Buying Used Manufacturing Equipment at Auction
I started Midwest Label Supply with one machine purchased at auction. I share this story not to scare anyone but just to help you mentally prepare.
The journey started innocently. I saw an 18 month old digital printing machine listed for $5K. I reached out to the equipment manufacturer and found out a new one was $200K. Wow, quite the discount, I'm interested to learn more.
My Check List
I had thought about buying a machine before and had a small checklist
- Must not need complicated tooling on a per project basis
- Must cater to online purchasing. I am pretty good with websites. I can sell online. I am not a heavy hander sales person. The ideal customer is one who can take the purchase mostly online and make a decision without needing too much hand holding.
- Must be able to run semi-autonomously. If I need to press a button every minute, no dice. I want to building web content and selling while the machine is operating itself
- Needs to be CNC digital. I'm not an engineer by trade but I understand computers. I should be able to trouble shoot minor issues and have a good understanding of product production. I will be running the machine myself from the beginning.
- Other things I liked were that it was a new machine design. The machine was 18 months old and was lauched about 30 months prior.
The machine fullfilled my requirements.
It turns out there were 3 machines. The final day of bidding started out around $20K each. The reserve, unbeknownst to bidders was $60K. Which is what I ended up "winning" with.
Winning the auction is where the story starts....
I'm going to break down total auction + moving + installation costs real quick and I will try to finish this story another time.
- Auction $60K
- Auction tax 15% ~ $10K
- Rigging ~ $3k
- Shipping 11 hours ~ $3K
- Customs Agent to get machine into the US from Canada $1K
- Reciving Shipment (I don't have a forklift) ~ $1K
- Installation + Deinstallation + Training + Service from equipment manufacturer ~ $30K
All in, I'm at $110K. I still consider this a "deal" compared to $200K but time will tell. I got pulled into the aution by the initial $5K price tag and ended up at 20 times thaat.----------
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