In today’s information-based purchasing there are more and more ways to purchase cheap used equipment for your facility…and more and more ways to get into trouble. With the rise in popularity of auction sites selling used equipment, a buyer can find great bargains on used equipment, but what pertinent information do you need to consider in order to protect yourself?
There are many risks to buying used equipment that may not have crossed your mind. I have heard from dozens of frustrated customers who thought they were getting a great deal and later discovered that it wasn’t so great after all.
If you must buy from an auction or surplus dealer, know what you are buying by doing your research! Auction sites and surplus dealers are typically not “out to get you”; however, they want to sell their product. They may give only limited information and may not have time to give additional information to a customer who requests it. If you are interested in buying a used device and intend to put it into immediate use, you will need to know as much about the equipment as possible. Here are some tips based on real life experiences to help you make informed decisions when considering the purchase of used equipment:
- Completeness One of the most overlooked aspects of buying used equipment is missing accessories that are not supplied with the base unit. The cost of necessary accessories to make a device completely operational can quickly kill your great deal. Find out from the seller through verbal or email exchange what accessories are missing. Insist on several photos of the device from various angles and views showing the important and critical areas of the device. Then research the prices of these missing accessories (new or used) before you buy. You may be surprised how much these add up to.
- Research Service History You should try to obtain the service history on this particular device from the OEM by providing the OEM service technician with the serial number. This benefits you if there were past or recent significant service issues; hence a possible reason the current owner is getting rid of it. There are also instances when the OEM will blacklist a device and it somehow makes it back into the used market. Stay far away from blacklisted serial numbers.
- Vintage and Service Revisions Are there different vintages of the model you are looking at purchasing? What revision is it? Get the serial number and use it to check with technical support at the OEM to know if software and/or hardware upgrades are needed before the device qualifies for active service again. Get a quote on the price and availability of software and hardware. Software and hardware can run into thousands of dollars and could easily squash an otherwise good deal.
- Access to Support Does the manufacturer still support the device with new parts and services? Does a third party service group support the device with new or used parts and services?
- Purchase a Guarantee for possible recourse If the equipment turns out to be not-as-described or misrepresented, you need an upfront agreement for recourse. Does the selling party guarantee against DOA, and if so, will the seller return your full payment if the equipment is not as described?
- Service Contract Cost
If your facility mandates that equipment be covered by a service contract, you may have to do some research. Will the OEM or a third party service provider cover the device under service contract, and at what cost?
The more expensive the device is (this may equate to mechanical and electrical complexity) the more important it is to know if service and parts are supported for the device.
You will want to be aware of any OEM policies for logistics, installation, and services pertaining to pre-owned equipment. Find out from the OEM if an install and function check is needed in order for them to place it under a service contract. There are some manufacturers that will perform service on a third-party-placed piece of equipment if you do it by their rules.
Knowing the cost of installation, set up, and training from the OEM or a specialized third party company is necessary, especially for Class III federally regulated devices such as medical and laboratory equipment.
In some extreme cases, even if you were able to get the device for free, it could cost you more in money and time to get a used piece of equipment fully operational with the proper support than to purchase new. Ouch!
- Supplies/Reagent Cost When purchasing a used device that uses proprietary supplies or reagents, you need to be aware that you may have to pay full price for these, with no leverage to negotiate a discount. If you haven’t checked into pricing the supplies/reagents before purchasing the device, you may find that list prices apply. Sometimes, OEM’s will work with you on discounting the price of their supplies, consumables, or reagents if you sign a contract for a certain time period or a certain recurring quantity.
- Shipping and Transportation
Shipping is also a very important part of the purchasing process. Equipment is damaged by the tons every day because it is not packaged or handled properly. If you are more familiar with the equipment than the seller is, give detailed instructions to the seller as to how it must be packaged. Shipping a medium to large fragile or delicate equipment in only a cardboard box is almost a sure way to spend many unwanted hours with a claim adjustor. Typically the extra cost of having the item crated or shipped on a pallet with insurance will be worth it in the end.
Buying from a reputable refurbishing company will greatly reduce your risk.
You may be surprised that there are companies who are highly specialized in selling reconditioned, refurbished, or remanufactured equipment for your specific industry. It is very important to distinguish between a company that actually refurbishes equipment and one who only resells and brokers. Watch out for companies that claim to refurbish or rebuild equipment but know very little about what entails full refurbishing and rebuilding for that specific device or category of equipment. They will most likely fail the expectation of the buyer. Find out if the company specializes in this type of device, has onsite trained technicians, can prove their refurbishing procedure, and can support the product after the sale. It may be important to find out what will be replaced, rebuilt, recalibrated, re-lubricated, resurfaced or refinished. A specialized company will also be experienced in the above 8 points mentioned. Because of the costs involved with rebuilding a product and the risk the company incurs for holding a warranty you will most likely pay more for the device; however, a solid refurbishing, rebuilding, or remanufacturing company with a good reputation in the industry provides the lowest risk alternative to acquire a quality and reliable device.