Thread: Machine parts values - Large dealers that specialize vs small fry reality

Don't you hate it when you get a NOS part in the original box part on a pallet of stuff at an auction, essentially for free, Google it's part number, find out PLC Center has it for over $3,500, current new price almost $6,000.

...but then get deflated when you check eBay and someone has the same model (also NOS) for $900 with a "make offer" button ? LOL... in this case a large Fanuc AC servo motor...brand spankin new in the box. And yet, I suspect many corporate types would pay PLC Center $3,500 before they would pay me $500 for it.

A lot of times the "corporate types" have to deal with certain vendors, so they aren't allowed to "shop around". Then they end up paying way too much for stuff. Yea, it can get really dumb.

That guy's bonus probably depends on sticking to company policy and not how much money he saves.

Kind of like the guy here who dumps perfectly good usable stuff in the recycling bin because he bonus is based on pounds recycled. I got yelled at for trying to grab a computer mouse out of the bin.

Steve

Originally Posted by Milacron

And yet, I suspect many corporate types would pay PLC Center $3,500 before they would pay me $500 for it.

It is usually a 'whole cost' or risk issue. Ex; the $3,500 entity has one or more of; full refund, full replacement, or at least flat-fee repair of - say $1,500. 'Corporate' guy's risk is best-case a working item for $3,500, next-best case a working item @ $5,000, worst-case out-of-pocket only bothway shipping, but wasted time - and having to look for another source.

If yours is $500 with 'none of the above', his worst-case is out of pocket $500 plus shipping. The $500 best-case for a working item gets submerged because of potential wasted time, and because a small outright loss is harder to justify than an overspend that at least 'got the job done' ON time.

What to do? Make arrangements with a repair shop, raise the price to include HALF the cost of a rebuild, pass on a warranty. Hope it needs no repair, and bank the gain against the 'half' that does fail on other transactions.

Get the balance right, and you have one claim in three or fewer, and bank the rest.

Which is probably pretty much what the outfit selling at $3,500 must be doing.

IOW - not enough to be 'just' a machinery dealer. One has to also be a banker. And a gambler. A careful gambler.

Which probably you already do.

But just how visible to a potential customer is your willingness to help cover the unexpected vs another outfit that brags more loudly?

Bills are paid in dollars, but choices are made on perceptions.

Bill

Some of it also has to do with how purchasing channels are set up. When purchasing is centralized with a few vendors it makes things (supposedly) flow better and they might even negotiate for discounts based on volumes. If someone is buying something off ebay on a personal or corporate credit card it requires more handling to make sure it gets classified correctly for assets, taxes etc. So while you might be paying more upfront the idea is that you are saving on the back end because such purchases flow smoothly through the AP, asset tracking etc. systems as the vendor is already set up/classified in these systems.

I cannot determine if PLC Center has a rogue inventory control system, or some drunks inputting prices.

I have found 2-3 killer deals on PLC Center, and then, uh, well, all six items failed QC.

Yeah, sure.....

I think I have blocked PLC Center listings on ebay saved searches, as I did with mikekandu.

Originally Posted by charlz

such purchases flow smoothly through the AP..

Yes, and a sometimes VERY large part of that 'AP' is how long a 'favored' vendor will wait for payment.

There are MANY major firms about that don't really give a damn how costly an item is, so long as that cost is passed-on with overhead and profit AND collected for from THEIR customer before its own associated costs have to be paid-out to their suppliers. Those too, are bankers and gamblers.

Most major supermarket chains, for example, are not really in the food business at all. They are bankers.
They take in multiple billions on a cash or near-as-dammit-cash credit-card basis, but pay for the goods no better than net 30 days, putting the billions of dollars always in 'float' to work wherever they can do.

Same again with 'Life Insurance' companies with an even longer average lag (scores of years) between premiums in and claims out.

Bill

Originally Posted by thermite

Yes, and a sometimes VERY large part of that 'AP' is how long a 'favored' vendor will wait for payment.

