Everything Wears Out
It’s a universally understood truth that the only things that are certain are death and taxes. Along the way to death, however, there is usually decline. People and things get older and tend to break down. Just as seasoned workers sadly often get replaced by younger employees, sometimes newer technologies make old machines antiquated.
At some point, you will likely need to replace or remove nearly every piece of metalworking machinery on your shop floor, excluding only those kept for sentimental reasons, like great-grandpa’s leaf brake. The equipment that can no longer be made to operate will likely be scrapped or sold for parts, but what about the machines that still work? When is the right time for you to sell them? (And just as importantly, how do you sell them?)
When Should I Sell My Old Metalworking Machine?
There are several factors to consider when contemplating selling an old piece of metalworking equipment:
- Do I need a different machine? If your current machine isn’t the best match for the tasks that you repeatedly do, or if you need a slightly more specialized model for better efficiency, then it might be prudent to sell or trade it in to offset the price of the new equipment.
- Is my machine still profitable for me? Look carefully at the costs of keeping your machine running and weigh that against the operational costs of a new piece of equipment. Does your current machine require costly maintenance or replacement parts? Are there more energy-efficient machines on the market that would make a considerably lower impact on your bank account? Could a newer machine significantly improve the productivity of your shop? These questions can help determine if it’s time to trade up.
- What is the age and condition of my machine? While the adage is often true that “they don’t make ’em like they used to,” keeping an old machine around, no matter its condition, may not be in your best interests financially. The older a machine gets, the more wear and tear it suffers, requiring increasing amounts of maintenance. Even if repair costs are low, finding replacement parts will get more difficult with the more time that passes, not to mention finding technicians who are trained to work on older machines. In addition, metalworking machines, like most other equipment, usually depreciate as they get older, decreasing their resale value. You’ll want to put your machine on the market when it has a chance to bring a decent price.
- How often do I use my machine? Even in great condition, a machine tool doesn’t do your shop much good if you use different machines for the same function, or if the types of jobs you currently perform don’t require its services. If a machine sits idle for months on end, it may be worth freeing up floorspace by selling or trading it and then jobbing out the rare tasks that would have required its use.
- What is the current demand for my type of machine? It’s always a good idea for shop owners to keep an eye on the market conditions for the kinds of machines they use. This is useful both in finding deals for buying machines and for knowing when it’s an ideal time to sell. If you suddenly notice a particularly high demand in the market for the equipment you are considering selling down the road, you may want to move up your timetable and take advantage of the economic conditions while you can.
How Do I Prep My Old Machine for Sale?
Once you decide to sell an old machine, it’s not as simple as loading it on a truck, like you might if you were taking it to a scrap yard. It takes time to prepare a machine for resale or trade-in. In fact, you should keep the disposal of the machine in the back of your mind almost from the moment you buy it.
- Maintain your machine in good condition. While you may want to believe differently when you install your brand-new machine on the shop floor, the plain truth is that it likely won’t be with you forever. By following all maintenance schedules from day one and keeping it in good running order, you not only postpone the eventual day you’ll retire it, but you also improve its resale value when that time finally comes. Think twice about making any customizations to the old machine that future owners won’t appreciate, and be sure to document any changes you make, including before and after photos.
- Keep good records of operation and maintenance. While knowing the age of your machine is important, it’s also essential to keep track of the total hours it’s been in operation, both for servicing your old machine as you go and for eventually selling it. Potential buyers will want to know how much it’s been used, as well as how well it’s been maintained over the years.
- Clean and inspect the machine. When it’s time to sell, be sure to fix up the old machine. Have a qualified service tech inspect it and make sure it’s still in good enough working order to interest a buyer. If repairs are too costly, you have the option of selling it “as-is, where-is” or broken down to sell for parts, but a working machine will fetch a much better payoff. Once it is operational, be sure to thoroughly clean it. A clean old machine sells better than a dirty one, and sometimes a new lick of paint is just what is needed to catch the eye of prospective buyers. How well the equipment operates may not matter much if it gives an interested party a bad first impression.
- Create detailed documentation for your machine. Take photographs of every angle of the machine, from close-ups to distance shots, some taken in different lighting, some looking inside at every accessible point, etc. In the age of digital photography, there’s no such thing as too many photos. Choose the best from the collection to use in advertising but keep the others on hand in case someone wants to look at the left rear wingnut on the support assembly or something along those lines. Shoot video of the machine in operation so buyers know what to expect. Prepare a description of the machine that includes every possible technical specification and double check all measurements. Write a detailed explanation about the machine’s current condition. The more info a buyer can look at, before they even see the machine itself, the better chance you’ll get to not only sell it, but also get a good price for it.
