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How to Protect Yourself when Purchasing Capital Equipment part 2

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Old April 12th, 2012, 04:23 PM   #1 (permalink)
244 244 is offline
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Default How to Protect Yourself when Purchasing Capital Equipment part 2

8. Investigate Service & Support: This was touched on above, but thoroughly research service and support. All equipment needs preventive maintenance—and even the best will eventually need some repair. You need to know the company’s track record. Try to talk to some owners who have had service or repair done recently. Ask how fast the company responded, how quickly the service or repair was performed, and if the price seemed fair. Ask the manufacturer which technicians, specifically, would handle service for your shop, and talk to those people. Find out where they're located; ask about their level of expertise and years of experience; and ask about the time and charges to come to your shop.

9. Check Resale Value: While no guarantee of the quality of a manufacturer's current product line, resale value can be an excellent indicator of the product line's historical value. It also increases the chance that when you're ready to move up to a larger or more sophisticated piece of equipment, the equipment you're about to phase out will help finance it.

10. Talk to Financing Agencies: If you plan to finance your equipment with someone who specializes in your industry, ask about the manufacturers you're considering. While they may be hesitant to say anything negative about a company, they're unlikely to have the same hesitation when it comes to saying positive things about manufacturers with whom they have had good experiences. It's even possible that they could refuse to finance your purchase, not because of concerns about your ability to pay, but out of concern over the viability of the capital equipment and of the longevity of the manufacturer. If the agents seem overly noncommittal about the manufacturer you're considering, more scrutiny on your part may be in order.

Even if you don't plan to finance your purchase, it may still be worth speaking with a financing agent. They may share their insights with you out of common courtesy—or in hopes of paving the way for future business.

11. Avoid Being an Early Adopter: Every manufacturer of capital equipment, including the largest and best known, started with a single product—and somebody bought it. However, that somebody probably shouldn’t be a business too small to absorb the loss if the equipment fails to perform. Let larger companies test the waters first. Not only are they better equipped to absorb any potential loss, they're also better equipped to vet the manufacturer and the equipment—and to purchase the equipment on favorable terms. Consumer Reports never recommends purchasing the first year of a new car model—even new models from consistently reliable car companies—simply because there are just too many unknowns. If you feel compelled to take a chance with a new manufacturer, make sure you know the history and reputations of the people behind it. And then work out a lease-to-own agreement that allows you to back out early with minimal loss should the equipment fail to perform.

12. Check with the Better Business Bureaus: Check with the Better Business Bureau in your state and in the state in which the equipment is made. A favorable score doesn't guarantee it's a company you'd be safe doing business with, just as the absence of a listing—or a listing with some resolved complaints shouldn't, by themselves, preclude that manufacturer from consideration. However, BBB ratings can be indicative of the manufacturer's performance.

13. Search the State Attorney General's Complaint Files: You may be able to find complaints against the manufacturer listed in the Attorney General's office in the state the company operates in. This is not a recommended first step in vetting the manufacturer, but it is a step you can take if have reason to question the company's bona fides. On the other hand, if you get to the point where you think this step is necessary, you're probably looking at a company you shouldn't do business with.

14. Understand What Is and Is Not Included in the Purchase Price: Tax is almost never included, and crating, shipping, and installation normally are not. Make sure you know what those costs are. Also make sure you are fully aware of all space and connectivity requirements (for example, verify the equipment's electrical requirement as stated in the current equipment manual—and not from promotional materials—and make sure your facility is in compliance or can be brought into compliance at an acceptable cost). While this isn't directly related to protecting yourself from unscrupulous manufacturers, it will help ensure a satisfactory experience with installation—and help prevent unpleasant surprises.

If your new equipment requires installation, find out exactly what that entails. Does it include connecting the equipment to electricity, gas, water, and drain systems, or will that be your responsibility? Will the installation technicians test all major functions of the equipment in your presence before they leave? Will they take time to show you how to get the most out of your purchase? (If these are not spelled out in the contract as the seller's responsibility, assume they are yours.)

15. Get a Money-Back Guarantee in Writing: Make sure your contract includes a money-back guarantee, and make sure it is signed by a company officer or upper-level manager.

16. Establish an Agreed-Upon Delivery Date: Get a guaranteed delivered-by and/or installed-by date in writing. Insist that the guarantee includes cancellation of the contract and the immediate return of your deposit. While this provides you an additional level of protection, the irony is that it works best with reputable companies. While they're less likely to miss the deadline in the first place, they're also unlikely to resist cancelling the contract or drag their feet in returning your deposit. However, cancellation of the contract and return of your deposit isn't your primary goal. Your goal is to have your equipment in place and running no later than the due date. A cancelled contract leaves you back where you started. And if you've taken orders in anticipation of increased production capacity, you could end up losing business and damaging your reputation. That's why it's so important to purchase from a company with a track record of on-time delivery.