There are MANY major firms about that don't really give a damn how costly an item is, so long as that cost is passed-on with overhead and profit AND collected for from THEIR customer before its own associated costs have to be paid-out to their suppliers. Those too, are bankers and gamblers.

Most major supermarket chains, for example, are not really in the food business at all. They are bankers.
They take in multiple billions on a cash or near-as-dammit-cash credit-card basis, but pay for the goods no better than net 30 days, putting the billions of dollars always in 'float' to work wherever they can do.

Same again with 'Life Insurance' companies with an even longer average lag (scores of years) between premiums in and claims out.

Bill

Sounds about right. I've billed customers 10K for a fixture that cost me 5K, but I could have built and made a profit on for 1K. Its ok though, its not like that largess doesn't come out of the consumer's pocket

Originally Posted by Milacron

Don't you hate it when you get a NOS part in the original box part on a pallet of stuff at an auction, essentially for free, Google it's part number, find out PLC Center has it for over $3,500, current new price almost $6,000.

...but then get deflated when you check eBay and someone has the same model (also NOS) for $900 with a "make offer" button ? LOL... in this case a large Fanuc AC servo motor...brand spankin new in the box. And yet, I suspect many corporate types would pay PLC Center $3,500 before they would pay me $500 for it.

Since you don't have the overhead of a big co. you probably shouldn't expect to get the premium they do.Most of the new price goes to covering various expenses.I would be surprised if Fanuc or whatever OEM even makes 20% profit from the sale.I mean what did you pay for it?

The plc center on the bay is for the most part disconnected and delusional.

If someone has it listed for 900 make offer, list yours for 850 make offer.And if you sell it for half that I'll guess that you would be making a much higher profit percentage than all of the above.

I guess it all comes down to ones sales style.Some guys like to price things high(or truly believe what they have is somehow worth close to the Hope diamond) and wait decades to sell things(presuming they have the financial luxury to afford low turnover) and others realize our time here is finite and price things at or below market and make out better in the end with volume.



As a side note off the topic.But I'm sure you can appreciate.I've noticed over the last decade a gradual change in the used machine tool market with various factors at play but not the least of which being the internets growing prominence.It used to be that one could find significant deals at live auctions.Now it seems with the decline of used machine dealers (some of which is due to a decline in manufacturing,depression, and acceleration of technology,etc) that the auction companies themselves have filled the role of middle man with their ever increasing buyers premiums and high bidders that they drag in from everywhere or "Mysteriously" nowhere via the net.

Now the best way to get a deal is to buy direct from the seller, that the net has helped make a lot easier via craigslist, ebay machinetool lists etc.

Originally Posted by Cornilsn

..its not like that largess doesn't come out of the consumer's pocket

Ultimately, it does do, even if the 'consumer' is never related to a given transaction. One very bad example is Japan, where one shops for emergency telco repair parts in the stalls of Akihabera, and finds that the ecomomist's reports that there are up to EIGHT levels of middlemen and their markups between factory and consumer in Japan vs 2 to 4 in the US, are all-too true.

So what happens? Someone such as the Koreans, who can build 'tronics and autos with fewer levels of shuffling paper than the Japanese, despite their Chaebol overhead, and with less overhang of historical legal costs than 'domestic' US makers, plus a better rep for QC (deserved or not) than the Chinese, does quite well with value-for-money products, from cars to fridges. microwaves, and TV.

Can GM do that too?

Only after covering the overhanging liabilities and entitlements of multiple-decades of sloppier operation.

So even when prices are similar, the Koreans are coining money and GM barely covering costs.

Part of what makes bankruptcy so common for US firms is trying to get out from under their past.
Airlines among the worst examples...

Bill

You gotta cut out the middle man any time you can and try to be one anytime you can.

One of our major problems in the US is that too much of available finances investments and capitol are diverted to the gambling house of illusions wall st. rather than to industry and reality etc.

