Having His Say: Steamed About Second Hand Equipment

There was an article in The O+F Advisor titled ‘Caveats of Buying Second Hand Equipment’ by Robert Babel dated January 24, 2007. I have many problems with this article because so many statements in it just don’t ring true to me. The points that Mr. Babel makes that I have a problem with are in the first seven paragraphs. I would like to take it one line at a time. Mr Babel’s words will be in quotation marks at the heading of my paragraph.

To read Babel’s article, “The Caveats of Buying Second Equipment, click here.

Paragraph 1: . “If equipment is more than five years old, it is most likely not worth reusing”

Five years means nothing – steel does not degenerate by itself without rusting or being damaged in some way. Pallet rack, cantilever, shelving; time is just not a factor by itself. This is a statement that is too general to have bearing here.

Paragraph 2: . “If the decision is made to install used equipment, a budget and plan to replace it during the next few years should be included in your evaluation”

This sounds like a line that the manufactures’ of new equipment would be real glad to hear. The used rack that can be purchased today for considerably less than new will be standing just like the new rack may be in 10 or 20 years – assuming no one knocks it over with a forklift or allows it to rust from neglect. The only difference will be the operating capital that the business owner has maintained to use elsewhere in his enterprise.

Paragraph 3:”Equipment that appears to be good might not be. … You have to be cautious of installing equipment that your company had placed in storage. It could have hidden defects, which is why it was put in storage in the first place”

Can anyone use their eyes along with common sense to determine if equipment is good or not? No body sends a rank amateur to purchase equipment to outfit a warehouse. Professional businessmen look to professional pre owned equipment dealers for counsel and good prices. And, how many places do you know that would store equipment that is defective? Who has the spare room for a foolish move like that? Defective equipment is repaired or discarded.

Paragraph. 4 “Most second-hand equipment comes without a warranty, which means the seller has no accountability for it’s performance.”

This is just not true if you do business with a reputable dealer. We guarantee our product and workmanship if we provide the installation. I would say the bulk of the pre owned equipment dealers in this country do the same.

Paragraph 5: “All too frequently, little information about the used equipment and its past can be verified. The seller often works with limited information about the previous user, so important questions may have to go unanswered”

We spend untold hours with our clients answering and asking questions. First, to understand their needs and then to fill that need with the right solution. We inform our customers as to anything pertinent – the make, style, and capacities of the pieces they are buying. We have a very stringent grading system as to condition to make it possible for us to be representing our product for what it is. For the customer interested in the cosmetics, we e-mail out digital pictures every day for them to view. As for “its past being verified, and limited information about the previous user” does Mr. Babel think we find this stuff just laying abandoned at the side of the road? We can tell you where every piece of our equipment came from and for the most part, what it was used for. But honestly, we are talking about pre-owned equipment here. The condition of the equipment at the time of sale and the dealers reputation are far more important than any story about where it spent its past.

Paragraph 6: “Ratings in manufacturers’ catalogs may not be accurate years later. Regulations and standards are constantly being amended; what was considered safe five years ago may not be safe now.”

This is another statement that seems sensational in the way it is presented. If the catalog stated a beam had a capacity of 3000 pounds five years ago, guess what? 3000 lbs is still 3000 lbs. today. As for standards being amended, that is perhaps a reference to the newer seismic ratings. So, would a thinking person get a five year old seismic chart to determine the safe capacities for his warehouse? No, he would get current statistics and purchase his equipment accordingly.

Paragraph 7: “Used-equipment dealers and online auctions depend on quick action by the purchaser. Most don’t have an inventory.”

This is probably the statements that puzzles me the most. There are a couple of points to address here: 1. You can’t equate a pre owned equipment dealer with an auction house. They are two distinctly different businesses! The auction house technically doesn’t have any inventory, just what is consigned to them for a given sale.2. The quick action by the purchaser – that sounds scary. We all know what he means here; it’s that quick decision we want people to make so we can cash their check before they know what we sold them. Quite to the contrary, I would say that there is a great deal of time, thought and consideration that goes into the purchase of business equipment. No one goes into a capital expenditure with a cavalier attitude. This is not like a new necktie that can just stay in the closet if it doesn’t suit you. And point 3; If we don’t have inventory, then what is all that stuff that we have in our 500,000 sq. ft. warehouse? What is all of the equipment that’s around our office on our acres of secured grounds?

And now comes the ‘trump’ point of all; one of the best reasons for buying used. This is second only to the financial advantage; and one which Babel did not touch on at all. Recycling! Everyone knows that it reduces the solid waste stream resulting in saved landfill space and conservation of natural resources. Well, we practice the ultimate in recycling – by putting the equipment back to work at the job it was originally designed to do! No natural resource depletion in melting it down and reshaping it. We put it right back into service! And this is so vast a practice, the actual numbers cannot be obtained. There are so many used equipment resellers, crossing the lines in types and varieties; that we’re not able to total accurate numbers of pounds recycled .

To Mr. Babel’s credit, in the remainder of the article he sets out the kind of good advice we give to our clients every day. The majority of used material handling equipment dealers strive daily to satisfy their customers with value. We like repeat business! We like word-of-mouth advertising! We like referrals! If only Mr. Babel would have come to us for his past purchases. I’m sorry if he bought something that was less than he desired at some time in his life. But please don’t take it out on legitimate businesses that offer more for the money than the ‘new only’ guys can. Making sure that you are totally informed is important before you make a purchase, or write an article.

Steve Kinsella is an outside salesperson for Kansas City-based Warehouse One, Inc, a provider of new and used material handling equipment.

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