Knowing Your Dealer Reduces Risk When Your Purchase Machinery
Purchasing machinery and equipment is one of the biggest capital expenditures you’ll make in the course of running your business. Significant capital expenditures are always accompanied by risk, and equipment purchases expose you not only to financial risk, but operational risk and risk to the ability to successfully compete in your market. Choose the right equipment though, and you’ll be able to increase your productivity, enhance product quality, improve your production processes and boost your bottom line. What can you do to ensure that you’re making the best choices for your business and getting the best deal?
Once you’ve completed your capital budgeting, a cost-benefit analysis and an assessment of your technical needs, you face what is likely the most important decision of all in the purchasing process—from whom to buy the equipment. There are a lot of machinery brokers out there, and every one of them is eager to make a sale. But how do you know who to trust?
When you’re considering an equipment purchase, take the time to thoroughly research the dealer. Conduct a Google search and look at online reviews to get a handle on the dealer’s reputation. One of the best credentials you can look for is membership in the Machine Dealers National Association. The organization was found to, among other things, promote a high level of business and ethical standards. When you deal with an MDNA member, you can be confident that your dealer will be interested in more than just closing the deal. MDNA members are committed to knowing their product, understanding their customers’ needs and getting them the best machinery at the best price.
Another key qualification is certification by the Association of Machinery and Equipment Appraisers (AMEA), which is a nonprofit professional association for appraisers that promotes standards of professional practice and ethical conduct. You can feel confident that a dealer with this certification will not only conduct business ethically but will offer a high level of expertise in assessing the value of equipment and helping customers make the best choices.
In addition to professional qualifications, pay careful attention to how the dealer interacts with you. Does he or she know the equipment and answer all of your questions thoroughly? Are questions answered in writing, and are all terms offered in writing, including return policies, warranties, and support options?
A reputable dealer will also give you an opportunity to see a machine under power, provided that physical circumstances allow such a demonstration (and if they don’t, the equipment should come with a money-back guarantee in the case of failure upon delivery). A professional, full service dealer should also offer assistance in securing rigging and hauling. MDNA members have a list of preferred vendors who have been recommended by fellow industry experts. The key to success is identifying a dealer who works to create added value for your machinery purchase and is looking for a long-term relationship rather than a quick sale.
When you choose to purchase equipment from an end-user, you take a lot of risk. These sellers are looking to make a quick deal and have no incentive to be truthful in their dealings. There’s no warranty, no return policy, and the price may be unrealistic given that the seller has no professional skill in appraisal. Such a seller is also unlikely to answer questions in writing and may even be hesitant to offer a receipt for the sale. Remember too, that if the seller doesn’t report the sale the IRS you could run into trouble when you file taxes and report the purchase.
When it comes to making an investment in equipment, you’ll always best protect your interests by working with a reputable MDNA member and AMEA certified appraiser. There are plenty of dealers in the market who are great salespeople and know how to close a deal. But falling for a slick sales pitch and a bargain-basement price virtually guarantees a trip down the rabbit hole. When you know you’re working with ethical, knowledgeable professionals, you can be confident that your business will benefit both today and over the long run.