New Equipment Vs Used Warehouse Equipment

Managing a warehouse means dealing with a lot of moving parts — both literally and figuratively. You need to move product around as quickly as you can, and you must consider many factors to keep your site as efficient as possible.

One major area that can make or break your warehouse routine is the equipment you use. If your forklifts and vehicles are slowing you down, breaking down or just letting you down, they should be replaced.

When you’re ready to purchase new warehouse equipment, you have a big decision to make: new or used? Both have advantages and disadvantages. As with any investment, you need to carefully consider both your long-term goals and your short-term financial picture.

New Equipment: An Investment in Efficiency

Buying shiny, new equipment can be thrilling. You get all the bells and whistles of the latest technology, and a new vehicle is just plain fun to use. It functions perfectly, and it looks great.

It also comes with a hefty price tag. Like a new car, the latest and greatest doesn’t come cheap, and you’ll lose some value to depreciation right away.Is new equipment worth paying more for? Maybe, depending on your situation.

Think of new equipment as a long-term investment. You’ll sink a lot of money into buying new up front, so you should be sure that you can afford the immediate financial hit. New equipment will last longer (when properly maintained), so you are unlikely to have to replace it anytime soon. If your business plan is looking to the future for expansion and growth, buying new can be a great investment.

Buying new also makes sense when your warehousing needs are evolving. New equipment offers technology that can make inventory work much easier, and new safety features provide peace of mind for your workers. Though your workers’ lives are priceless, workplace safety pays financial dividends as well, according to OSHA. New equipment also provides greater energy efficiency than your old workhorses, and these savings compound over time, effectively paying you back over time — the trick is to be willing to wait for the long-term investment in new equipment to pay off.

Used Equipment: A Cost-Effective Solution

Used equipment, on the other hand, works well as a short-term investment when you need to increase your capacity right away but are short on available cash. There are excellent used machines out there, but they won’t usually last as long as new items, since someone else has already gotten several years of hard labor out of them.

The good news, though, is that the previous owner has also already taken most of the hit on depreciation, so you won’t lose valuable investment cash: The value of used equipment typically remains close to what you paid for it.

Used equipment can be a great solution for smaller warehouses with simpler applications, too. You won’t reap the same efficiency savings as you would with a new piece, but in a small warehouse this might not matter as much to your bottom line. You also may not need all that premium new tech, either. Consider carefully which features you actually need to perform at an optimum level, and shop for only those items. A well-maintained used vehicle may well have everything you need, and you won’t pay extra for aesthetics.

What to Look for in Used Equipment

If you decide to explore used equipment for its upfront cost savings, it’s crucial to test it before committing to a purchase. Here’s what to look for when you’re choosing a used item:

• Visual Inspection: Dents and dings are going to be part of the package on almost any used purchase, and they’re not necessarily a deal breaker. Consider whether you can do some detailing to spruce up chipped paint and interior fittings. If fixing cosmetic and comfort issues still brings you in under budget, it’s a good buy.
• Signs of Past Maintenance: Look for loose brushes and other parts that might show that the previous owner didn’t take good care of the machine. Another major red flag for construction pros is a weld used to repair loader arms and buckets. If the machine was broken in the past, it will never be as strong again, so proceed with caution.
• Test Drive: Smoking engine? Weird grinding sounds? Fluids leaking on the ground? Walk away. These are classic signs that a piece of equipment is likely to give you nothing but trouble. Be sure to test every single function during a comprehensive test drive.
• Load Test: It’s not enough just to drive around in a circle during your test drive. Perform a load test to make sure the equipment can bear the weight it’s supposed to. After all, you’re going to expect years of heavy lifting out of your purchase.

Choosing between new and used warehouse equipment is an important decision, and not always a clear-cut one. Consider your current needs as well as your future expectations, and make sure to carefully test any machinery you’re thinking of buying before pulling the trigger on your purchase. With the right investment, you can get years of great service from your warehouse equipment.