The good news is that business is going well, and your winery or craft brewery is ready for an expansion or upgrades. The bad news is that capital equipment is expensive. Pre-owned machinery is one way to save money on that equipment. In our last post, we reviewed when to consider buying pre-owned equipment. Now that you’ve decided pre-owned equipment makes sense for your project, it’s time to separate the valuable from the junk and other equipment that won’t work for your needs.
As often as I’ve worked with pre-owned machinery, I felt like it was worthwhile talking with a friend who has been buying and selling pre-owned equipment for 40 years. Surprisingly enough, even though his sales are ‘as is, where is’, it really doesn’t help his business, or his reputation, if what he sells does not ultimately solve his customer’s problem. His additional insights were enlightening and are included here.
We cannot emphasize enough, the most critical factor when considering pre-owned equipment is whether it meets your needs. Those specifications should already be outlined in your user requirements document. So, before diving into looking under the hood of a piece of pre-owned equipment, revisit your user requirements. Know what features are the highest priorities and what features have room for compromise. Keep in mind, not all compromises are equal, so make sure you establish early how much the project can afford.
Here are a few ways to ensure any piece of pre-owned equipment you select is right for your application.
Make Sure It Solves YOUR problem
Budgets are naturally high priorities for any project. Lower costs make pre-owned equipment easy to fall in love with. However, buying pre-owned does not mean settling for the wrong piece of equipment just because it’s a “really great deal.”
Remember, the original owner bought the pre-owned equipment for another project based on different user requirements. As such, the pre-owned equipment is not likely to be a perfect fit. This is why it is so important to treat your user requirements as an authoritative guide that ensures any “really great deal” is also “really what you need.”
Bring Along the Experts
Just as you sought input from various stakeholders and experts when writing the user requirements, they should be part of the decision when evaluating pre-owned equipment. It is also a good idea to engage an equipment expert to evaluate pre-owned equipment, especially when dealing with an unfamiliar process or higher level of technology. Bear in mind, the best expert for the evaluation may not be on staff. An outside equipment consultant is a valuable resource for finding and evaluating pre-owned equipment. We’ll talk in a few weeks about the value of building relationships with equipment vendors. For now, suffice to say, if you have a good relationship with the original manufacturer, another option is to enlist their help, even offer to pay for their time, to do a ‘once over’ assessment for you.
Do a Little Detective Work
At the risk of stating the obvious, the quality of pre-owned equipment varies widely. It runs the gamut from ’brand-new but never used’ to ‘decades old with thousands of operating hours’. Unfortunately, there isn’t an equivalent to CarFax to consult, so the buyer needs to do their homework.
The seller may provide some of the history, but it may be necessary to dig deeper. Contact the manufacturer, request maintenance logs, and contact companies servicing the equipment. Ask about the original installation, modifications, updates, warranty repairs, service, and maintenance. Use your network. Ask around. You’d be surprised what you can learn. Find out if there is a history of problems with the brand or model of the equipment under consideration. Then, assess the risk posed to your application by the piece of equipment.
Also, view equipment available on the internet with caution. It is often difficult to assess what is good or bad via an online advertisement. Physical verification is a must. Reputable dealers will encourage a site visit. Pass on anyone who discourages one.
Assess Risk
Given that pre-owned equipment isn’t going to be an exact fit for your user requirements, make sure any compromises are well understood. Remember, the equipment might be readily available, but parts, upgrades, and any customizations require time and money. Be sure to include the lead time, cost and labor when assessing an acquisition.
One increasingly important item that is often overlooked is software. Check whether the software licensing and support are included with the purchase. Make sure the operating system is up to date and that the manufacturer still supports it. Also include time and resources for programming and training as well.
Validate the Equipment
Alongside inspecting the equipment itself, it is just as important to inspect the supporting documentation that comes with it. Documentation should be part of a pre-purchase inspection and explicitly mentioned in the contract. Manuals, guides, drawings, and specifications are expensive to recreate, reverse engineer, or purchase. Proper documentation for the equipment is the difference between new equipment sitting idle for weeks or months and bringing it online immediately. This is especially true in heavily regulated industries. Also, the contract should specify how any warranty transfers are executed unless the equipment is sold “as is.”
For all the reasons we mentioned in our last blog, pre-owned equipment can be an excellent way to go. With due diligence and enough precaution, there are tremendous bargains to be had for pre-owned equipment in excellent condition. The keys are to know what you’re getting and always make sure it meets your specifications!
Speak Your Mind