2005 Articles
Good as Used
Tips for sourcing preowned electronics assembly and test equipment.
Remarketed assembly and test equipment, available for as little as 30 cents on the dollar compared to new equipment, will often satisfy or exceed the requirements of electronics manufacturers. However, there is more to consider when buying used than a simple desire to pay less. The equipment company one chooses to do business with is equally important. Buyers may question the integrity of brokers and dealers of remarketed assembly/test equipment, but this concern is rarely warranted. The vast majority of used equipment companies conduct their business with a high degree of integrity and honesty. Used equipment buyers should demand the same values and services customers expect when purchasing new.
Business model. When buying from used equipment vendors, check their reputation and references. How long has the company been in business? What is the company’s business model? Does the company have a facility for taking title to equipment, cleaning, refurbishing and servicing? Does the company have your equipment in-house or is it representing another seller? Is the equipment available for inspection? Many OEMs recognize the value of reputable used equipment dealers and have working relationships with them. This relationship can be highly valuable to buyers of used equipment, and buyers should look for those OEMs that support their equipment, no matter the method of acquisition. Good OEM relations also mean that many larger, value-added used equipment dealers offer factory certified training on many lines they sell. A reputable vendor of preowned assembly and test equipment should be able to demonstrate partnerships with customers throughout the OEM and EMS markets; describe an extensive communications network of equipment sellers; and present a highly knowledgeable sales team organized around specific equipment makes. Finally, a vendor’s ability to implement a variety of equipment sourcing strategies indicates strong organizational and financial footing. Such strategies include outright procurement, equipment consignment, end-of-lease programs and asset managed partnerships.
Price and payment. While price and payment terms are negotiable, the used market usually requires full payment in advance, or upon delivery, installation and passing of diagnostics testing. Dealers may offer terms to their best customers, but that is the exception, not the norm. Companies desperate for cash or close to bankruptcy may offer incredible terms just to close a deal. Be wary if you have quotes from three dealers and the terms of one are drastically better than the others. That said, most equipment dealers – new and used – are hungry today, even with the market turnaround. Because price elasticity is highly dependent on market conditions, it does not hurt to ask for favorable terms. The laws of supply and demand are highly visible on the used equipment market. Machine values can literally change overnight, based on demand and availability. This is not because of shady dealers selling used equipment. It is simply due to availability of specific equipment on the open market. This capitalist marketplace can also hurt companies that are not prepared to act quickly. To take advantage of used equipment prices, a company must be ready to initiate a purchase order and payments. In many instances, a company wants to buy, but is slowed by internal bureaucracy regarding paperwork or payment. As a result, the system sells to another buyer who acts more quickly. Such is life for the used equipment buyer.
After-sales support. In addition to making large purchases or consignment agreements, is the vendor sales team authorized to offer warranty and service options? If so, who will perform this service? Are they factory trained and certified? What is the response time? Is phone support available? Value-added resellers will not only service equipment in the field, they will sell spare parts, handle on-site installation and calibration, and provide operator training. In addition, some used equipment dealers permit powered-up inspection and hands-on use prior to final purchase. This benefit gives end-users a live demo plus a forum for software evaluation and repair analysis. What happens if a machine breaks down the day after installation? Customers should check for a buy-back program before purchase. A reputable dealer stands by its transactions. This is further proof of the value of a used equipment dealer network. Many companies may have thought they saved money buying from auctions, only to find out they have not because the model number is slightly different, the equipment has an intermittent problem or the system uses older software. All these things can be caught at a powered-up inspection, not necessarily at an auction where you need to make a quick decision.
Global reach. By staying abreast of global market trends for assembly equipment and user needs, vendors ensure a constant source of used machines. Application of software packages for customer relationship management, customized to the industry, permits close contact with industry activities worldwide – from OEMs and military contractors to contract assemblers. End users should also check the company’s network of international sales representatives and satellite offices. Close proximity to customers permits faster response times and local expertise.
Frank Clark is president and CEO at Lewis and Clark Inc. (lewis-clark.com); fclark@lewis-clark.com.
