We often think that it is better to buy cheaper equipment, making comments such as ‘the job is simple to run’, or ‘it doesn’t require all the bells & whistles’ to justify our decision. In my experience this doesn’t stack up and the costlier brands are often less expensive in the long run.
A few years ago, when I was supplying a brand of reputable Italian machinery, a customer, who had previously bought from both ourselves and a ‘cost driven’ competitor decided he needed to replace some of his older equipment.
The two machines he was replacing were a 12-year old injection molding machine bought from us and a similar sized 10-year-old machine from our competitor. When we followed up on our quote, the customer said we weren’t looking good, as our price was about 25% more than the competitor. We tried our best to put up an argument, but they said the competitor’s machine had been fairly reliable and they couldn’t justify the price difference.
The customer then asked us if we would consider taking the old machine in part exchange, so we approached an established used machine dealer. He offered us $35,000, which we then included in our proposal as a part exchange value.
To our surprise the order just arrived!
We thanked the customer, but felt obliged to ask him why he had made the decision. It turned out they had asked the same dealer to give them a part-ex on our competitor’s machine and they couldn’t give them anything for it. The result was that the net cost between the two machines was now very similar, and the advantage of better reliability, readily available spares and superior local support made the decision easy. He also said that due to potential resale values, his finance company was uncomfortable offering an equipment finance agreement on the competitors machine.
I realize that many companies are forced to think short term, but clearly residual values should be considered when determining the true cost of the investment.
Here at PlastikCity we only partner suppliers of high quality equipment, usually North American, European or Japanese brands. This is because our site recommends these suppliers and it’s important to our reputation that visitors can be confident they will be choosing from the industry’s best. Cost driven products are therefore excluded from our lineup.
If you provide excellent quality equipment and have a reputable North American based support service, we’d like to promote your company. We cover all products from consumables through to prime processing equipment and provide the best route to market in our field.
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