When businesses consider the purchase of industrial equipment and machinery, both new and used options are available. While many businesses choose to source new machinery, assuming that new equipment will deliver more efficiency and ease of maintenance, this may not always be the case. Today’s equipment provides many years of useful life – and reconditioned equipment that was once put out of service due to plant closures or changes in production strategies may offer a fantastic value. Learning about the buying process and understanding the many considerations involved in making such a purchase can help production managers mitigate any perceived risk associated with buying used industrial machinery. Did You Know? Reconditioned industrial equipment can sell for 30 to 70 percent less than a comparable piece of new equipment, which may become a significant factor when making a purchase.
Considerations When Purchasing Reconditioned Equipment
Required Time Frames: Most new industrial equipment and machinery manufactured is “made-to-order”; that is, it will be produced after an order is placed and according to the customer’s specifications. Unfortunately, this often results in an extended lead time – the period that elapses between when the order is placed and when it is delivered and installed. These lead times can be significant and impact production efficiency. From purchase to installation, the typical wait time on reconditioned industrial machinery (that does not require custom fabrication) is two to three weeks, compared to six months or longer for new equipment orders.
It stands to reason that shortening industrial equipment lead times can increase overall productivity. If you need a piece of equipment sooner than what a manufacturer can deliver, purchasing from a reputable reconditioned equipment reseller may be a better solution. Purchasing Cycle:Engineering studies have pointed to the reality that the more expensive a piece of equipment or machinery is, the more likely a company will spend more time – up to nine months on average – thinking about whether or not to make the purchase. Conversely, reconditioned equipment is associated with a significantly shortened purchasing cycle – typically less than three months. The ability to make more rapid purchasing decisions can have a positive impact on the overall productivity and efficiency of the business. Purchase Price: Purchasing used or reconditioned industrial equipment is typically much more affordable than purchasing a new equivalent piece of equipment. The difference in price depends on the quality and condition of the reconditioned equipment but typically ranges between 30-70%. Depreciation as it Relates to Resale Value: Most industrial machinery will depreciate significantly in the first 12 months following a sale. After an initial drop of 20 to 40 percent in value, the equipment’s price typically stabilizes for approximately five years. For more information regarding the specific equipment you are considering, refer to the relevant sections of the IRS’ property depreciation guide– Publication 946.
Be Sure to Check Out the Source of Your Purchase
When purchasing used, reconditioned, or refabricated industrial equipment, it is imperative to verify the reputation of the seller.
To ensure that you are buying from a reputable seller, check out their longevity in the business, the background and expertise of the team, and any reviews that may be available. Call the company and discuss your needs with the team to determine their expertise. At Zwirner Equipment Company, we are proud of our robust reputation for selling the highest quality reconditioned equipment. But our services don’t end there. Whether you need to source a new piece of equipment, are looking for custom fabrication, or are concerned about professional delivery, installation, and maintenance- we’ve got you covered. Call today to learn more about how we can help your manufacturing facility to maximize budget, efficiency and productivity.
