I never really sold used equipment until the financial crisis of 2008. When the fenestration industry took a plunge, as a result of the overall economy, there became a plethora of used manufacturing equipment available. Unfortunately, this was the result of many door and window companies closing their doors for good. Either they or their banks were selling off machines at a fraction of the cost for new and, as a result, over the next few years door and window fabricators became conditioned for hunting down bargains. With the industry back to a healthy level, the question is: Why do fabricators continue seeking out used equipment?

The biggest factor obviously is price. Used equipment, which I prefer to call “pre-owned equipment,” can be found for a fraction of what new machinery would cost. Most companies submit a capital equipment budget (CEB) each year and it is difficult to get approval to buy something if you have already spent most of what you budgeted. So, if an important piece of equipment fails going into the busy season, you really need to replace it right away—sometimes on a tight budget. If you have already spent the majority of your CEB for the year, shopping for preowned equipment is an easier sell to upper management. Also, because the ticket price is lower, preowned machinery may be easier to cost justify when performing a payback calculation.

The second biggest factor is immediate availability. I will often get calls for quotes on new equipment, and when I explain that the lead time is six to eight months, the next word I hear is, “What? I cannot wait that long!” And that’s usually followed by, “So, what do you have that’s used?” When you have windows to get out the door, waiting that long is out of the question. Preowned equipment is usually ready to ship right away, so it can satisfy an immediate need.

Which brings me to the third important reason for acquiring used machinery, and that’s: backup. What do you do if your glass cutter or welder goes down and you don’t have a backup? Each day of downtime that goes by costs money in terms of extra man hours and lost sales. At the end of the day, if you cannot get your windows out the door, it may end up costing you a customer, which could mean lost revenue for years to come. So many fabricators will purchase used equipment as backups for their main workhorses. “It is extra insurance against downtime and the resulting insanity that follows,” commented one fabricator.

The last—but not least—advantage of purchasing used machinery includes the tax advantages that one may realize as we head into the last few months of the year. Because of the tax saving benefits the IRS offers with Section 179, for accelerated depreciation, the actual cost of purchasing machinery and having it placed into service before the end of the year is greatly reduced, due to those offsetting benefits. But notice the operative words here are, “placed into service.” The equipment must not only be purchased but placed into service before the end of the tax year in which the deduction is to be taken. So, once again, we have another advantage that results from the fact that preowned equipment is immediately available. Also, up until the most recent tax law passed, only new equipment qualified for the bonus depreciation part of this tax code. Now, the bonus depreciation also includes used equipment.

Don’t get me wrong—new machinery offers many benefits, especially as they relate to automation and software integration. Software integration can significantly impact a business in the long run. Coupled with automated equipment, it also enables the integration of fabrication machinery with order entry, inventory control and synchronization with other fabrication processes within the plant, to streamline the overall manufacturing process, reduce paper trails, improve lead times, increase production efficiency and enhance order accuracy. However, despite all of the advantages for new machinery, do not discount the advantages of preowned machinery. The machinery manufacturers servicing the fenestration industry have built some amazing workhorses over the years, and many of these machines are quite capable of helping us produce thousands upon thousands of windows for many years to come!

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