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New or Used?

(September 2012) posted on Tue Sep 04, 2012

Mandel looks at the pros and cons of buying new or used printing equipment in his interviews with well-known industry experts.

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By Rick Mandel

Thoughts on used equipment
Because digital is constantly changing, buying used probably puts you two generations behind the latest and greatest. From a service and support viewpoint, if it is your first piece of equipment, used is likely to be a disaster. If you are adding to an existing fleet of presses or replacing a press, adding a used press of the same make and model would seem to be a safer bet.
“Basically, I would frame the decision around a business strategy,” says Bob Travis, owner of Inkworks. “If I am a new entrant to digital printing, expecting to capture new opportunities, I would suggest new equipment. It is difficult to be compelling with second or third generation technology. If the strategy is to convert existing business or expand current digital business, investing in used equipment that matches existing capability, would allow for a seamless implementation at lower cost.”
A monthly nut for the addition of a $250,000 device would be approximately $15,000 (debt service, service contract, one additional employee). This could equate to an additional $300,000 of sales yearly to deal with this expense. Per month, this would equate to 250 sheets of 4 x 8-ft product. For a smaller company, down time could be a scary cash drain, though larger companies could handle the peaks and valleys of such choices.
Chip Basse, president of Albert Basse Associates, directs his thoughts to the client, “Our clients are demanding higher quality than the quality that some of the older machines are capable of, so that is part of our decision making.”
Buying new equipment has many positives, as John Heiser, president of Heiser Sign and Graphic Services, has said. With new equipment, warranty support is usually better. New equipment, the latest technology (and refinements), and reliability follow. Negatively, the price and uncertainties of your return on investment are also part of the buy new decision.
The actual make up of the company and the personality of the ownership plays a large part in the new vs. used choice. Mike Altreuter, VP with Global Imaging, elaborates: “Having sold both new and used digital equipment during the last seven years, I recognize the benefits of both. New buyers tend to be risk averse, they need to have guaranteed service response time, want the latest features to stay ahead of the competition, want a tight relationship with a manufacturer in order to develop niche end products or get unique matched component warranties or the like by working with a manufacturer and partner companies.”
Opportunities for large format, used, digital equipment are vast. The variables rely on the personalities of the decision makers, service, and replacement parts issues, cost, reliability, image technology and more. The perfect circumstance for a used equipment purchase is when it is the second device to be on hand, ready when more capacity is required.
Operators know the good, bad, and ugly already. “I say yes to used equipment as long I have the back-up from the manufacturer and the manufacturer can give you the equipment’s history,” says Ralph Rhein, VP of operations at Duracolor. A detailed history must be provided. OEMs tend not to be in the used market, just as you might see in the automobile world. It is just too risky.
Regarding service scenarios, the consensus is that an internal person should be used to absorb maintenance and/or simple fixes. At Albert Basse, a qualified maintenance technician is on staff to primarily service screen equipment, facilities, etc. The technician is especially good with electronics for testing and controls. With proper training and knowledge, the house technician can gain more knowledge and be key to repairs.
The pre-owned market does have its challenges. According to John Heiser, the marketing of used equipment is difficult because prices are too high. This is usually for equipment that is well used and the owner has recouped the investment and depreciation many times over, yet still expects to recoup a large amount of the original price when selling it. More operations that currently have thought about additional equipment would purchase used equipment if it were reasonably priced.
Mike Altreuter likes the used direction. “I would personally purchase 90% of my digital equipment as used. One reason is that buying a used piece that has been in production generally means the printer has settled in. Most issues that companies face with a new printer happen in the first 30-60 days. A used piece has already gone through that. If you save $50,000 to $150,000 on the purchase price, and there is a possibility of needing to spend $10,000 to $15,000 in repairs, is it a good deal? My answer is a resounding yes, but not everyone sees it that way. The key is for buyers to be honest with themselves.”
Ford Bowers, VP at Miller Zell concurs. “If you are looking to add redundant production presses and want them to have like print quality/productivity, then buying the same machine you purchased last year, even though this time it’s used, is sometimes a better option. You are already familiar with it and can assess its condition better.”


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