Supplying the Demand

By Pam Stask - Assistant Editor of Trenchless Technology - January 1, 2010

In order for any project to be a success, the right combination of a good crew and equipment is needed. All the jobsite know-how goes out the window without the right machines for the task at hand. Although equipment is a necessary component, sometimes a shiny, brand new machine isn't in the cards. Nowadays, contractors and their crews rely on used equipment to keep moving from one project to the next.

HDD Broker, a brokerage firm that advertises and sells rigs for private owners, banks and equipment dealers, answered the call for used machines in the horizontal directional drilling (HDD) market. With hundreds of pieces of used equipment, including horizontal directional drills, mud mixing systems and much more, there's something for everyone looking to get to work.

"HDD Broker truly fills a necessary niche in the industry, providing a centralized location where contractors and brokers not only get access to equipment, but receive the knowledge and experience of our team," says Bob Martin, general manager of HDD Broker. "The resources that we have in place have been collected through a decade of used equipment sales and are being added to on a daily basis."

HDD Broker first began in 1999 after the company's founder, Ivan Lauzon, spent six months in Australia. During his stay, Lauzon was approached by numerous HDD contractors seeking out used drilling equipment in North America. Noticing the need and demand for a dedicated source of used HDD equipment, Lauzon returned to his home in Spruce Grove, Alberta, Canada, and started HDD Broker in his basement. Lauzon then brought his daughter, Renée Lauzon-Martin, onboard to create and manage the company's Web site — offering a collection of the industry's used equipment listings from all over the world. Keeping family an important part of the business, Renee's husband, Bob Martin, took on a sales position shortly after.

Then in the summer 2003, the family relocated the company to Victoria, British Columbia, where an office was purchased and new employees were hired. At this time, a dedicated IT department was created to oversee and develop, which had grown from a few dozen listings to several hundred, says Martin. Ivan's son, Michael, who also began in sales started to manage HDD Broker's extensive dealership network. In 2007, management of the company officially changed hands from Ivan to Renéeand Bob. With his daughter and son-in-law in charge, Ivan has assumed an active role in the company through networking with HDD Broker's partners and dealing with local customers in Florida.

Currently, HDD Broker has two offices (one in Naples, Fla., and its original one in Victoria) with more than a dozen employees. Over the years, Martin notes that HDD Broker has sold to hundreds of companies in countries all over the world. Although the biggest offering from HDD Broker is its Web site, more importantly the company offers a service — connecting buyers with a staff of knowledgeable salespeople. For example, when a customer contacts HDD Broker, he/she is put in touch with a salesperson that is familiar with the industry and is willing to work beyond the scope of simple listings.

"More than anything else, HDD Broker is about the people in it," says Martin. "Over the years, a team of dedicated, knowledgeable and hard-working professionals has been assembled that can handle every aspect of a deal. That includes not only sourcing a machine, but negotiating the purchase, handling financing and freight, customs documentation and much more. The average age of HDD Broker's employees is relatively young, which creates an atmosphere of energy and progressive thinking."

Reaching Customers Worldwide

Since HDD Broker is in the business of selling equipment, having an extensive customer base is important. With listings online, the company is able to reach out to a variety of customers all over the world. The majority of the U.S.-based customers are located in the eastern part of the country. In the current state of the economy, however, Martin notes that HDD Broker is now finding that around 70 percent of the buyers of used equipment originate overseas, with 98 percent of sellers located in the United States. The surge in international interest has led to the company focusing its efforts on reaching out to different countries and making purchasing an easier experience.

"Part of the company's current expansion strategy is to focus on bringing HDD Broker's products and services overseas through multi-lingual Web sites and strategic partnerships," explains Martin. "Thus far, this strategy is proving to be very successful, with a substantial increase in the number of international companies approaching HDD Broker to represent their products and services overseas."

HDD Broker is also working hard to expand upon its strategic partnerships, which already include China, Taiwan, Thailand, Australia and New Zealand, says Martin. These partnerships allow contractors to deal with a local HDD Broker representative in their native language, currency and in their own time zones.

"When there's a language or cultural barrier, we look into strategic partnerships," says Martin. "Either we are approached or we approach an existing entity in that territory. That's what happened with a number of our other representatives. We come to know these companies very well and once we determine that their values are aligned with ours, we basically partner for the sake of marketing equipment. It offers the local contractors the ability to deal with a local company that understands all of the local challenges."

According to Martin, the company is strongly looking to expand its business into South America. With a number of beneficial territories to move into, Martin says that South America presented the most potential and rewarding option for the company.

"As a company, we don't just focus on a certain area or territory — we pride ourselves on having a very global perspective," says Martin. "For us, borders are just a simple matter of paperwork and nothing more. We can pretty well sell anything from anywhere to anyone, and we have considerable experience doing so."

Tracking Equipment Trends

With the New Year beginning, HDD Broker looks ahead to new opportunities in the industry. Although the economic downturn affected many, the company remained relatively strong — thanks to the international demand for equipment and motivated domestic sellers. Martin notes that HDD Broker's sales have declined slightly, with sales down about 30 percent over 2008, but the end of 2009 showed significant increases in sales that exceeded the previous year's volumes. The poor economy has also brought about a much more cautious buyer into the marketplace.

