Used Equipment Dealers - my $0.02

By Action Engineer... on Apr. 03, 2012

There has for quite some time been much dialogue on the subject of equipment brokers and refurbishing of used machinery. I feel compelled to offer my two cents and share my experience on the subject. As you fine people here may or may not know, Action Engineering was heavily involved in used machinery from 1996 till around 2002.

During those years, we were also busy developing our production accessories, that is…pallets, squeegees, and flood bars. It seemed initially like a perfect fit. Because we were able to manufacture all of the pallets, squeegees, and flood bars– we would be able to offer our used machine customer a package price that no one else could touch. We were almost right.

Anyone remember the infamous Bernie Gomer? We wanted to be the Anti-Bernie…

We took out a substantial loan to gear up the necessary space and resources to do it right. We signed a lease on an additional 15K sq. feet and outfitted the space with a new compressor and all the necessary tooling required to really refurbish machinery.

Back in those days – NAFTA was laying waste to the domestic manufacturing of textiles and the large and mid-sized decorating facilities. There was literally an auction every week somewhere in the country. These auctions would typically be the result of either a company moving offshore and leaving the old machinery behind – or also from a mid size company being killed by a larger one that had been offshore for a while already.

So a countless number of trips were made involving planes, trains and automobiles to attend auctions, and negotiate with some of the largest apparel manufacturers in our industry. You can think of the largest – & we helped them sell their machinery during those years.

In every case – we purchased the machinery on speculation and had it shipped back to our shop for refurbishment. I would estimate that we refurbished and shipped 150 to 200 automatic machines – give or take. Automatics (150-200) manuals (100+), dryers (50+), exposure units – flashes –you name it – we bought, brought it home, – fixed it – and sold it with a warrantee.

We really ‘geeked’ out. We would replace almost all switches, most proximity sensors & cylinders, and then used our machining capabilities to remanufacture the custom machined parts as required. All steel parts would be reclaimed and then sent to be zinc plated or powder coated again. And we developed many methods of deep cleaning machinery before repainting them. To summarize – I’m sure that we made an above average effort to develop and support this used equipment business.

Our results were mixed – We did sell the machinery for a premium as compared to some of the other guys…but let me tell you guys something – it was seriously hard work. The time it took to find the machinery, inspect the machinery, negotiate for the machinery, have it shipped here – refurb it – have it shipped there… - it was an enormous undertaking. Then…you have to market the machinery –yada yada yada. I am convinced that it would be easier for us to have made machines from scratch than to do it that way.

We stopped – one of the reasons we stopped was that at the same time we got into it – so did 20 other guys who did nothing but list and ship. No one was willing to pay the price difference between a truly refurbished and rebuilt machine as compared to just a list and ship. Even more important – we didn’t always get a warm fuzzy response from our customers that we expected. That is – no matter how much work was being done – many times we had to deal with complaints that were trivial. The complaints I’m referring to would be things like – a few days late on delivery, scratched paint, little things.

Because we were working to develop our product line of accessories – we felt that there was a bit of a conflict of interest. It appeared to us that there was substantial amount of room for debate on whether a customer was going to be happy or not.

Without beating around the bush further – let me say that most people buy a used machine – for a used price – and expect it to be as good as new and in their hands tomorrow. We found that we could do that with the products that we manufactured, but not used machinery.

After the zillions of hours, the blood, sweat, and years, I’m sure the verdict is out as to whether the venture was truly profitable. I’m inclined to look through my rose colored glasses and say that – ‘we learned so much from it’, but maybe didn’t make actual money doing it.

There are many brokers on this site that we have worked closely with during those years – Winston is the first that comes to mind – but many others are here also. The ones that didn’t perform or acted in an unethical manner are long gone. The ones that you see today – that have done it for decades – and survived – have done so for a reason.

Our industry has always been a very tight knit community and word travels quickly. This reminds me of a story from my very early days. I was fresh off the road from traveling the countryside with Mr. Bill Wainer doing retrofits on Precision Ovals. When I had done many retrofits on my own and was certain I could take on any challenge, we got an order from a company in Ireland to break down a huge belt printer in South Carolina and containerize it for transport to Dublin (Circa 1994).

I’ll save the bulk of the story for another day – but I’ll never forget that deal till the day I die. We blew it bad. Then – it was revealed to me that the customer in Ireland was tied to the IRA. I had 10 calls a day for two weeks and spent $12K+ to correct the issue!!! Every day I got calls and could tell the guy was calling from a pub and was trashed. Every day I heard “ Erik – I’m leaving for the airport and will be there in 7 hours – and I’m going to kill ya!” & yea – I’m sure he was serious. Before we had even resolved the matter, I got calls from South Africa and Australia informing me that they heard of our error from 3 people on their soil.
My point in this is – Everyone knows each other in the equipment biz - It’s Nice to remember the old days – somewhat. It’s Good to know where you been and what mistakes were made. AND - Most importantly – the many gentlemen on this site who have decades invested – and a decent reputation – survived only by being honest – and providing a vital service to our industry.
When you buy used machinery – you can get a fantastic deal – but be realistic with your expectations.

Just my $0.02

Erik Naftal
Action Engineering

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Erik Naftal
Action Engineering, Inc.
Atlanta, GA. U.S.A.
800-228-4668, 770-934-1584
actionengineering.com
sales@actionengineering.com

Submitted by Northland on Tue, 04/03/2012 - 16:25

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Used Equipment Dealers - my $0.02

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