When there is a need to replace or add new equipment, most small business owners typically focus on buying a brand-new machine. However, in addition to financing or budget constraints, there are a few other reasons to consider purchasing used equipment, especially through an online auction.
Read below and learn some of the benefits of buying used equipment through an online auction.
1. Saving Money
New equipment is a capital investment that may substantially affect a small business’ cash flow. However, online auctions offer high-quality pre-owned equipment at a much more reasonable cost. In some instances, it’s possible to save thousands by buying used industrial equipment from the current auction inventory. Not only do buyers pay lesser sales tax, but they can also use their cash for other purposes or would not need to seek expensive loans to finance their capital expenses.
If you are into a small delivery business using trucks, it would not be wise to buy a brand new vehicle. Your best viable option is to buy a used truck. The same principle applies to equipment too.
2. Finding the Right Features
Many business owners believe they can only find the features they’re looking for in new equipment. However, technology moves faster in some fields than in others, and in most cases, pre-owned equipment has all the features an owner needs at a lower price. Additionally, some of the new equipment may come with a technology which may be too complicated for the small business owners.
3. Getting the Equipment Sooner
Buying new equipment typically means putting in an order and waiting for delivery. Though there are benefits, there are drawbacks as well. When they’re looking for new equipment, business owners should determine the importance of delivery speed. Used equipment is ready to go, and once it’s been purchased at auction, it’s easy to make arrangements for a speedy delivery.
4. A Lower Cost of Ownership
Because used equipment holds much of its value, it’s easy to buy it for a one-off job and then sell it to recoup part of the cost. In the meantime, it’s possible to deduct expenses such as financing interest, amortization, insurance, and maintenance on the company’s tax return. Though the equipment is a business expense, it will partially pay for itself in terms of increased revenue and the ability to take on more work.
5. Increased Flexibility
Because it’s so easy and cost-effective to buy used equipment at an online auction, some small business owners may be able to bid on jobs they’d otherwise not get. Purchasing equipment is part of the cost of taking on specialized jobs, and when a contract expires, the owner has the option to keep or sell what they’ve purchased.
6. Lower Cost of Insurance
It usually costs less to insure used equipment than it does to cover something new. Insurers usually base premiums on the cost to replace a piece of equipment, not it’s resale value. When buying used units, coverage costs less because the replacement cost is lower.
7. Warranty Coverage
Some sellers offer warranties to give buyers additional peace of mind. Every seller is different, and business owners should do their research before buying equipment at auction. A warranty can range from “as-is” to 60 days, which is enough time for an owner to test the equipment and ensure that it will perform as expected.
Managing your small business expenses means only one thing: more profit for you. Auctions can help you control expenses and increase profits. Used business equipment offers all the utility and versatility found in new units at a fraction of the cost. Whether they’re in the packaging, chemical, cosmetics, food and beverage, or plastics industry, small business owners can benefit from buying used equipment at online auctions.