Braddock

As a seller/distributor of avionics components and instruments for over 25 years, we have seen our share of interesting vendors and negotiations.  We routinely receive calls and emails asking what someone’s parts or excess might be worth to us. Most of the time, we can reach a fair price for both and agree to purchase. Other times, the other person may not like our offer and decide to either go elsewhere or hang on to what they have.  I’m here to tell you that it’s not a good idea to hold out or hang on to your parts anymore.

The parts business (especially with avionics and instruments) has changed so rapidly in just the past 10 years that what you have now could be worth less and less as time goes on. The rate of declining value is increasing even more with the introduction of new, more affordable technology for even the smallest of aircraft.

So what is your stuff worth?

Let’s look at the definition of a free market first.  The ways and means of a free, open market are that prices for goods are determined by the market and consumers.  At the same time, the laws and forces of supply and demand are free from government intervention or monopolies (in most cases).  Free markets have operated this way for thousands of years. For the most part, it doesn’t matter if you are selling goats or GPS receivers.  After all is said and done, something is only worth what someone will pay for it.  You may think it is more valuable but your buyer may not share the same love affair with what you have.

In the past, avionics systems were less centralized meaning that comm, nav, and other boxes were bought and sold independently not part of a larger avionics system.  Glass cockpit retrofits have flooded markets with parts from these legacy systems.  High supply + lower demand = lower prices.  Economics 101.  I often like to use comparisons to products that people are more familiar with like automobiles. Would you pay today’s New price for a 10 year old car?  No.  So what would you pay?  Whatever the ‘market’ says you should pay.  That’s the way a free market works.

Today, it is easy and quick to get a rough idea of what something is worth – EBay, e-commerce sites, search engines, and online databases.  No more mystery or guessing needed. You can easily get an idea of someone who is lowballing you. Once again, there’s not a whole lot of uncertainty with the value of someone’s offer.  Receiving a lower than expected offer is an unpleasant surprise and may be dejecting but it’s part of a free market for better or worse.  On one hand, you may think you are taking a loss. However, look at it this way – something is better than nothing.  I’ve seen my share of inventory around the world that once was worth something, held on for too long, and now is scrap. We’ve made offers on inventories where people told us “No Way” only to have them come back later and have to tell them that we have no interest.  As mentioned earlier, that amount of time it takes for a part to decline in value is decreasing.  Sorry, we can’t buy yours if I already bought 10 others since we last spoke.

Sometimes, as the saying goes, you have to take the money and run. We all don’t like to do it, but at times you have to take a loss to get something instead of nothing.  That’s business.  It’s tough to make the decision but sometimes you have to cut your losses.

I’m not here to lecture anyone about basic economic principles or obvious day-to-day business activities. However, look at it as more of a reminder that the value of what you have laying around in surplus is definitely not increasing. It’s quite the opposite and there are many current market factors driving that. And maybe you don’t have any cost in to your parts and don’t really care if you sell them or not. We get that, and it makes sense but someone still has to lift all that stuff into a garbage dumpster when it is completely worthless someday.

So let’s make a deal!

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