SUMMER 2019

190
THE DISTRIBUTOR’S LINK
ROBERT FOOTLIK HOW TO BUY SMART ON USED WAREHOUSE EQUIPMENT from page 150
Check Around For The Best Buys
To check the availability of used equipment, watch
the want ads, Internet and auction notices, or “put out
the word.” Sometimes your vendors and reps tell you
what’s available at their facilities. Alternatively alert your
sales force to watch for bargains as they travel.
The price of used equipment is highly negotiable
and very sensitive to supply and demand. A company
that desperately needs to raise cash may offer a very
reasonable deal; or trade the equipment for what they
owe you.
Even at an auction, after you have “lost” the
equipment to another bidder, you still may be able to get
it at an excellent price. Ask the successful bidder if he’s
willing to take a quick $500 to avoid trans shipping and
dismantling what he’s purchased. For a true professional,
a quick profit from a customer at hand means a lot
more than an uncertain risk. If you absolutely, positively
“must have this and only this equipment,” don’t bother
negotiating. You have overpaid before you start. Always
be prepared to walk away.
Avoid Paying In A Lump Sum
An acceptable arrangement is prepaying 50%, with
the remainder on delivery and final inspection. Other
arrangements can be negotiated. In any case, it’s
important that the purchase agreement specify precisely
who will dismantle, crate and ship the items, as well
as who will pay the freight, and when. A potentially
huge problem can bite you if anything happens to the
materials in transit. Know the shipping terms and insure
or negotiate accordingly. Liability in transit is a subtle
and often misunderstood concept there are many ways
to cover your potential loss that should not be ignored.
If you are buying from a reputable dealer, rent or
lease the item, with 100% of the rental applicable to
purchase during the first 60 days. This procedure is
very common with forklift trucks. If the truck turns out
to be unsatisfactory, only a month’s rental, plus any
shipping and handling expense has been lost, not the full
purchase price.
Communicate With Your Personnel
Don’t just have the “stuff” show up. One Distributor
bought hundreds of plastic shelf bins for less than $.30
each. These were placed in service and really looked
great; until they went to take a year end inventory.
Without training and communication the warehouse staff
emptied all the full cases into the new storage units,
thereby eliminating box quantity counts. What once took
only a few hours to count now requires days to audit.
Investigate Your Local Codes And Conditions
Local building codes, national standards and fire
protection considerations may turn your bargain into a
real economic disaster. Purchasing high pallet racking
for a low ceiling building is an obvious problem, but
trying to use high rack in a tall building can be even more
problematic if the sprinkler system isn’t designed for this
occupancy. What will you do with the materials if a Fire
Marshall or Inspector condemns storing above 12 feet in
a 30 foot high building? More than one Distributor has
had to scramble to find rental space on an emergency
basis.
Similarly, new storage equipment is designed around
specific seismic conditions. In recognition of this many
municipalities now require a building permit for erecting
pallet racks and shelving…based on a licensed Civil
Engineer’s inspection, analysis and approval. This can
add thousands of dollars in hidden costs, along with
months of negotiations with building inspectors. Even
worse, taking out a permit can open up the proverbial
can of worms over “Grandfathered” conditions. You
want to install some shelving, but the town won’t let
you until all the washrooms are handicapped compliant
regardless of the feasibility or expense.
Now Go Bargain Hunting
If you are looking to upgrade your operation
economically, used equipment may, indeed, be your
best option. An Ohio wholesaler paid $2,400 for
racking worth at least ten times that amount. A Texas
distributor purchased a one year old lift truck, adequate
for his needs, for only $4,300 versus $26,000 for a new
vehicle. The success stories go on and on.
If you are buying used warehouse equipment think
it over carefully, investigate all the conditions of the
sale, usage and context before signing the check. This
is cheap “insurance” that your purchase will save you
money initially and for the long term.
ROBERT FOOTLIK