With the manufacturing industry set to contract this year, we can expect a lot of used manufacturing equipment on the market as companies are either shutting down or trying to stay afloat.
This is a great opportunity to lock on to some great deals if you have been dreaming of starting a small-scale manufacturing business or already have a company running that could use the extra inventory.
Whatever the situation may be, you need to be sure you’re careful in spending your hard-earned cash. Just like buying a used car, you may end up paying more in repairs and maintenance instead.
In this article, we’ll take a look at four things you should know before buying any used industrial equipment.
Image by Alex Freeman
Find Great Deals Online
You might have gotten a tip from a friend that a local company is selling its inventory. Before you jump the gun, you may want to consider looking for the same model online.
There are plenty of online marketplaces like Revelation Machinery that offer a platform for people to buy and sell used machinery. Think of them like the eBay of manufacturing inventory. Just like any online marketplace, you’re bound to get competitive prices, and some do offer flexible financing options.
Age of Equipment and it’s Operating Hours
Just like buying a used car, and an older machine would be more prone to wear and tear. But if you’re lucky, you may find a gem that is still under its manufacturer’s warranty.
It’s not going to make any financial sense if you buy a piece of equipment for dirt cheap but having to pay more in the long run for repairs and maintenance. Unfortunately, there are sellers out there trying to lure customers into buying junk at such a low price.
Each machine is different, and it comes down to your knowledge to figure out what’s the right balance between the two. Keep in mind that age alone shouldn’t be your deciding factor.
A machine that was manufactured twenty years ago but only used at 50% capacity could be a better choice when compared against a machine that was manufactured ten years ago but operated at 80% of its capacity.
The Reputation of the Company
This will take some intuition, but the more research you do on the company selling the machinery, the better off you’ll be long-term. You can start with a google search for the company.
If customer after customer is giving bad reviews, this is a red flag. If the company couldn’t care less about providing the best value for its customers, do you think that it would go great lengths to ensure that its inventory is well maintained? Be sure to look at the machine’s maintenance records even if the company sounds reputable.
If the company is publicly listed, even better. You can even go as far as looking into their financial records to see its overall health. Chances are if they have been financially healthy and stable the past decade, it’s a good sign that they’ve had the resources to maintain their machinery.
Availability for Inspection
Be sure that the seller is happy to facilitate you for an inspection. It’s not enough to look at it from pictures online, and if you feel like the seller is making up excuses to prevent you from visiting, avoid them at all costs.
But what if he’s located in a city on the other side of the country?
Luckily for you, you can hire an independent inspector or manufacturer’s representative to determine the condition of the machine.
One aspect buyers overlook when purchasing machinery is delivery time. As a general guide, buying a used machine won’t take as long as buying one brand new. But it can still take a matter of weeks to get to your location, so be clear with the seller about when you need it by and negotiate the delivery arrangement before you make an offer.