Buying Used Equipment

Any mold shop owner knows that purchasing equipment is a huge investment—and not a decision that is made lightly—especially with a smaller or start-up venture where over-head and cash flow can make or break a business. Depending on the size of your shop, purchasing used equipment may be a less expensive alternative than buying brand new.

According to Ben Hanna, senior category manager of eBay Business and Industrial, over the past three years the company has seen a shift in business buying and selling—which is driven a great deal by the business and industrial sector, particularly manufacturing and metalworking.

John Muzyczka, a sales representative with the Injection Molding Division of Stopol, Inc. (Solon, OH)—an equipment dealer and industry consultant that operates an online auction site dedicated to the plastics industry that sells new and used moldmaking equipment—explains that the primary benefits to acquiring pre-owned machinery are a smaller initial capital investment and a substantially shorter leadtime. “Generally speaking, pre-owned equipment is less expensive and can be acquired faster than you can get a new machine from an original equipment manufacturer (OEM),” Muzyczka notes. “If you want a brand new machine, leadtimes can be as much as 12 to 16 weeks. But pre-owned equipment is up and running in a fraction of that time.”

In agreement is Judith Griggs, president of Fort Worth, TX-based Preferred Machine Tools—which sells pre-owned CNC lathes, mills and machining centers—who notes that purchasing a pre-owned machine means saving at least 30 to 50 percent versus buying new. However, Muzyczka cautions that when deciding between new or pre-owned equipment, buyers may want to examine whether or not warranties can be transferred and if service agreements exist. He says that generally OEMs do not transfer warranties.

In addition, the return on investment (ROI) of pre-owned machinery depends on the circumstances surrounding the purchase, Muzyczka explains. “You have to look at why you are obtaining the pre-owned equipment,” he states. “If you are doing it to fill a special order or because you need to keep operations proceeding with minimal interruption, then you need to weigh the price of the pre-owned machinery against the profitability of the job or order.”

What to Consider

There are several things to be wary of when on the lookout for used equipment (See Used Equipment Buying Tips Sidebar). Griggs notes that just because a new machine may look sharp, it doesn’t mean it works better than pre-owned equipment. “If you are going to inspect the machine yourself, using common sense is always a good start,” she advises. “And don’t worry if some paint is missing. Coolant eats the paint; chips fly against the machine interior and remove paint. I would be much more concerned over a painted machine than one that has not been painted. Mechanically, is the spindle quiet; when the slides move are they quiet; is there any scoring on the ways; is the turret (on a lathe) seating properly in every position—forward and reverse; is the tool changer (on a mill) functioning in every pocket; is the turcite (on a mill) okay, etc.”

Stopol’s Muzyczka agrees, adding that the machine should be operable and the prospective buyer should have the opportunity to inspect it themselves. “Prospective buyers should take advantage of the opportunity to inspect the equipment, watch it run and ‘kick the tires’ in person,” he recommends. It also is important to examine a machine’s history—particularly in the areas of maintenance, retrofits, hours run, type of product and materials used on the machine (whether those materials were corrosive to components or not). And, Muzyczka urges prospective buyers to request any manuals and blueprints pertaining to the machine, and explore the availability of replacement parts.

One should also consider what kind of job(s) the machine will be performing. “When you purchase pre-owned equip-ment, a buyer can be somewhat limited in the payment terms offered and the options available—used machinery doesn’t always come with all the bells and whistles that a new machine may have,” Muzyczka states. “However, retrofit options should be researched prior to purchase.”

Where to Buy

Used Machinery Dealers
Purchasing equipment directly from a company that sells preowned equipment is one way to go. Griggs points out that dealers have reputations to maintain, so it is unlikely a dealer would sell anything that isn’t going to stand the test of time. “It’s very important to us that when we sell equipment, it is in good running condition and it is what we represent it to be,” Griggs emphasizes.

Navigating Online Auctions
Purchasing used equipment from an online auction is another option if you are unable to get away from the shop or can’t find used equipment locally. According to Neil Kruschke Jr., CEO and founder of Stopol, Inc. (Solon, OH), the main benefits of using online auctions are flexibility, efficiency, cost savings, cost effectiveness and global reach. “Sometimes it doesn’t pay to send someone to an auction to buy one machine if the location is remote and it will take someone out of the shop for a great deal of time,” he states. “It makes more sense to go online.”

Additionally, Kruschke points out that an online auction’s search capability can quickly lead buyers to the equipment they are looking for. “When you take into account the time, effort and resources used by companies in trying to find a singular piece of machinery, the ability to find exactly what you are looking for in a matter of minutes—free of cost—is invaluable,” he emphasizes. He adds that similar to using a dealer to purchase used equipment—online auctions allow buyers to get the machinery they need into their shops in much shorter timeframes. A moldmaker also can find and acquire equipment that is more technologically advanced at more affordable prices.

Hanna of eBay adds that online auctions also afford more options to used equipment sellers. “You can reach millions of users in a number of international markets,” he emphasizes. “It’s a great way to reach out to the world and bring a lot more potential interested people to your items. Online auctions provide a forum for small businesses to reach beyond their local marketplace to sell items far beyond their local market or to source items inexpensively.”

Making A Choice

No matter what avenue you choose to explore when adding preowned equipment to your shop floor, the benefits remain the same: the machine you want is ready for shipment, the delivery time is short, the equipment is reliable, and the cost is significantly less than the price of brand new equipment. Taking the time to investigate which option is right for you before you make a purchase will go a long way in ensuring your purchase stands the test of time in your shop.