Four Considerations When Selling Your Machine

four considerations when selling your machine

Selling a machine from your floor can be an emotional decision (sometimes) and other times it is a no brainer. However, the process of getting the machine out of there, and the reasons for doing so are varied and seldom thought through. Are you trading in? Do you require new technology? Is floor space more important to your shop than the functionality of the existing machine?

To save yourself some frustration, I thought it would be a good idea to share four points for you and your team to discuss as you begin down the road of selling your machine.

  1. What is the timing?
    1. The most important discussion that is rarely had prior to deciding to sell is this: when does the transaction need to finalize.
      1. This is what I mean:
        1. Are you selling for floor space? Great – when do you need the floor space?
        2. Are you selling to upgrade? Great – when does the replacement machine come in?
        3. Does it need to sell before or after a certain tax deadline? Great – what is the countdown to all of these deadlines?
        4. Also – Determine if you have a job running on the machine you intend to sell and when it is really available.
      2. THE ABOVE INFORMATION WILL GUIDE US AS WE ADVISE YOU REGARDING HOW TO ACCOMPLISH YOUR GOALS. Depending on your answers to the above, it will suggest the below plans of action:
        1. Is there the luxury of time and space to sell the machine from your shop floor? This is ideal. It allows the highest return on investment, allows the buyer to see the machine in its natural habitat, and keeps all costs down. We are very comfortable and efficient in contract selling from customers’ floors.
        2. Does the machine need to be sold and removed on a strict schedule?   We have a solution for that: A stock purchase for our inventory. We do not insist on this option, but we hold it out as a viable choice.
          1. Keep in mind that we work with New Machinery Dealers on a daily basis and are happy to transact any sales through their company as a “Trade-in” if this helps your process or saves you tax money.
  2. What is the availability?
    1. As the last item above addressed, determining WHEN a machine can leave the shop is as critical as determining the sale price. – Both issues affect the way a machine is promoted, the amount you can expect to receive for a machine, and the type of buyer your machine will attract.
    2. Here is what I mean:
      1. If your Haas VF4SS is available immediately, with no strings attached, this will attract the buyer who is (potentially) willing to pay a slight premium for the benefit of getting it in their shop now instead of waiting 6 weeks for delivery of a new one.
      2. If your Haas VF4SS cannot leave until a particular job is finished, or until your replacement machine arrives, then a different buyer will take interest. But chances are, they will likely pay less for the right to own your machine in the future. I call them the “compromise buyer.” They are willing to experience the pain of delay as long as they are comforted by the salve of saving money. This is common sense, but not always appreciated. If you’re getting something (the convenience of selling your machine without having to give it up quite yet) then be prepared to give something (a slightly lower NET sale price to grease the wheels of the deal).
  3. What is included?
    1. If it is the last Citizen L-IX-20 you have and the tooling cannot be used on your Toshiba VTL, please consider including all optional tooling in the tool cabinet next to the machine. This may not increase the sale price, but it will enhance the likelihood of a sale. Just something to think about.
    2. OR.. if you know you have 5 other Citizen Swiss machines and will not include the Thread Whirling unit with the sale of the machine, please decide that now and tell your representative this same information. It prevents headaches and arguments at the point of sale and shipment. If tools are in the picture when promoted, buyers may assume the vice, the rotab or the special tool is automatically included. Let’s head that issue off at the pass and decide up front what is included. It helps you and everyone.
  4. What is most important?
    1. In our company we talk about getting to the Core. That means, what is really important. A few years back our company had the privilege of touring the “Castle.” Regardless of your NFL allegiance, touring the training facility of any NFL team is a rare opportunity and we were able to tour the Ravens’ training facility, called “The Castle.” One of the many things that impressed me were the signs and constant reminders around the players all through the review rooms and hallways. But my favorite was this one:When I inquired of our host, Harry Swain, the meaning he explained that it stood for: What’s Important Now? I like that. We ask that of ourselves and our customers daily. What is the truly important thing we are really trying to achieve? Here’s what I mean?
      1. Is the most important objective freeing up floor space? –if it is, make that the goal and know that the goal may affect NET price to you to accomplish it. A little less in the pocket may accelerate the sale rate and get the thing you really want – floor space.
      2. Is the goal all about the money? If you need to get money to pay down debt, or keep an employee, or to allow for that next purchase, that is perfectly acceptable. But please embrace the likelihood that holding out for top dollar reduces the percentage of active buyers to a very small portion of the world. Can you accept those consequences? Can you wait for the magical buyer with the right market pressures on him or her to finally arrive and pay your price? If you can wait, so can we. And the magical buyer may very well show up. We just cannot overpromise on how quickly it will move.
      3. Is the goal a seamless transition during the install of a new machine? This goal usually dictates that the deal be handled as a “Stock purchase” and we are happy to treat it as one.
        1. Sometimes, if we have enough landing pad on the deck, we can work under a “Broker/Buy” contract. This allows us time (if available) to attempt to broker the machine from your floor (for a higher return), but if push comes to shove, we will purchase for inventory at a reduced rate to make the transition occur.
        2. The other option in this scenario is a straight out inventory purchase. If chosen, we would then initiate our stock buy process:
          1. trade paperwork
          2. perform the lien search
          3. inspect the machine
          4. pay prior to removal.

Sorry if I got a bit into the weeds, and I’m certain there are many more considerations to address when taking a machine to market, but I believe the top four items are the biggies and will point you and your team in the right direction. As always, my team and I enjoy being of service and would be happy to walk through the process in more detail.

Keep makin’ chips,

Troy Clark

President, Clark Machinery Sales

5/15/17

Carina Alvarez

Author Carina Alvarez

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