Skip to Main Content

Don't Be Afraid of Commitment

Don't Be Afraid of Commitment

NAFA member, Duncan Aviation, discusses six reasons why you’re better off going exclusive with an aircraft broker.

SIX PITFALLS OF A NON-EXCLUSIVE RELATIONSHIP

Aircraft sales brokers frequently talk to owners who believe they are better served to have their aircraft represented by multiple brokers rather than committing to an exclusive agreement. They believe this will raise the aircraft’s market exposure, increasing the likelihood of it selling quickly, and result in a more lucrative transaction. This is rarely the case.

A reputable aircraft broker will typically not enter into a non-exclusive contract. Here are six reasons why you’re better off going exclusive.

EXCLUSIVITY COUNTS

I met with an owner who had two aircraft for sale. One was already on the market without an exclusive agreement, and the owner was planning to make the same sale arrangements for the second aircraft.

After 30 minutes of research, I found the first aircraft represented by five brokers at three prices, all with different total aircraft hours. One broker even failed to mention the engine programs. This illustrates the feeding frenzy mentality and misinformation that prevails when an aircraft is in the market without exclusivity.

After the owner discovered how his first aircraft was being represented, I secured the exclusive agreement of the second aircraft.

IN WHOSE INTEREST?

With no certainty of getting paid, non-exclusive brokers typically do not invest much time and money to represent an aircraft thoroughly. These informal arrangements create competition among brokers instead of buyers, so the non-exclusive broker may lean toward persuading the seller to lower the price quickly in an attempt to get the first bite. There is not the same incentive for a non-exclusive broker to ensure that the seller’s best interests come first.

Read full article here

This article was originally published by Duncan Aviation in December 2022.


 January 23, 2023