September 2008 – Equipment Procurement
The price/quality conundrum
Any producer who attended ConExpo-Con/Agg couldn’t help but notice that there is now a large influx of lower-priced equipment hitting U.S. markets. This trend will continue. And it adds some attractive possibilities for equipment purchasing – provided the buyer is aware of the real parameters set by this equipment.
To some extent, price does equal quality and longevity with heavy equipment. And not a small part of this equation in equipment life is the ready availability of service and parts. According to Brannigan, the influx of low-price models has not affected his buying habits.
“I need my equipment to work every day. There is no excuse for downtime. If I can’t get parts or service, my fleet won’t run,” he says. “I would say that any producer would have to decide his tolerance for downtime. That’s the key question. It’s a willingness to put forth the capital outlay or the willingness to accept downtime when waiting on parts or service.”
Druyor agrees. “I haven’t gained a thing if I purchase equipment that’s attractive in price, but has no support,” he says.
Stolowski says that price should be a factor in the purchase decision, but manufacturers can command a premium price if they provide everything that goes along with the premium – including parts, technical support, and service. “There will always be people who will buy because the price is low,” he says, “but if there is a problem, if the machine malfunctions and parts are not available, it affects the bottom line. When you make the decision to buy a piece of equipment, and you make a large capital outlay, a poor decision can stay with you a long time.”
Service is king
As mentioned earlier, the ability of a manufacturer and/or dealer to provide good service is of utmost importance. And this ability factors into the purchase decision. “When I talk to other producers or contractors and I ask, ‘Why did you buy this product,’ price never comes up,” Brannigan says. “Instead, it’s a matter of parts availability, having a local mechanic that can help with the machine, or a product support rep. There’s a whole laundry list of product support factors that come into play.”
A model employed by AEMP to promote the ideal sales and service relationship is the “equipment triangle,” which in its most simple definition is a three-way relationship between the manufacturer, the local distributor or dealer, and the end user, Brannigan says. With emphasis on high standards for fair and ethical business practices, the equipment triangle concept is carried through sales, service, and even equipment rental. “If you have strong relationships in the triangle, and all are doing what they’re supposed to be doing, it’s a win-win for all three legs of the triangle,” he says. “AEMP’s model has been embraced by several local dealers as well as manufacturers, and takes product support to its highest level.”
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