I mean In my opinion as sad as it is GM and Chry. should have been left to rot.If we had a healthy business climate/real economy there should have been other American companies and investors chompin at the bit ready to come in pick the bones and make a go of it themselves.Out with the fat decrepit old and in with the hungry new. Something is wrong.America used to be a place where companies were born and died all the time a real life cycle.Now we have a climate where we have to keep institutions on life support while the sperm to create new is wasted on wall st. or squirted into some other country.

As much as I hate government interference there really should be more limits imposed on how big companies can become.So that they can not buy out all viable competitors.

So what exactly is for sale here and what is the price?

Originally Posted by Smoooth

So what exactly is for sale here and what is the price?

The methodology of assymetrical economic warfare. And mastering it lets one SET the price.

Bill

i got some 4340 drops

Seriously tho, as you probably already know, It's better to make your money on the buy because the sell can be real fickle. Sounds like you won't get hurt.

What's it going for on the open market? Did the guy sell his at $900?

Offer it to Radwell (PLC Center). The paid me fairly well for some old used AB stuff a few years ago.

2¢

Seems to me in the past we have seen Milacron state something to the effect of- The price he paid for something has no bearing on the amount of money he expects to be paid for it. Hes not running a charity.

Originally Posted by yzfr1pwr

Since you don't have the overhead of a big co. ......................I mean what did you pay for it?

.

Originally Posted by davohouston

Seems to me in the past we have seen Milacron state something to the effect of- The price he paid for something has no bearing on the amount of money he expects to be paid for it. Hes not running a charity.

Few 'ere are running a charity.

I could be wrong (again) but train-wreck graphics aside, I read that Milacron was not - in THIS thread - going on about selling a particular item at all.

Rather, I read it as a comment on a 'typical' situation, seen frequently, and solicitation of input as to what it was that created and preserved that sort of chronic imbalance between large-player and small(er) player price expectations and customer decision points ON those quite different prices.

That 'general case' affects small makers and small 'do-ers' just as much as it does small dealers and brokers.

Everybody from the guy sweeping floors in a one-man shop through the 'Captains of (large) Industry' to incumbents and candidates for Congress and President .... praises 'small business' as the national salvation.

Why then, are the same loudmouths unwilling to BUY FROM the small business even when they offer better value for money?

Perceptions? Risk aversion? Brotherly support of the greedier classes? 'Status' of paying more than the next fool?

And whatever it is ... how can it be shifted to a paradigm that is fair to more of the players?

Bill

Its a matter of having something that the right people (ie. ebayers) will want-plus a Fanuc servo motor is especially tough as its not something that 99% of the people are going to want just to "have" it, rather they are going to "need" it, as such when that need is there, price is not much of a factor, especially when its priced way below new cost. So that leaves an actual sale to the 1% that will want to pay $50 for it...and likely that 1% is the PLC center buying it for the people that will "need" it down the road!

Plus, there are other places out on the internet that are much better than ebay for selling stuff to the "big boys" Just sold one piece of equipment on one of the big boys online auction sites, that was listed on ebay without hardly interest...many times...sells the first time around too on the new venue! Plus its amusing seeing stuff actually selling for what stuff on ebay is lingering without any offers even being made! Not to mention those ebay fees sellers have to pay!

Post the part number and description, sooner or later someone that needs one will call.

Google seems to have a pretty solid grip on this site, and it has directed me here often enough.

What's it worth? What it's worth to the buyer. But you knew that.

Cheers
Trev

Originally Posted by davohouston

Seems to me in the past we have seen Milacron state something to the effect of- The price he paid for something has no bearing on the amount of money he expects to be paid for it. Hes not running a charity.

Nothing wrong with that.But when you have something you think is valuable and than you find someone whoring up the market with the exact same product or service way cheaper, it sucks but ultimately you have to come to terms and whore em one better unless you want to keep what you really want to sell.

I guess if there is just one other for sale milacron could buy it and own and corner the market for it under 3500 .