Buying Used Machinery Old, not Obsolete: A Guide to Buying Second–Hand Equipment

Author / Editor: Krishnamoorthy Vishwanathan / Dominik Stephan

Looking for new analytical indstruments, lab equipment or machniery? Why not buy second hand? Equip Net India, a specialist in used laboratory instruments and production equipment, suggests measures to buyers to make the most of their purchasing deal – In this article, the background to the growing second-user revolution in the pharmaceutical, biotechnology and chemical industries is highlighted.

Second-hand equipment ready to be dispatched, thus avoiding potential delays.
Second-hand equipment ready to be dispatched, thus avoiding potential delays.
(Source: Equip Net India)

Until recently, only cashstrapped start-ups and academic labs purchased second-hand equipment but now, things are different. Businesses of all shapes and sizes, from dynamic university spin-outs and cuttingedge research companies, to multinational, multi-facility giants, are all taking advantage of this equipment as it leads to monetary savings.

Businesses today operate in a financial climate where budgets are tight, yet the need for equipment continues to grow as manufacturers launch new improved models. As a result, a trend has emerged where even the largest corporate businesses are taking the plunge and buying second-hand user equipment, something that they would not have considered even two years ago.

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Why Buy Second Hand?

There are many elements that contribute to this shift towards the need for second-hand equipment in India, including the exponential growth being seen in the market. The ability to save between 50–75 per cent of the new equipment cost is also an attractive factor. Budgets can be stretched further and cash saved for additional purchases.

In addition, second-hand equipment is generally available immediately. The equipment is delivered as soon as a purchase is completed; something that is not always guaranteed when one orders a new system.

The Trends for Used Machinery

Importantly, individual managers, and companies are now thinking differently about surplus and idle equipment and instrumentation. There have always been equipment dealers that buy assets at a lower price and then sell them for a profit.

But with the rise of the internet, and the development of specialists such as Equip Net that possess market knowledge and offer pricing expertise and systems for tracking and redeploying valuable assets, more and more companies are opting to purchase second-user manufacturing or packaging equipment.

Discover,how a Pharma Company Profitted from Used Machinery... on page 2!

A leading multinational pharmaceutical company approached Equip Net India to find a specific piece of processing equipment—a Fitzpatrick Fitzmill. The company immediately required the equipment in order to meet their expanding production requirements.

Since the company had previously approached the manufacturer direct, it was advised to expect a lead time of 8–10 months—a timeline that was simply not workable for their needs. With the assistance of EquipNet’s expertise and extensive machinery listings, they found a pre-owned Fitzpatrick DAS06 Auger Fed Fitzmill that met their technical specifications and operational requirements. Once negotiations were carried out and the purchase was completed, the equipment was immediately shipped to the company.

Second Hand, not Second Best

As a result, the company not only saved money by buying a preowned machine but they also managed to get the equipment in time to fulfil their production requirements. While purchasing a second-hand equipment, there are a number of elements that need to be considered before going ahead with a deal. But, by working with specialists who have knowledge about the instruments and understand its market value, companies can ensure purchasing the right second-user equipment with ease.

Choosing the Right Equipment

In practice, one should research on the exact model of the equipment that he intends to purchase such as its previous use, maintenance and history as this will lead to minimization of risks in the future. Regarding significant or specialist instrumentation, one should always test the equipment before finalising the purchase.

Also, many of the equipment available in the second-hand market will belong to an older generation and hence, extensive market research is a must in order to find the ‘right equipment’ that

truly matches one’s requirements. Apart from this, one should also review the equipment’s past performance. This is a useful exercise for one to know the reputation of an unknown brand, system or even company.

EquipNet’s ‘Value Control Model’
EquipNet’s ‘Value Control Model’
(Source: Equip Net India)

Often, new equipment is also available as successful companies tend to upgrade their equipment on a regular basis. Laboratory failures or acquisitions are other aspects that lead to the availability of this equipment. However, it has to be kept in mind that the investment levels differ depending on how ‘new’ the equipment is. Buyers should plan their budget accordingly.

Also, when discussing the budget, one should focus on the use of the equipment. The decision to purchase an equipment should only be made when it has to be used immediately and not because it can be unavailable later in the secondary user market.

But you have to consider equipment availability and future support... more on page 3!

Assessing Equipment Availability and Future Support

One of the major benefits of purchasing equipment from its previous users is that the equipment is available on an immediate basis; this is not always guaranteed when ordering a new system. It is also important to consider ‘long-term support’ for the machine.

One should check if the warranty of the equipment is transferrable. If not, buyers should approach the original manufacturer and/or after-market service companies to assess how easy it will be for them to get the equipment serviced. Buyers can also make use of the exact model destination, year of manufacture and serial number to check the availability of the equipment’s spare parts.

Know your Source

The most important factor to consider is the creditability of the source. Equipment is generally sold in its current ‘as seen’ condition, with no refunds; therefore, buyers should check the reputation of the supplier in the market.

Often, experts are involved in the entire purchasing process as they are able to provide specialized advice regarding an equipment’s suitability as well as their specific requirements. Lastly, reading the small print in the contract is a crucial part of the purchasing process, for example, the supplier could take a percentage of the sale from the buyer once the deal is complete.

On a concluding note, equipment buyers should follow the guidelines outlined in this article. They should safely navigate through the purchase process while buying second-user equipment and also realise the clear benefits of this approach to their business.

* The author is Managing Director at Equip Net India

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