How To Buy Used Machinery ?

Buying Mantra - "When you go to buy, use your eyes, not your ears."

Competition for used machinery can be tough and finding quality machinery at good prices can be difficult. Industrial equipment, even on the secondary market, is a significant investment. The more you know about the type, use and manufacturer of the equipment you need, the more successful you will be at getting what you want. Approach buying used machinery with the same thoroughness and decision-making processes you would use to buy new equipment.

Before buying for used machinery make sure you create a technical design specification outlining items such as:

  • A budget that details the used machinery cost and the expected payback on your investment
  • The exact model and type of equipment you want to purchase
  • How the new equipment will integrate with existing equipment or other machinery to be purchased
  • Where the new equipment will be housed and how it will be laid-out
  • Necessary infrastructure upgrades that will be needed to run the equipment efficiently
  • Safety equipment your personnel operating the equipment might need
  • Know all the important parameters of how new machinery will work in your manufacturing environment before you approach a retailer or broker.
Check It Out In Person

No matter what a seller promises, no matter what the pictures look like, no matter how many maintenance documents they show you, go look at any prospective used machinery purchases you plan to make. Buying without first examining can be a huge mistake. The largest percentage of used machinery is not warranted and is non-returnable. If your company cannot afford to buy a brand new sheet metal fabricator, then it more than likely cannot afford to write off as a loss one that doesn't work as advertised. Go to the site where the used machinery is located and see it work.

The used machinery business is highly global in nature. Qualified, experienced brokers can play a significant role in helping you find the used machinery you need. Brokers are in the business of selling goods for others in exchange for a commission. Dealers buy used equipment from various sources, refurbish it if necessary, then place it up for sale. However, dealer selection can be limited to the stock they have on hand.

1. In Buying Used Machine
The followings are guideline for less-experienced buyers/sellers of used machinery.
1. Contact directly the owner (or intermediary agent) via e-mail, fax, telephone, etc. and obtain detailed information of the price, specification, photos, actual state and past record of use.
2. If you decide that the machine is the best desired one, then request to perform the inspection.
3. Points to be Remarked
1) Check of name plate : Confirm if the specification on the name plate conforms to the data surveyed in advance
2) Visual examination : If the machine has been painted and looks good, you must not be satisfied with the appearance but must check for flaws, tear and wear, rust, applied oil, etc. If the machine has not been repainted and does not look good, that gives you the chance to inspect the machine as it is and reduce the risk of misjudgment.
3) State of maintenance : Ask if maintenance has been performed since the time of purchase. If any, ask the detail of maintenance. If not, ask whether the machine does not show serious problem for future operation.
4) Test run : Request a test run of the machine. If the owner refuses to make a test run, ask the owner for the reason.
Inspection Items in Test Run
a) Check unusual noise.
b) Check smooth function of the machine.
c) Check unusual vibration.
d) Check whether the machine can be operated by operating switch.
5) Check of accessories : Confirm the content of the accessories (spare parts, tools, cover, etc.).
6) Check of documents : Availability of the instruction manual, catalogs, specification, drawings, etc.
7) Negotiation : If you judge, based on the result of inspection, that there is no problem in the machine, negotiate for price reductions without showing any sign that you want to buy it. This is the best timing for negotiation, otherwise, the potentiality of successful by will be lowered.
4. Request for a issuance of formal quotation. Confirm the terms of delivery (free on seller's site, free on truck, free on truck at delivery point, free on delivery point, etc.).
5. Issue the order sheet. Specify the name of ordered machine, machine serial number, scope of order, condition of order, delivery terms, delivery time, breakdown of the amount, etc.
6. The bill or invoice will be sent to you by the seller.
7. Pay the contracted amount to the designated account.
8. Receipt of machine.
2. Other Points in Selling and Buying Used Machinery
Other Common Troubles
1. Buyer's Responsibility
Any claims on the defects will not accepted by the seller subject to the buyer's final inspection. Thus the buyer will resume all responsibility on performance related claims, and the machine will be delivered without warranty. Do not pay unless you can perform the inspection. Neglect any statement from the seller to prompt you faster buying by saying "Machine will go out of stock unless you pay now". Take extra care when the seller presses you for a prompt contract.
2. Advance Payment System
Generally the used machine market is a seller's market where sellers stand on stronger position than the buyer. Therefore, it is a principle to pay full price before delivery of machinery. Negotiations will fail when you offer the condition to pay for machine after delivery and careful inspection.
3. Deposit System
Generally, the full amount of contracted price is to be paid at the time of contract and the machine is picked up within a week.

However, a longer period may be needed from contract to delivery by some reason. In such cases, a common practice is to pay 10% deposit at the time of contract and settle the balance by one day prior to the acceptance of machine. The guaranteed period covers for about one month. For longer period, a warehousing fee may be charged. You should make sure the delivery date and, if necessary, you need to sign a contract for storage.
4. Double Repayment System
If the buyer cancels a contract for some reason after he paid the deposit, the deposit is forfeited. But on the other hand, if the seller rejects the sale, it is a common practice for the seller to refund the deposit and pay a compensation of same amount as the deposit.
1) As often happens, some buyers acquire ownership of machinery by paying a deposit but do not accept it for a long time while they are trying to resell it. Such a malicious practice is often the case with the buyers who have not own storage site or with in-line machinery which requires a large amount of expenses for dismantling. A preventive action for this case is to clearly specify the date of acceptance and warehousing fee in the event of delay upon the conclusion of a contract.
2) There are some out-law sellers who introduce a low-priced machine that does not exist and do not perform delivery after receipt of payment. If you request the inspection of machine, they will use, in an effort to discourage you, some pretext or another by saying "another buyer will buy it unless you pay now" or "the machine is stored at a distant place". A countermeasure against such tactics is to discuss business with a reliable dealer and not to pay the money if you cannot inspect the machine.
3) When negotiating with foreign buyer customers, they may request the issue of invitation letter for visa to enter your country. It is often the case that they cut off communications after they receive invitation letters and use them to enter your country illegally. In the case of negotiation with first-time buyers on the Internet, the issuance of invitation letter should be avoided. If you think that those customer may request specifically on the invitiation letter without making any business talk, this must be typical sign of the suspicious buyer.