[Joa]

I just got a quote on a used machine from a dealer off a big surplus site and the quote was higher than what the new machine sells for at the IMTS show! Is this normal?

What is the typical "expected" discount off the used equipment dealer's initial list price?

[RICHARD ZASTROW]

In order to find the real "VALUE" of a used machine, I use the same method as I do for a used car. The value is what they sell for at auctions.

There are other costs to the dealer such as transport, storage etc. besides his "mark up". You should be able to get a pretty good idea from that info.

Then there's the question of condition, return policy and such.

Dick Z

[fizzissist]

I just got a quote on a used machine from a dealer off a big surplus site and the quote was higher than what the new machine sells for at the IMTS show! Is this normal?

The poor guy's gotta make a livin'... Ever been to a pawn shop? Retail +10%

[Joa]

Any place to find out how much items sold for at the bigger auctions?

Also, how much do these dealers usually come down?

[fizzissist]

Any place to find out how much items sold for at the bigger auctions?

Also, how much do these dealers usually come down?

Question #1.... You're gonna find yourself comparing apples to oranges without knowing it.

Question #2..... How much snow will Milwaukee have in December?

[wizard]

I just got a quote on a used machine from a dealer off a big surplus site and the quote was higher than what the new machine sells for at the IMTS show! Is this normal?

What do you mean by normal? Will most salesman make as much off you as possible - most certainly. Is that normal, yes I think it is for salesman.

If you aren't in the know there are all sorts of pitfalls to buying machinery both new and used. Depending upon the dealer there is pretty much an assumption that there will be negotiations, so obviously the price starts higher than needed.

What is the typical "expected" discount off the used equipment dealer's initial list price?

If the guy just got divorced, or has a mistress that is expecting or has a kid entering college you might not get much of a discount at all. Other times if business has been good you might get 50% off. However you will never pay less than what the dealer paid for the machine. Sometimes you can gain significant advantage in the negotiations by buying a liquid lunch at a near by bar. Of course each drunk has his own personality, a mean drunk might not offer the deal you are looking for.

By the way I'm not trying to be funny here. There are so many factors at work that you really just don't know what sort of bargain you will get.

Your best bet to get an upper hand is to look towards the online auctions like Dove Bid, GovernmentLiquidations.com and similar organizations that liquidate large amounts of machinery. Often older machinery literally gets sold by the pound. That is look at the going rate for castiron, then the machines weight and multiply the two together. That is the machines value as iron. That is however useless if you are looking to scrap the machine so you need to apply a discount figure. Note that this gives you a bottom end idea on older equipment, obviously newer equipment is judged differently but even then the stuff sells cheap.

By the way I did not mention E-Bay above as that is not where you go to but used or surplus hardware. E-Bay is where the machine tool sellers dump their recently purchased surplus to make big bucks. Sometimes you can find E-Bay bargains but realize that these people are making money on everything they sell. E-Bay isn't a bad place at all but it isn't the beginning of the food chain either.

A funny thing with regards to E-Bay, I was watching an on line auction for some electronics once and almost bid on a lot but didn't want everything in that lot so I skipped. A few weeks later if found that piece I wanted on E-bay, i still got it relatively cheap. Sometimes it is worth going E-Bay simply to let somebody else sort through a couple of tons of scrap.

[wizard]

Any place to find out how much items sold for at the bigger auctions?

It takes time to get a feel for the industry. You need to get signed up with the various liquidation services and follow sales that interest you. But realize auctions are funny things, sometimes the prices explode just because somebody wants something.

Also, how much do these dealers usually come down?

A dealer will seldom sell something for less than he paid for it. However do realize that these guys are running businesses. As such profits aren't just desirable they are required to stay in business. A low volume business at that! So expect to be asked to pay 2 to 3 times what the dealer paid for the machine. Well at least for smaller machines. What you can get discounted from that is a different discussion and frankly there are to many variables.

[underthetire]

What you have to remember with used dealers, they may not even own the equipment. It's not like a used car on the lot. They may be just pedaling another dealers machine. Happens all the time, and every time price goes up.

[wizard]

The poor guy's gotta make a livin'... Ever been to a pawn shop? Retail +10%

There are people running these shops that don't have a clue so sometime bargains can be had. For the most part though total ripoffs. Ten again it never hurts to stop into a pawn or antique store. The last great buy I made in one of those places was a carbide scraper for machine tool ways for around $8. Probably saved myself $40 or more dollars that go around.

