Friday, October 28, 2011

Is it time for the scrap yard?

should this one skip life support?
Trade in or recycle?

Every day, when we are discussing new or reconditioned equipment with our customers, there are possible trade in conversations.  Similar to purchasing a new car, what do you do with the old one.  Dryers are usually the topic of conversation because the maintenance costs are too high or the current unit is too small for the production required.  Many times we are able to take the old unit as a trade for the new.  Some money is given for the trade and we rework the unit and offer it as reconditioned.  This makes the most sense.  Most of the time.

But when is that not the best answer?

Within the last 2 weeks we have acquired, or offer to take, some very large electric conveyor ovens.  We now have in our possession 48" x 20' machines that will need rework and we will put on the market.  (if you have any interest, please call.)  Unlike small ovens, the large ones have a very limited market and a much higher rebuilt cost.  The freight on these will usually eat up our profits on the deal.  

Four automatic presses, the problem is similar.  High freight costs, large repair bill, and, for some, a technician bill for installation.  

What factors to consider?

So, when you are moving into a new piece what are your options with the old one?

  1. You can list it on CraigsList or some other classified forum.  You will get some money from a local person.  They may be a competitor but now the used machine is their problem.  Don't expect a lot of cash but it will be cash.
  2. You can trade it toward the new machine.  If the vendor is willing, there may be trade in value.  Keep in mind that it will be 1/2 the value of what they will resell it for.  But they have to work on it and market it.  You will have to help to remove it and package it for shipping.
  3. You can call the scrap yard.   I know this sounds like a cop-out but it really is not.  Keep in mind that the depreciation is long since over for this unit.  The maintenance costs are higher than the machine value and your time is better spent selling your product than worrying about some used steel.
Scrap yard time.

So as a note to some long time customers of mine...  I know that you have museum pieces that we sold to you a generation ago.  But it is time to retire the old piece and be happy with the new one.  I will give you the bad news as to when to pull the plug.  Just please do not be offended.