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10 Questions to Ask When Purchasing Machinery

You can protect your company from getting ‘taken’ by learning about the dealer’s history and key relationships.

The author, Howard Newman, is vice president at Loeb Equipment & Appraisal Co., Chicago. He oversees all day-to-day operations w
The author, Howard Newman, is vice president at Loeb Equipment & Appraisal Co., Chicago. He oversees all day-to-day operations w

Many people have heard horror stories about companies purchasing used machinery from an unreliable source and paying dearly for it.

In one recent example, a company purchased a machine without having viewed it first. It agreed to pay half the cost up front and the remaining half upon delivery. The customer issued a purchase order, submitted initial payment, and began to arrange the transportation for the machine when it learned that the individual it purchased the machine from had gone out of business and filed for personal bankruptcy.

What’s worse, this company discovered that the machine had been sold almost a year before it even expressed interest in it.

Admittedly, most problems that can arise when dealing with brokers, small shops, or finders are not this drastic. However, the question of how to protect yourself from any type of complication, large or small, when purchasing used machinery still needs to be addressed.

Here are some questions a contract packaging company can ask to ensure that it is dealing with a reputable used-machinery company and to help avoid some foreseeable problems:

1. Has the dealer sold machinery under different names in the past? This issue is a big warning flag. Some brokers are working under their fourth, fifth, and even sixth company names.

2. Is the dealer willing to provide references and contact information? This should be a standard rule of thumb for any salesperson. It is important to check references.

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