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Success Factors for Buying Reconditioned Test Equipment

Today’s technological advancements, equipment obsolescence, and long purchasing lead times make it difficult to define accurate equations for capital-equipment acquisitions. As a result, more and more companies are looking at buying, leasing, or renting reconditioned test and measurement equipment as a strategic way to reduce operating expenses and fortify the bottom line. For example, refurbished and recalibrated used products can cost anywhere from 20% to 60% less than buying new.

Companies opting for reconditioned equipment typically receive their products much faster. Where new test and measurement products often require an eight- to 12-week lead time, reconditioned equipment often can be received in two or three days. This kind of product availability translates into additional savings, especially in terms of avoiding the cost of waiting for equipment.

To help you achieve the greatest financial and operational benefits when buying, leasing, or renting reconditioned equipment, here are some important guidelines to follow.

Customer-Direct Company vs. Reseller

Work with companies that sell directly to end users rather than with resellers. Customer-direct companies proactively acquire and maintain a robust inventory of test and measurement equipment. Resellers, on the other hand, maintain very little inventory and shop for items when an order is received.

The reseller model is not ideal for two important reasons. First, resellers typically charge a 20% middleman fee over the cost of the product. Second, because resellers need to locate and acquire product before they can send it to the customer, product delivery cycles may be longer.

Since resellers often represent themselves as having equipment in stock, it often is difficult from a phone call or a website to distinguish a reseller from a customer-direct company. Don’t hesitate to ask whether the item actually is on the shelf. Request product serial numbers to verify availability.

The product lead time a customer is quoted can be another indication. If a company can promise a two- to three-day turn around, chances are it has the equipment you need in stock.

Solid Reconditioning Process

Go with a company that has the in-house capability to recondition and calibrate products to perform up to the highest standards. Ask prospective companies about their reconditioning process. How do they ensure that the product they are sending you has been carefully reconditioned and calibrated?

Refurbished test equipment should meet all manufacturer’s specifications. A key to meeting these requirements is maintaining a lab with full traceability to the National Institute of Standards and Technology (NIST) while meeting the minimum requirements of MIL-STD-45662 or a higher ISO standard. These certifications ensure that the lab adheres to strict guidelines and standards.

A sophisticated reconditioning process includes three critical steps:

  • Preinspection—Lab technicians identify any physical or mechanical defects of a unit and custom fit options and configurations to meet the customer’s requirements.
  • Lab Verification—All physical and electronic defects are repaired and all necessary parts replaced. Units also are tested using the manufacturer’s original equipment specifications and guidelines.
  • Quality Control—Each unit is thoroughly cleaned and all external parts restored. All accessories, manuals, testing documentation, and certifications are obtained in preparation for shipping. If any step is missing, you may receive a sub-par product.

If it is a local company, ask to tour the facility. Find out about the background and training of the lab technicians and sales force. Make sure the equipment you need comes with the required accessories and manuals.

If the company cannot recondition or calibrate products onsite, it must pass these important processes on to another company. As a result, delivery takes longer, and there is a concern regarding quality because of an unknown third party.

In-Depth Inventory and Customer Base

Inquire about the depth and breadth of a company’s inventory. Does the company carry the types of products and the current models you typically need? Is a broad range of manufacturers represented?

Often, companies claim to have a wide selection. But upon further investigation, it becomes clear that the inventory consists of out-of-date products. A reputable company not only should carry the leading brands such as Agilent Technologies, Fluke, Anritsu, and Tektronix, but also should supply important niche players such as Scientific Atlanta, Giga-tronix, Aeroflex, Hughes, ENI, and Varien.

The company needs a strong track record with well-known global companies, especially those in your particular industry. Contact three or four customer references from companies most similar to your own in terms of size and business to ask pointed questions about their experiences.

Value-Added Services

Another area to research is a company’s value-added services, such as warranty programs, return policies, acquisition strategy, and post-sales support. Customers should expect a five- to 10-day right of refusal on a purchased product—no questions asked.

After that period, a warranty should apply to cover you in the event that you encounter problems with the product. A six-month warranty is the industry standard for test equipment, but extended warranties may be available on specific models or types of equipment. If you need longer warranties, your equipment professional may be able to suggest a similar model on which an extended warranty is available.

Some companies also offer recommendations on the best acquisition strategy—whether it’s renting, leasing, or buying. These companies can help you determine your needs, evaluate your financing options, and manage the acquisition process.

Post-sales support is another important service. You need reassurance that there is help available to you if the product you receive isn’t working or you have questions. Vendors that outsource reconditioning and calibration are not as able to answer questions and solve problems without pulling in additional parties.

Bottom-Line Savings

Equipment management has a bilateral structure. You also can improve your balance sheet by selling your own underutilized test and measurement assets to a reconditioned equipment provider. It’s a great way to recoup capital costs or offset capital expenditures.

In some cases, companies sell test and measurement equipment and rent it back once or twice a year at very favorable, prenegotiated rates. Expect your reconditioned test and measurement equipment provider to be responsive, creative, and flexible, working with you to meet your needs at the lowest price and in the shortest time frame.

About the Author

Mike Megown is president of DoveBid Test and Measurement Group. During his 25-year career, he has worked as a senior lab technician with Ford Aerospace Communications Corporation’s Satellite Communications Division and as general manager of Haltek Electronics. When the company changed its name to Test Lab Co., he was promoted to vice president. In 2000, DoveBid acquired Test Lab Co. and appointed Mr. Megown as president of the group. He also attended Devry Institute of Technology. DoveBid Test and Measurement Group, 1010 Winding Creek Rd., Suite 100, Roseville, CA 95678, 800-442-5835, e-mail: [email protected]

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Published by EE-Evaluation Engineering
All contents © 2003 Nelson Publishing Inc.
No reprint, distribution, or reuse in any medium is permitted
without the express written consent of the publisher.

September 2003

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