Better than new?

Everybody loves a bargain, particularly when it comes to big-ticket items like laboratory equipment and instrumentation. Thanks to tough economic times, smart shoppers can find gems among the hundreds of thousands of available instruments and lab devices—provided they shop smart.

Purchasing used equipment is significantly cheaper than buying new. A reconditioned high-performance liquid chromatography (HPLC) system might cost 30 percent to 40 percent less than a similarly configured new instrument— not bargain-basement pricing, but genuine savings. And most pre-owned items are available for immediate delivery, a huge benefit since leading original equipment manufacturers (OEMs), in an effort to keep inventories low, can take three or more months to deliver a piece of equipment.

The best price to pay for pre-owned instrumentation is $0. Donations are an often-overlooked source of used equipment. Bob Krouse, president of Phoenix Instruments (Rochester, N.Y.), advises schools and nonprofits to seek out local companies, which are generally eager to donate surplus equipment. Kodak, which is headquartered in Rochester, has donated a “tremendous amount” of equipment to universities, he says. “When you get equipment free, even if you can’t fix it, you can sell it or scrap it, and you haven’t lost anything.” Krouse also suggests that universities set up internal equipment networks for sharing or transferring unwanted instruments between groups or departments.

Small, self-financed companies and entrepreneurial firms are more likely to purchase used equipment at startup and continue with the practice, although the demographics of a “typical” purchaser are changing.

For seven years after its founding in 1993, BioSource Pharm (Spring Valley, N.Y.), which discovers antibiotic drugs, was financed by its principals. With money for equipment scarce, the company turned to the pre-owned market for laminar flow hoods, autoclaves, chemistry hoods, incubator shakers and lyophilizers. “We’ve never had any problems or negative experiences,” says Hans Bazlen, senior VP at BioSource, who 16 years after founding the company continues to source from Phoenix Equipment.

Service sells
Much of the equipment servicing at BioSource is performed by staff, but that situation is rather uncommon: BioSource’s eight employee-owners are all professional scientists, and all but two hold doctorates.

Service is a huge factor in the choice of a used-equipment vendor. Most resellers began as service organizations and some, like Phoenix, make three-quarters of their income from repairing, refurbishing and reconditioning equipment that they or other dealers sell. Phoenix offers a 90-day warranty on parts and labor for most equipment. Warranties, says Krouse, assure customers that malfunctions are not a result of pre-existing conditions that were missed during reconditioning.

Phoenix sources its pre-owned equipment from companies and large laboratories that are downsizing or upgrading, as well as from auctions and a few select equipment brokers. But Krause cautions end users to avoid auctions and brokers unless they possess the technical expertise to handle problems.

Auctions, however, need not be disasters, particularly when buyers can inspect items in person and “kick the tires.” Sheri LaRochelle, QC manager at Innovative Foods (Mississauga, Ontario) recently purchased a large autoclave from a nearby dairy that was going out of business. “That turned out great for us,” she says.

When RongChao Jin, Ph.D., assistant professor of chemistry at Carnegie Mellon University, took his position in 2006, equipment funds were tight. Dr. Jin purchased magnetic stirrers, glassware, gloves, a centrifuge and an HPLC from online auction website LabX (www.labx.com). “We saved approximately half the cost on that particular model, and we’re still using it,” he says. “I would definitely recommend online auctions like LabX, particularly for groups that are just starting out.”

Most purchasers shop locally to take advantage of a vendor’s service offerings, with on-site service particularly desirable. RMC Pharmaceutical Solutions (Longmont, Colo.), which provides drug development services, has purchased used analytical equipment, balances, HPLCs, rotary evaporators, spectrophotometers, pH meters, particle-sizing equipment, hoods, incubators, lab furniture and pilot-scale processing machinery. RMC sources from auctions, brokers and refurbishers, but its favorite vendor is Analytical Instrument Recycle (AIR; Golden, Colo.).

The reason RMC prefers AIR? AIR offers on-site service and its eight-step refurbish protocol enables it to bundle one-year warranties—long by most standards— with most items. “Since we’re not equipment specialists, we prefer purchasing from companies like AIR because they take the burden off the buyer’s shoulders,” says RMC COO Scott Rudge. AIR’s offices are a 40-minute drive from RMC’s offices, which allows technicians to get onsite quickly. “It would be difficult for us to purchase equipment from a vendor in a different state,” Rudge observes, “unless a nearby service organization could take over our maintenance and repair needs.”

AIR can provide service on an as-needed or contract basis, but for critical instrumentation RMC prefers a service contract. A contract ensures regular maintenance, but more important, since it is structured at a fixed price, a contract creates incentives for vendors to sell equipment that works.

Siltech (Toronto, Ontario), which manufactures silicone polymers and surfactants, has purchased used ovens, vacuum pumps, balances and chromatographs (GCs, GPCs, HPLCs) from LabEquip (Markham, Ontario), and relies on the vendor and other local instrument specialists to service its HPLCs and GCs.

Caveat emptor
Not all used equipment transactions turn out splendidly. The downsides include lack or loss of warranty, unknown chain of custody, and incomplete maintenance history. Previous owners may have altered or tampered with the instrument in a way that voids an existing warranty or service contract (which is only rarely transferrable anyway). Yet, purchasers can improve their odds by dealing with reputable vendors who can spot and correct problems before putting equipment up for sale.

But inevitably, purchasers sometimes will come across a “lemon”—a piece of equipment that never functions properly, for whatever reason.

Susan Boutros, Ph.D., president of Environmental Associates (Ithaca, N.Y.), has had mixed experiences purchasing used equipment, “but the good definitely outweighs the bad,” she says. “Eighty percent of the time we are pleased.” Boutros has purchased centrifuges, biohazard hoods and incubators. One of the eight hoods she acquired on the pre-owned market “didn’t work out, but, by far, the money we have saved more than makes up for that bad experience.”

