When buying a CNC Machine you got two options; go safe and buy new, or go cost effective and buy used. But are used machines worth the risk?
Video Transcript:
“Buying a new CNC machine is tough, but buying a used CNC machine? Oh my God, that’s a whole different world.
[Mike has an anxiety attack while Trevor tries to calmly buy a used machine online.]
Now after that emotional roller coaster ride. We’ve won. It’s over, and we won the auction. We now have a used machine inside our facility. I’m going to tell you what we went through, and the process it took to actually buy a machine off an auction site.
Historically we’ve always stuck to buying brand new CNC machines. You always know what you’re going to get. They come with a warranty. The machine manufacturers come in and do the installation for you. They do on-site training. Everything’s cut and dry. You minimize as much risk as possible by doing that, but it comes with a price.
We had a situation where we wanted a machine that was identical to the machines that we already had. In this case, it was a [Citizen] A32 [swiss lathe]. The problem was is this model was discontinued. They no longer manufactured it. We still wanted one because they’ve been ideal for our business. They’re a core competent machine. We like what they offer us. With that being said, we took to the Internet to see what we could find and see what’s for sale out there on the web. While scouring, we found there’s lots of auction sites. There’s lots of places that you can find equipment for sale. I came across an auction website with a machine for sale, and started reading through all the different sexy features that this machine had. It was exactly what we were looking for. It happens to be this machine sitting right behind me.
So we had to do our homework, and the first step was to physically go look at the machine. We went over the other side of the state. We did our full inspection, checked everything we could. We checked to make sure everything was functioning/working the way they said that it was;. Checked for wear, and other premature issues that may become problems later on. The machine looked legit. The best we could tell. We weren’t allowed to physically make a part on the machine. The shop was closed. All we could really do is move the machine around and throw some indicators in it.
Next was to get ready for the actual auction. We had a couple weeks, so I spent some time actually putting together a fair market evaluation. I went on the Internet and looked at other machines that were at similar age, what they were selling for, what they had sold for, and I put a value for the machine, as well as everything that came with the machine. In this case, I used a handy dandy little Excel spreadsheet. I put all those costs together, and I said okay what would be our max bid that we would want to bid on this machine once the auction goes live? One thing to keep and watch for is what the buyer’s premium is going to be. These auctioneers are going to charge you a percentage for buying this machine. In this case it was 18%, so I had to factor what that was going to be into the overall cost of my bid to make sure I wasn’t paying too much for the machine and waited. We waited for that auction, and when that auction went live, you saw what Mike was doing behind me. [He was] pacing, but I had my boundary set. I knew what my max bid was going to be, and I wasn’t going to go a bid over it.
So one of the things that we were kind of watching for/were concerned with when we were looking for a machine is: how the heck are we gonna get it here? A couple of [factors] that helped with that. One: I didn’t really shop for anything that was on the other side of the country, which you can. They’re all over the world. I tried to find something that was 4-6 hours away. Something that we could drive to and from. We can inspect ourselves, and then it wasn’t going to cost me a fortune in trucking to get it brought over.
The last item was: how do I get it out of the facility that I’m buying it from? In this case, they had a mandatory fee that I had to pay of $1000 to have their rigger physically move it out of that facility onto a semitruck. I had to coordinate a semitruck to get to that facility within a certain date for them to come in and load that machine, but I also had to prepare that machine for them to be able to pick it off the ground. It still had electricals hooked to it. Still had air hooked to it. All the tanks were still there. So we had to go in ahead of time and get the machine prepped. Get our axes supported. Get everything structurally sound for their riggers come in and pluck it and place it. So with that being said, I had to set up a trucker, an LTL trucker from their destination to ours. I had to work with their riggers to get it off their floor onto that semi, and then I had to work on getting off that semi once it got here into our facility. All things that I had to put into consideration when we were going through this whole process. Something to keep in mind if you ever go down this road.
As soon as the machine got brought in/got put in place, we immediately started stripping it down to do our full inspection. Catching all the maintenance up on, make sure there’s no glaring issues or anything. So far what we see is we got a solid deal. We got a good deal, but for anybody that’s out there looking to do this you have to be super careful because there’s a lot of other costs, inefficiencies, time, and expenses that are going to be hitting you at the bottom line. They’ll take your good deal or your solid deal, and make it just someone else’s good deal. So do your homework. Make sure the machine’s in good shape. Go physically and put your hands on that machine. Do your inspection. Make sure you understand what the rigging requirements are going to be when getting it out of the other facility and into your facility. Understand what you need to do to this machine once it hits your floor to make sure everything’s good. As soon as that auction is done, they’re going to want their money and they’re going to want that machine out of their space. It’s done. It’s yours forever until you do something else with it, and it’s got to move.
All in all, don’t be scared of the used market, but do your homework and do your research before you go out and just buy something. For more tips and tricks, check out our YouTube page.”