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Buying a New Machine  at a Discounted Price?

Keyword: CAUTION

By "Rags" Ragland - Wichita, KS  -The Drive Line

 

Buying a new machine at a "discounted price?" The Keyword is Caution. Equipment Manufacturers have to "move steel," and to do that they sometimes will offer incentive discounts to potential buyers. Sometimes these discounts will take the form of sales, rebates or added accessories thrown in with the purchase of a machine. This is good and it is a legitimate part of doing business however, there are some manufacturers out there that are going make up for giving you a discount someplace else. This is especially true for a "forced discount." This is where the manufacturer is "forced" to give you the discount to secure the business. Some manufacturers will "pad" other items such as accessories and parts to make up for this discount. Sometimes they will offer to "prepay and add" the freight. They get a 65% discount from the freight company and charge you full freight. Then sometimes they will flat cut the quality of the machine.

A couple of examples - We sold a machine to a new customer in Indianapolis almost two years ago. The vendor supplying this machine had been a vendor of ours for years. So when they elected to deliver the machine themselves in lieu of using a common carrier we thought nothing of it. Then our customer received the bill for the delivery charges. They were almost double what a normal common carrier would have charged. Our customer called us wanting to know what the deal was. After we got involved, the customer did not pay those excessive delivery charges and we no longer use that vendor. The point is, many of you, not knowing any differently, would have paid.

Then there is a case of a manufacturer of steel shot blasters that would go head to head in cutting prices to secure the business and keep the other two competitors in town from getting it. Unbeknownst to the customer, there were two classes of blasters at the time, regular duty and heavy duty. They were not equal.

The scenario works this way: A customer would call "manufacturer A" and get a price on a shot blaster, then he called "manufacturer B" and got a price and then "manufacture C" etc. This is fine, but then the customer calls back to "manufacturer A" and says: "Hey, AB Industries is going to let me have their blaster at $7,000.00. Can you do any better?" "Why of course we can Mr. Customer. We can let you have a machine at $6,500.00." At this point that customer is not going to get the same machine quoted initially. That $500.00 is going to be made up somewhere and guess who is going to make it up. That customer who thinks he is "forcing" a sweet deal from the manufacturer is going to get a "regular duty" machine foisted off on him. All kinds of changes can come into play when the manufacturer starts compromising on price. For example, heat treated wear liners are replaced with non heat-treated wear liners, lower grade motors are used in lieu higher grade, and more efficient ones. Sometimes, "used electrical components" are used. Someone is going to pay for that "forced discount" and guess who it is? It's not going to be the manufacturer.

So what should you do? - Do your homework. Get the specifications of the machine you are buying. If there are no published specifications, or in lieu of that get a formal quote with the specifications listed. If the company selling you the machine does not want to do that, then buy from someone else. Know exactly what you are getting. Any deviation from those specifications must be OK'd and preferably in writing. If you have dealt with a manufacturer or supplier before and have had good results then you probably won't have any problems. Remember, you don't buy equipment every day, but the manufacturer sells equipment every day. Unless you have taken the time to research what you are buying and from whom you are buying it from, then that "sweet price" you think you are getting, can end up being pretty bitter. 