Raj Moonsammy, QC manager at Siltech, also notes that some used-equipment purchases have not gone as smoothly as expected, “but it’s hard to say whether the fault lays with the equipment itself or our operators.”

As most lab managers know, purchasing new is no guarantee against acquiring a lemon, either. Boutros relates that a new, high-priced incubator purchased from a “very well-known supplier” not only was defective (to this day it does not hold constant temperature) but that the vendor did not live up to its obligations under the warranty. “The vendor didn’t do anything for us,” she explains.

Rudge believes that the likelihood of buying a lemon from a reputable dealer is lower for a brand-new instrument. Quality among OEMs is quite high, but since it can take months for defective parts to wear or fail on a new instrument, OEMs may miss problems that refurbishers routinely fix before selling.

Another drawback with used laboratory equipment is potential lack of software support. Equipment makers tend to build in upward and downward compatibilities, but after adopting an entirely new software platform they eventually stop supporting old programs. Used-instrument vendors and refurbishers typically lack programming-level software expertise, which leaves customers with software-orphaned instruments on their own.

Before buying, purchasers should therefore check with OEMs to make sure that software is still supported and in situations where it is not, should ask if an upgrade is possible. In Rudge’s experience, manufacturers and their representatives are forthcoming on such issues, despite the fact that they are “losing” sales.

Unique circumstances
Many companies have special circumstances that lead them to purchase pre-owned equipment. Aside from cost savings, purchasers value the trust, personalized service and satisfying business relationships built over the years with refurbishers.

Boutros laments the lack of a “main street” feel to purchases from large, multinational vendors, attributing it to consolidation within the OEM instrument market. “The big companies don’t value small purchasers as much as they should,” she says. “In our experience, used-equipment vendors are knowledgeable about what they sell and are very eager to keep their customers happy.”

Used lab equipment is not right for every situation. Despite his unabashed preference for used, Rudge would not hesitate to purchase new equipment that provides a strategic advantage. He has his eye on GE Healthcare’s latest ÄKTA™ HPLC system, a high-throughput instrument with industry-leading methods-development software. Rudge says he will purchase one—new—as soon as an instrument becomes available, because ÄKTA’s capabilities are “essential for my lab.”

“Buying used won’t get you the latest and greatest technology, but it’s a great way to furnish a lab with routine instrumentation,” Rudge observes. “Unless there’s some revolutionary or must-have technology that will position your company ahead of its competitors, tried and true is preferable to latest and greatest.”

Thinking Points for Potential Purchasers of Used Equipment
 

• Due diligence: Know your vendors and their experience, technical expertise, service capabilities, inventory and ability to broker deals for equipment they do not have in stock.
• Carefully assess your needs to avoid over-purchasing.
• Consider timing, as new equipment deliveries can take up to 12 weeks.
• Study the warranty.
• Don’t be afraid to consult with the original manufacturer; many are quite helpful.
• Rentals may be a viable alternative for new or one-off projects.
• Do you need a backup for critical instrumentation? If so, a used unit might be the answer.
• Test used equipment, whenever possible, before buying.

Used Products to Avoid?

Every used equipment purchaser has a unique comfort zone with respect to the types of equipment he or she would buy and which he or she would avoid. Susan Boutros of Environmental Associates purchases equipment with which she is comfortable and knowledgeable. “Since we are not electronics experts, I am wary of buying used electronics-heavy instruments.”

Scott Rudge of RMC stays away from “durable consumables”items that are potentially fouled or changed by contact with a product. “I would readily buy used HPLC modules or pH meters, but not an HPLC column or a pH probe.”

Sheri LaRochelle, QC manager at Innovative Foods, has purchased used big-ticket items like incubators, autoclaves and even a nuclear magnetic resonance spectrometer, but prefers to source smaller items like stirrers or hot plates new.

Raj Moonsammy of Siltech adds glassware, chromatography columns and computers to his no-buy list. “Computers are cheap enough new,” he says.

A Broker’s View

Used equipment broker EquipNet (Canton, Mass.) is one of the few survivors of the dot-com-era online equipment marketplaces (LabX is another). Unlike smaller outfits that tend to operate locally and serve mostly smaller firms, EquipNet counts among its customers Merck, GSK, Novartis and Eli Lily, as well as multinationals in the food and chemicals industries. EquipNet helps its customers dispose of and acquire surplus instruments and capital equipment, from single pieces to entire facilities, through its online MarketPlace™without taking possession of the goods. “Think real estate broker,” says Ben Potenza, VP of marketing at EquipNet. Buyers pay a 15 percent commission. Items that fail to sell within a specified time frame enter an online auction, part of EquipNet’s “cascading liquidation” program. The company also maintains a store on eBay for smaller items such as hot plates and magnetic stirrers, and promotes auctions through LabX.

More than half of EquipNet’s purchasers are small-to-midsize firms. But over the past 15 months, Potenza has noticed a “huge swing” in larger companies’ purchases of used instruments and other equipment. “Due to economic conditions, scientists are being asked to consider secondhand instruments,” he notes. Big companies now make up about 20 percent of purchasers. The remainder are resellers/refurbishers and, interestingly, OEMs.

Angelo DePalma holds a Ph.D. in organic chemistry and has worked in the pharmaceutical industry. A full-time freelance writer for more than 20 years, DePalma has written nearly 2,000 trade magazine articles on pharmaceuticals, biotechnology, materials and supporting industries. You can reach him at angelo@ adepalma.com.

Pre-Owned Laboratory Equipment Vendors

For a complete list of pre-owned equipment vendors visit the LabLinks directory on LabX.