Used Equipment: Have No Fear

Dec. 1, 2006
Buying used material handling equipment need not be scary if you follow this advice.

Griffith says a common approach to purchasing used lift trucks is for the buyer to call and say they need a specific capacity of truck. "Usually, the person is not fussy about age or grade of the unit," he says "so we have to pay attention to the warranty and service that will be required to back up the equipment."

It is people who must back up that warranty and service, says Griffith. "Age of the vehicle and hours are a given," he says. "As a distribution center manager, you have to know that if there is a problem, you have someone to call."

Griffith says the market for used vehicles has been strong. "We are aggressively looking for quality used trucks for our Hyster rental fleet," he says. "In the rental and leasing business, it's all about lowest acquisition cost and best utilization of the vehicle. We need the vehicles to increase the size of the [rental] fleet and to hit certain price points we can't reach with new vehicles."

Griffith is of the opinion that selling used vehicles does not cut into his new unit sales. "They're two different markets," he says. "If a company is operating less than 500 hours on a truck, I don't know why they'd even consider buying new."

Used versus new

"One of the things eBay does is prop up the value of used equipment, in general," says Danny Leffel, manager, eBay Business (San Jose, Calif.). "Trade-in values are increased, making it easier for end users to buy larger or better-equipped vehicles, thus getting better value for the dollar."

The assumption is, a person reluctant to buy a used lift truck because of concern for its trade-in value, will be more likely to purchase a vehicle from a company with a good reputation.

It was not long after online auction reseller eBay became part of the world's lexicon in 1995 that business owners recognized a place to sell and buy used office equipment. The business and industrial category evolved over the years to become its own community.

By 2004 the site had increased to $3.3 billion in transactions for the year. Leffel says in the third quarter of 2006, the business and industrial category realized gross merchandise value of $1.8 billion. At any time, buyers can find more than a quarter million products in the business category. Capital goods spending is the fastest growing segment within that category.

There are more than 650,000 individual items for business and industrial equipment on eBay. "We see virtually everything a business person could want come online," says Leffel. "If you see it in an industrial supply catalog you can find it on eBay. And it's not always about money."

There are some advantages of buying used equipment online that are not readily apparent, says Leffel. Buyers are able to reach out of their local areas to find items not available. "This appeals to the small guy who does not think he's getting a fair deal, or the same deal offered to larger companies, from his local distributor."

So the small company can compete better, or at least feel like it's dealing on the national market rather than just within its local area. Much of this holds true for the seller, as well. Particularly, says Leffel, if a company wants to sell specialized or rare items. "Some items are impossible to get rid of locally," he says. "The online world offers exposure to a national, even international, customer base."

And sellers that are also distributors find new customers on eBay who might never walk in the door of their store. "Another part of that issue is," says Leffel, "the distributor might get customers who are local, but have never heard of him."

Buying an antique bamboo fly fishing rod online is one thing; purchasing a $20,000 heating and cooling system, or a $10,000 lift truck, is something else. "We've taken a lot of the fear out of buying on-line," says Leffel. "The first thing I recommend to a new user is to contact the seller before placing a bid. We make it easy to contact and communicate with sellers."

He adds that smaller contractors in particular like this service. They feel less intimidated than by engaging with a large distributor who might not want to deal with a single piece of equipment. Things like simplified pricing, seller assistance and online negotiation tools such as "best offer" make it easy for the seller and buyer who might want to sell or buy outside the auction arena.

Is it safe

Buyer protection is always a concern in any business transaction. "In the categories designated as capital equipment," explains Leffel, "we have a business equipment protection plan." The plan covers buyers up to $20,000 against fraud and material misrepresentation. This covers things like a blown engine the seller might have forgotten to mention in his ad. In non-capital equipment, the buyer is protected through eBay's PayPal program.

Leffel says all indicators for online buying and selling are positive. "B-to-B is a huge market," he says. "In 2005 there was $4.7 billion worth of businesses-buying-for-their-businesses on eBay, and that is nowhere near the top end of this market."

Just how comfortable are people becoming with buying online? Leffel says the biggest deal he's seen on the Web site was the recent purchase of a corporate jet for $4.9 million.

Pssst! Wanna Buy a Used Robot, Mister?

If the task at hand is dull, dirty and dangerous, perhaps a robot is the answer. And while the cost of a new robot is in the tens of thousands of dollars, a used machine can often be purchased for a fraction of that cost. According to the Robotic Industry Association (RIA, Ann Arbor, Mich.) there are about 100,000 robots currently in use, most with a lifespan of 10 years.

Many robots come onto the used market not because they are worn out, but because the controls or jobs they were designed for have changed. Looking at the number of robots available on eBay, supply and demand for these workhorses remains steady. If a company has in-house expertise, it can save money purchasing used equipment. Here are some tips for buying used robots:

  • When buying, watch the robot run to confirm repeatability,
  • Find out as much as possible about the vendor and distributor,
  • Always demand a full set of manuals,
  • Used robots offer a good low-cost source of spare parts.

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