[RICHARD ZASTROW]

You can follow the on-line auction bidding on the Internet. Bidspotter is one I follow. The prices on the last day are the ones worth following, most serious bidders are there at that time.

Dick Z

[skullworks]

For the really good deals you have to put alot of your own time into it. How much is your time worth? Are you ready to spend a week at the auction site to pre-inspect the machine, Wait through the bidding period, then deal with loading. BTW these are all CASH, bank transfer, certified letter of credit type purchases - There is no financing, unless you set that up with your bank prior to do an unsecured or line of credit loan. Since the machine is an "as is" purchase, it has no collateral value to the lender.

Most machines are sold "where is, as is" and you must hire a bonded rigger to remove the machine and load it onto your truck or trailer, or arrange for other industrial freight to be there to have the machine loaded.

Then you have to repeat - pay a rigging company to unload, unless you have a suitable forklift and or the other tools required for safe movement of the machine.

In this economy I have seen FADAL's sell for under $2000, but cost $6000 to get them moved.

Due to this factor, on the used market you can often buy a bigger machine for less than the smaller machine because the seller wants to free up warehouse space and larger machines tend to remain in inventory longer before the right buyer shows up.

From a business (buyers) perspective - they look at how much space a machine will take up on the floor and what there monthly cost per square foot is + labor and maintenance costs verses projected value added output of the machine per month.

This is why companies with high labor costs will dump a good big machine to replace it with 2 smaller machines to be run by the same operator, but with faster rapids, spindle speeds, overall cycle times etc. they can get more production per sqr foot per hour.

[wizard]

However do realize that $2000 plus another $6000 for rigging and transfer can be a bargain if it is the right machine.

For the really good deals you have to put alot of your own time into it. How much is your time worth? Are you ready to spend a week at the auction site to pre-inspect the machine, Wait through the bidding period, then deal with loading. BTW these are all CASH, bank transfer, certified letter of credit type purchases - There is no financing, unless you set that up with your bank prior to do an unsecured or line of credit loan. Since the machine is an "as is" purchase, it has no collateral value to the lender.

Most machines are sold "where is, as is" and you must hire a bonded rigger to remove the machine and load it onto your truck or trailer, or arrange for other industrial freight to be there to have the machine loaded.

Then you have to repeat - pay a rigging company to unload, unless you have a suitable forklift and or the other tools required for safe movement of the machine.

More importantly you want to use a rigging company because of the lack of recourse if you damage the machine yourself. At least if the rigging company damages the machine they have insurance to cover some of the value in that machine.

In this economy I have seen FADAL's sell for under $2000, but cost $6000 to get them moved.

Due to this factor, on the used market you can often buy a bigger machine for less than the smaller machine because the seller wants to free up warehouse space and larger machines tend to remain in inventory longer before the right buyer shows up.

Supply and demand is a big issue here. Large machine tools often go for what amounts to scrap metal rates.

From a business (buyers) perspective - they look at how much space a machine will take up on the floor and what there monthly cost per square foot is + labor and maintenance costs verses projected value added output of the machine per month.

This is why companies with high labor costs will dump a good big machine to replace it with 2 smaller machines to be run by the same operator, but with faster rapids, spindle speeds, overall cycle times etc. they can get more production per sqr foot per hour.

Significant value can be had in some of these dumped machines. At least from the perspective of the new owner.

[skullworks]

I was not saying a $2000 price was a bad thing, in fact its a steal.

I was pointing out that some machine brokers who actually stock machines in there own company warehouse have often put in a considerable investment in time, travel and lodging and rigging fees to get that machine on the floor.

Next they sort out what they received and pressure wash, paint, and on some common models replace the windows and maybe the work lights.

What it really comes down to is this, if you want the great deal you have to invest your own time to find the deal, and walk it through till the machine is home and up and running. If your time is more valuable, or you are unable/unwilling to do what it takes, be prepared to pay the person who is willing to do the work.

I mentioned the use of a bonded rigger to load... This is needed if the seller can't provide loading onsite. The one thing you don't want is to be responsible for damages to the facility.

I have seen machines dropped. Forklifts that snagged overhead electrical lines or light fixtures. Bay doors that were torn up when the machine got hung up part way through. Things can turn ugly without warning, and you don't want to be holding the bag.

Using your own truck cuts costs, but increases your responsibility. You must know how to secure the load properly, and that may require having the items bolted to pallets. The last thing you want is a 5000lbs+ object to shift position when you make a corner or hit the breaks.

A bonded rigger isn't required to unload, but if your renting your shop...