Posted By: Andy Kamashian | Posted On: February 16, 2018
The 7 Deadly Sins of Buying New or Used Machinery
When manufacturers consider buying or adding equipment, they often make some of the dumbest mistakes for the weakest of reasons. While they may not be actual sins, they certainly are some of the most ludicrous reasons to buy the wrong machine. Whether it's the "well, it comes with a full warranty" or "the machinery dealer is a buddy of mine" excuse, machinery buyers can make tragic mistakes even before they start looking at actual equipment. Read below on some of the most common pitfalls to avoid when you're thinking about adding capacity to your shop...
1) The 100% Error
DON'T buy for 100% of what you do! Buying a machine that is capable of accomplishing "everything" you desire is likely a machine that is 4-5X the necessary cost and one that is likely to be very difficult to operate, maintain, and eventually resell.
Buy based on the 80/20 rule: If it will do 80% of what you need, consider it a valuable offering! Because chasing that elusive 20% (parts that you run once or twice per year) will drive the equipment and tooling costs into the stratosphere and are very likely cheaper to job out anyway.
Being Starstruck or better put, "Brand Stuck" can put the wrong machine in your shop just because it's the right color. DON'T let a popular brand be the sole reason you're buying that equipment. Sometimes, Brand X makes great Machining Centers but their other equipment is far less desirable, serviceable or high-performance. Having a mixture of machinery from different suppliers brings added capabilities and lets all suppliers know your looking for the right equipment for your needs, and budget, not just trying to color match your shop.
The age-old acronym of KEEP IT SIMPLE STUPID still stands true. Buy the machine that meets your needs—NOT one that does everything or just the one that your sales rep recommends. With more specialized equipment, not only is your initial investment more expensive, but it will be harder to find a buyer for that exact need on the used market. Your "Loaded to the Hilt" machine will suffer a lower the resale/wholesale value. Try to purchase a machine that can go into just about any job shop rather than a robotic-fed, custom tooled behemoth; UNLESS the machine will be paid off in the first year of a multi year contract; allowing it to be scrapped at the end of your use if needed.
4) "But He's My Buddy"
If your equipment supplier is your friend, you are compromising your company on every transaction you do with them. Remember your responsibility as a good steward of your company's money and assets is to be responsible to YOUR company, not a buddy with your local machinery dealer. His interests are not yours, he doesn't understand the day to day grind of your company—nor can you clearly see and compare the competitive offerings as you feel you will be "cheating" if you buy from another supplier.
If you have to leave the purchasing decision to another company member, DO IT. If your machinery dealer friend is truly a friend, he/she will understand, win or lose, that you're doing what's right for your company and in the end it's your company's overall success that they should want anyway.
5) Failing to Valuate
Ask us how much the machine you're considering will be worth on the resale market in 3, 5, 7 and 10 years out. The higher the value, the more secure your investment.
Whether your machinery comes with No warranty, parts-only warranty, or a limited warranty, it can still be a great investment considering that 90% of machine tools are troubleshot and repaired over the phone and internet today—and that applies to used machines too! The buyer that thinks "I'll have a tech here tomorrow if I buy this brand new" is a fool with their company's money. ALWAYS buy a machine with the expectation that you're on your own with a cell phone and an 800 Number.
Buyers often think machinery freight is half the price of a machine when it's actuality very often less than 5% of the machine's value. Buy it at once as it will likely be on your floor and either making money or in your way for the next 10-15 years. If you have to pay 1-2K more for freight, DO IT for the right machine. If you have to wait 2-3 more days for it, so be it. Because, once it on your floor and making parts, you will be very glad you did.
But Wait! There's more.....BONUS #8 - Upcycle
Many buyers often buy new as they don't want to "have anyone else's problems," only to be stuck with a new, unproven machine in the field and all of the problems of the R&D department at their new machinery supplier. Considering an inspected, tested and qualified piece of used machinery as a good option. Sometimes, new technology far outperforms older systems. But, a good quality used machine can usually perform the same task at the same speed for far less than the new equipment AND be upgraded and equipped with all the latest safety standards and controls.
We at Southern Fabricating Machinery Sales, Inc. are experts in helping you select the right machine for your needs AND Budget. We have AMEA Appraisers on staff who are specialists at valuating machinery and can assist you in putting the right numbers on both your used and new equipment investment. Call us today to see how the new machine your looking at today can be remarketed in 3, 5 and 10 years down the road or for a great option in a quality, value priced, repurposed used machine.
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