17. Insist on a Written Contract and Make Sure You Understand It: Before you enter into a contract, make sure you understand it completely. Above all, don't make assumptions, and don't accept verbal promises. Get everything in writing. If the seller balks or tells you it's not necessary, consider that even more evidence that it should be in writing—or that you should be looking elsewhere for your equipment. Finally, if there is any part of the contract you're not absolutely clear on, get professional help (see below).

18. Have the Contract Reviewed by an Attorney: If at all possible, have an attorney review the contract. It's an additional cost, and to some an unnecessary one. However, assume your attorney charges $200 an hour and takes an hour to review your contract. While many attorneys charge less, and no review of a simple contract to purchase capital equipment should take more than half an hour, the cost for an hour at that rate comes to 4% of a $5,000 purchase. While that's not insignificant, the cost as a percentage of the purchase price drops rapidly as the cost of the purchase increases. For example, $200 is 1% of the price of a $20,000 purchase, and only four-tenths of one percent of a $50,000 purchase.

Finally, keep this in mind: if the contract you sign comes back to haunt you, you'll spend at least an hour simply explaining your problem to an attorney. In addition, there's no guarantee the attorney can break the contract. And even if the attorney is able to break it, that $200 will likely be just a drop in the bucket. Think of a contract review as insurance, something else that's a waste of money—until you need it.
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Old April 12th, 2012, 04:57 PM   #2 (permalink)
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Default Re: How to Protect Yourself when Purchasing Capital Equipment part 2

I plan on sending this to every screen printing company I can! AMEN!!
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Old April 12th, 2012, 05:17 PM   #3 (permalink)
meshman meshman is offline
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Default Re: How to Protect Yourself when Purchasing Capital Equipment part 2

Kudos to 244 for this post. especially the early adopter point and the scrutiny of the sales contract.
Other printers testimonials are the best reference.
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Old April 12th, 2012, 07:14 PM   #4 (permalink)
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Thumbs up Re: How to Protect Yourself when Purchasing Capital Equipment part 2

Very good advise Rich. Well articulated as well!
Thank you,
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Old April 12th, 2012, 07:41 PM   #5 (permalink)
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Default Re: How to Protect Yourself when Purchasing Capital Equipment part 2

Great advice, virtually rules out buying off anybody but MnR. Who came up with this?

Dont get me wrong, I agree with 90% of it, but you cant say its not tailored in parts....

LMAO.
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Old April 12th, 2012, 07:50 PM   #6 (permalink)
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Default Re: How to Protect Yourself when Purchasing Capital Equipment part 2

Quote:
Originally Posted by Printwizard View Post
Great advice, virtually rules out buying off anybody but MnR. Who came up with this?

Dont get me wrong, I agree with 90% of it, but you cant say its not tailored in parts....

LMAO.
I'd say it rules out only the shady companies, and you obviously know who they are!

Here we go. How about a good trusted brand pool? (prominent here in the USA)

Brown,M&R,RPM,Anatol(a little sketchy),Tas,Workhorse.

Don't let the leader in the industry blur your judgement. They can't help it that they have the best reputation HANDS DOWN
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Old April 12th, 2012, 08:07 PM   #7 (permalink)
jmd jmd is offline
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Default Re: How to Protect Yourself when Purchasing Capital Equipment part 2

Quote:
Originally Posted by Printwizard View Post
Great advice, virtually rules out buying off anybody but MnR. Who came up with this?

Dont get me wrong, I agree with 90% of it, but you cant say its not tailored in parts....

LMAO.
I think you have one eye closed. This is good general information for all. Be specific as to what part offends you.
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Old April 12th, 2012, 08:15 PM   #8 (permalink)
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Default Re: How to Protect Yourself when Purchasing Capital Equipment part 2

I disagree with the technician network. Used to be fearful of no support, but when you are in a city with local companies you can find that local techs get stuff done quicker and as good. I know a machine our local guy Wayne had looked at his machine, and we got it fixed, not sure if he is accredited or not, but he couldn't fix the fault, now we are in first place for their trade up, when they can afford.
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Old April 12th, 2012, 08:18 PM   #9 (permalink)
jmd jmd is offline
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Default Re: How to Protect Yourself when Purchasing Capital Equipment part 2

And when you are in a city without............?
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Old April 12th, 2012, 08:26 PM   #10 (permalink)
Printwizard Printwizard is offline
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Default Re: How to Protect Yourself when Purchasing Capital Equipment part 2

All cities will have contractors with the skillset. Towns may not, and then it's a call between independent or network, either will have to travel still.
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