In my past blogs I have discussed cost patterns in terms of buying new vs used vs renting. With the recent stall to the Chinese economy, we’re finding a unique situation where manufacturers are starting to lower their prices for new equipment in an attempt to jump start their sales. We’ve come across this situation a few times during our recent tendering for equipment. During the past 6 months we have found that the price for new equipment is equivalent to 5 year old equipment which was bought during the height of the economy in 2008 -2009.
This raises a variety of issues moving forward in the coming years as the economy starts to regain momentum and get back on its feet. We will start to see a drastic boost to sales for manufacturers; however we will see a struggle for companies who are banking on selling off equipment once projects have been completed and/or need to sell their equipment in order to gain back some cash. This specifically impacts those businesses that have not had any substantial growth over the past few years.
What the used market will be competing against for the next couple of years will be the new machines at comparable prices, warranties given by manufacturers on their new machines, and also the assurance to customers that they are getting a quality product by dealing directly with the manufacturer.
Where I believe the used market will find traction over the coming years will be to offer more than just a buying and selling service to their customers. Therefore it’s important to assure customers that once a sale is done it is only the beginning of a business relationship. At Van Doorn TCC, we offer a cradle to grave service which not only includes the buying and selling of equipment but also consulting, maintenance and repair, and also fleet management. We work hard to become true partners with our clients so we take on many of the logistics while our partners focus on running their business.
If your company currently has a surplus of used machines that are not generating an income for your company then contact us and we will make sure that those machines are working for you and creating an income rather than draining your bottom line.
For more conversation and tips on how you can save money and increase efficiency on your projects join us on Twitter: @VandDoornTCC