If you are a business start-up with limited resources, you may flinch at the cost of buying new equipment. But there is no rule that says you have to buy brand new. In fact, the used equipment market is a flourishing one.
You may contemplate buying second hand equipment for any of the following reasons:
- The cost of used machinery is very much less than that of a brand new one.
- Your financial position constrains you to buy brand new.
- Used equipment is often more available than a new one. And sometimes, availability may override all other considerations.
- Used equipment can satisfy your requirements, in which case – what’s the point in buying new?
Used can still be good
It’s natural to have reservations about used equipment. It makes you wonder why it is being disposed.
But there are a number of valid reasons an owner is selling it used machines, not necessarily related to its malfunction or obsolescence.
Speaking of obsolescence, what may be obsolete for one business relative to his current production needs is often good enough for the needs of other companies.
A firm disposes of its existing machine because it no longer answers its current production requirements. It may be because it has modified its product design or its production process. Or it may have lost a contract for a certain product. Or it may need something more heavy-duty. Or simply the business may have closed shop.
Sources of used equipment
Whatever the reason, a great deal of used equipment is available and can be purchased in any of four sources: directly from the owner; through used equipment dealers; through brokers; and through auctions. But the great majority of purchases are made through dealers who specialize in buying, overhauling, and marketing certain types of equipment.
Used equipment dealers sell two kinds of machines: reconditioned and rebuilt.
A reconditioned machine may sell approximately 40 to 50 per cent of the price of brand new equipment and carries a dealer guarantee. It has usually been cleaned and repainted; its broken and worn-out parts replaced; and it has been tested under power.
A rebuilt machine typically carries more dealer warranty and usually sells for 50 to 70 percent of the price of brand new. It has usually been completely dismantled and built up again from the base. All worn out and broken parts have been replaced; surfaces have been reground and realigned; the machine has been reassembled to hold original tolerances; and it has been tested under power.
Caution in buying used equipment
It is usually difficult to estimate the true condition of a used machine and to estimate the quality and length of service it will provide. Thus, it is essential to get the help of an experienced production or maintenance specialist to check the equipment.
Other precautions to take are as follows:
- Check the reputation of the used equipment supplier. Shop around; take a close look at several machines before buying.
- Whenever possible, a machine should be observed under power through a complete operating cycle.
- Determine the age of the machine. If not available in the seller’s record, this may be traced through the manufacturer through serial number identification. The combined knowledge of age and usage history is a key guide in predicting the future performance of a second-hand equipment.
- When preparing the purchase order, make it a point to include all essential data – the full description of the machine, the accessories included, warranty provisions, services to be performed before shipment, and shipment terms.
Generally speaking, sellers do not provide service for used equipment after the purchase. All transportation, handling, installation and start-up costs, as well as risks, are usually borne by the buyer.
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Photo: “Gilberts New and Used Restaurant Equipment” by David Bruce Jr., c/o Flickr. Some Rights Reserved