"The company has noticed a change in the nature of buyers in general," says Martin. "Years ago, buyers tended to have easier access to funds, were more brand loyal and knew exactly what they wanted. Today's buyers are much more cautious. They heavily research equipment options prior to purchase, negotiate more strongly and are more inclined to be open to different makes and models of drill if it makes more financial or business sense."

Martin also says that this cautious consumer is looking for newer equipment models with low hours. Although the downturn and tight budgets would suggest a shift in demand for cheaper equipment, HDD Broker has experienced just the opposite.

"People are looking for the latest models, such as the Series 2 Vermeer machines and the Mach 1 Ditch Witch machines," says Martin. "Buyers want the latest and greatest packages. People who are buying now are doing so with careful consideration to their needs and not purchasing just because it's cheap. They're willing to spend a little more to get something that's going to be best suited for what they need."

As for the HDD industry as a whole, Martin has noticed that the recession has affected the way projects and bids are approached. Lower bid prices and devalued equipment have made it difficult for contractors to continue on with work.

"One of the biggest issues that we can see right now is the dropping prices of bids and the devaluation of equipment by manufacturers," he says. "We have seen many cases where dealers and manufacturers have stayed alive through this slower time by deeply discounting equipment. The result is a greatly reduced value of both new and used equipment.

"Much as we saw in the beginnings of the downturn in 2001, we are also seeing the bid prices dropping for work. The result is much slimmer margins for contractors, making it a dangerous proposition just to stay in business, let alone make a profit. We forecast much higher incidents of bankruptcy and companies going out of business as a result."

Although the economy's twists and turns have thrown many for a loop, the work must go on. With contractors looking to purchase equipment based on their needs and available funds, the company boasts an experienced staff to make the process much easier. When a buyer calls in ready to find a machine, Martin explains that HDD Broker's sales representatives offer customers with industry and equipment knowledge, as well as advice. For example, Martin says that oftentimes a sales representative will suggest an alternative piece of equipment that would be better suited for the buyer's needs or an equivalent piece of equipment that's better priced — ultimately saving the customer money and cushioning his or her bottom line.

"We're not just order takers — we take this sales journey together with the buyer," says Martin. "The sales representative and the buyer work together to do the research and find the package that's most applicable to their needs."

Branching Out

With the success HDD Broker has found through its original Web site, the company has expanded its offerings online. In November 2009, HDD Broker went live with its HDD Auction Web site, The site offers customers a reverse auction scenario, where the price you see is the maximum price you pay, says Martin.

"Every day, the price on the equipment is lowered by a set amount until someone secures the price with a deposit or until the reserve price is reached," he says. "We are seeing many of our sellers looking forward to this venue to market their equipment, and we have high hopes for its success. People can find the piece of equipment they want, secure it with a deposit and still have the ability to inspect the equipment and get financing in place. The site does away with that unknown factor that traditional auctions often present."

HDD Broker has also created a heavy construction Web site called Iron Assets ( Through utilizing the company's existing formula for customer service and support, Iron Assets offers hundreds of pieces of bank and dealership owned equipment at deeply discounted prices, says Martin. HDD Broker has hired personnel with extensive heavy construction industry experience who are responsible for managing the new division.

"Over time, we've unmasked a very large number of resources and contacts for all manners of equipment," says Martin. "HDD contractors not only need drills and related equipment, they also need machines like excavators and loaders for their day-to-day operations. By opening up this avenue for them, they fulfill their HDD and heavy construction equipment needs through one company."

With projects popping up across North America and around the world, the demand for used HDD equipment is high. Thanks to companies like HDD Broker, contractors can find pre-owned equipment to suit their needs and get the tough jobs done.

Family Values

Bob Martin, general manager of HDD Broker, explains that the focus of the company is centered around family and the values each member follows. With that, HDD Broker has established a set of core values that act as a foundation upon which the company operates, as well as guides the conduct of every employee:

  1. Use integrity, courtesy and honesty.
  2. Exceed customer expectations — every contact with a customer is an opportunity. Make it simple for a customer to do business with the company.
  3. Be a leader — anyone can be one, even if its leading yourself.
  4. Participate and contribute — the company's success is everyone's responsibility.
  5. Pursue excellence and temper it with modesty.
  6. Work as a team, promoting innovation and creativity. Listen and communicate with one another.
  7. Have fun — if you're not, find out why and change it.

To further emphasize the importance of these values, the company has developed an employee incentive program called the "Broker Buck." This rewards staff for personifying the core values in their interactions with customers and each other. Martin notes that each employee also has a copy of the core values posted at his or her work station as a reminder of their importance.

Published on Trenchless Technology.

This commentary is presented for informational purposes only. It is not intended to be a comprehensive or detailed statement on any subject and no representations or warranties, express or implied, are made as to its accuracy, timeliness or completeness. Nothing in this commentary is intended to provide financial, legal, accounting or tax advice nor should it be relied upon. Neither HDD Broker LLC nor the author is liable whatsoever for any loss or damage caused by, or resulting from, any use of or any inaccuracies, errors or omissions in the information provided.