Profit From Used Equipment

April 5, 2005
Four easy ways to increase your bottom line with used equipment

About the author: Carl Davidson is president of Sales & Management Solutions, Inc., a consulting firm specializing in sales and management video training and live seminars exclusively for the water equipment industry. He has authored several books including Financial Secrets of the Water Improvement Industry and numerous articles. Send comments to [email protected]. For a free demonstration video, newsletter and list of products, contact Carl at 800.941.0068, or by e-mail at [email protected];

Many equipment dealers never think about used equipment. In fact, I often see piles of used systems in the dumpster at the back of the dealership. Little do they realize that this trash is treasure that can help sales and profits in four easy ways.

A Prospecting Tool

My company constantly ran an ad that said “We buy used water softeners for cash. 555-1212.” That’s all it said and I ran that ad for years in the local weekly paper. It didn’t say who we were or give any details. That ad cost me $8 per week but I averaged 12 calls per week from it. We used the calls for two purposes.

You have to realize that anyone who calls has already tried everything to sell their softener. They have come to the point where it’s you or the trash. We trained our sales staff how to buy those softeners for between $25 and $50. If we bought the softeners, we had a great deal. If not, we would try to talk the seller into trading the equipment in on a new softener or RO. Many people were selling because they wanted a new softener, and they were great leads. Others just wanted out of softening altogether. We converted those into RO leads by offering to inspect their drinking water system, doing a double take and asking, “You’re not drinking from the tap are you?”

Credit Turn Downs

The second way to benefit is to take the used units you bought, recondition them and sell them to people with poor credit. If you spend $50 to buy a used unit and spend $100 to recondition it, all you need is a small downpayment and you can hold the paper yourself on borderline credit cases. I did this for years and I never lost a unit. (Not many people think of taking the softener along if they leave town in a hurry.) There are programs that allow you to deduct the money out of the customers’ bank account monthly, and that makes payment automatic and risk-free. How many credit turn downs did you have last year? Don’t you wish you had made some profit on each of them by selling used equipment?


The third advantage you get from used units is that you can rent them. Let’s say you have $150 tied up in a used unit. If you take a security deposit, it will be enough to cover your equipment cost, and every dollar generated from the rental is profit. It allows you to expand your rentals without tying up money. Finally, it makes owning a unit different than renting one. Sell the best and rent the rest.

Blow Away Competition

The forth advantage allows you to wipe out your competitors. This is a very powerful tool. Let’s assume that a couple tells you they are going to buy brand X because it is $400 cheaper than yours. If you have a brand X in stock, you might try the following tactic: “I know you will most likely regret buying brand X unit after you experience it but I respect your choice. However, I’ll sell you a used brand X I have in stock for only $500. If you like brand X, you will get it for only $500. But if you don’t, I’ll take your Brand X on trade for the full $500 and get you a brand new brand Y.”

As you can see this is a tactic that the sellers of new brand X cannot recover from, and it will get you a lot of sales. In many cases the couple will buy your unit just because you gave them a choice, and because often they were not being truthful about the price of brand X in a first place.

What stops dealers from doing this? Some feel it is not their style, others are so sold on their brand they don’t want to sell or rent anything else. Both these views are short-sited in my opinion. Cadillac dealers sell used Fords and there is a market out there for every brand and every price. If you fail to offer it, you are simply turning your back on additional revenue, and turning your back on customers in need of better water.

Give it a try. I know this one change will add thousands to your bottom line.


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About the Author

Carl Davidson

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