- Be transparent about any problems. It’s tempting to gloss over problematic issues, but to keep them from coming back to bite you—whether as a dispute with your buyer following the sale or later with colleagues or customers questioning your character—be completely transparent about all potential concerns, especially once the transaction has been started. Whether it’s an alteration to the equipment, a funny noise for which you can’t quite locate the source, or a strange machine crash that mysteriously happens every couple of months, don’t leave your buyer to be surprised. Even if you resolve the discovered issue to the buyer’s satisfaction later, people on his staff may have already groused about it to their friends in the industry, giving you a hurt reputation that you’ll never fully shake. If you are transparent about issues when you advertise the machine, buyers will see that you are a serious seller with integrity and will be more, not less, willing to trust you in a deal.
- Price your machine realistically. Research the market value of your equipment and price it accordingly in your listings. Listing it on the high end will give you some room to haggle, but it could turn off those who are moving through ads rapidly. Listing in on the low end will likely get it sold sooner, but you’ll encounter a greater number of unqualified buyers who will just waste your time. It takes practice to price your machine competitively, but you can get a good idea where to start by spending the time to do careful research through various marketplaces.
- Know what your transport charges will be. Whether you will be passing the rigging and loading charges on to the purchaser or not, become aware of approximately what they will run. Will you need to hire outside help or equipment to rig it, or can it all be done inhouse? What is the approximate freight rate per mile to move your machine? Having an idea of these costs and arrangements up front may keep you from delays or costly surprises upon the sale of your equipment.
How Do I Sell My Old Metalworking Machine?
When you’ve decided to sell your machine and it’s cleaned up, documented, and ready to head out the door, you have several options for getting a decent price for it.
- Trade it in on new equipment. One of the most convenient ways to dispose of an old machine and get something for it is to trade it in on a new or used machine you need to buy from a machinery dealer. Many full-service dealers will take old machines on trade, even if they only regularly sell new equipment. Sales personnel at these companies are anxious to make a sale, and if they are authorized to take trade-ins, you could wind up with a decent amount of credit for your machine against your purchase. They often will arrange for all the rigging and transportation costs, usually switching out your old machine for your new one on the same visit using the same transportation.
- Contact used machinery dealers. Even if you don’t need new equipment that you can trade your machine in against, it still is a good idea to contact several used machinery dealers in your area and see if they have an interest. Dealers will often tell customers that they will keep an eye out for a certain piece of machinery, so they may already have an eager buyer waiting. If you aren’t ready to sell quite yet but know you will be disposing of your machine down the road, it doesn’t hurt to let machine tool dealers learn about it ahead of time so that they can bring it up to their customers. If the timing is right, you might be able to sell your machine to a dealer ahead of your intended schedule for more than you otherwise could have gotten for it. Some machinery dealers will also let you consign your machine through them—just make sure you have a signed agreement and that you understand all aspects of it, including storage and other fees that you might be charged.
- Advertise it online. You can—and should—advertise your machine online on several different sites and possibly also in print publications in the industry that offer a listing service. If you are determined to trade it in on a new machine, then you won’t want to go overboard in arranging for costly listings, but you can easily get a better deal than you would with a trade-in, so it is worth it to check it out, even as just a bargaining tool to take to your dealer. Along with advertising costs, privately selling your machine will require other fees, such as rigging and transport at both locations, inspections, insurance, and possibly storage costs. In addition, you will probably be liable for collecting and paying sales taxes along with capital gains taxes. While it can be more profitable, by privately selling your machine, you run the risk of being defrauded, so vetting potential buyers is an essential practice. Scammers abound with different tricks to try and separate you from your machine without paying for it, or to try and get money from you against a larger overpayment they’ve promised or have possibly made on a stolen credit card. Other red flags to watch for include an ignorance on the part of the buyer about the type of machine you are selling, trying to get you to accept a personal check, or asking you to work with a third party on their behalf.
- Donate it to a trade school. If the machine runs, but you don’t need the money that badly, you can always see if a local high school or trade college will take it, either for a reduced price, or just for free, leaving you with a tax write-off.
- Sell it at an auction. If your machine has severe problems or is simply so antiquated that there is little to no demand for it, a better alternative to scrapping it is to arrange with an auction company to sell it as part of a large, combined auction. You likely won’t get as much for your machine as you could have through a direct sale, but hopefully it will bring in more than you would have gotten from your local scrap dealer. Then again, for the right machine, a bidding war could start, and you could be pleasantly surprised at the outcome.
Here Today, Gone Tomorrow
No matter the shop or facility, as time passes, machines come, and machines go. As you procure new additions for your shop, remember that someday you’ll likely be selling them, so take the necessary steps to keep them well-maintained. As they get older and you decide that their usefulness might be ending, start keeping an eye on the market so you have an idea of when they might have the most resale value. Also stay abreast of the latest technologies available for the machines you use the most. Your old machine might be just fine, but an energy efficient high production machine with the latest bells and whistles could provide a good motive for looking to trade in your current equipment much earlier than you expected.Bottom of Form
By preparing early, you’ll make the eventual transition away from each piece of equipment in your shop much less painful when the time comes.