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Should You Invest In New or Used Embroidery Equipment?

Tuesday, November 10, 2015
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I’m sure this question has crossed the minds of every embroiderer - from start-up entrepreneur to seasoned professional. The temptation to save a significant amount of money on what is more than likely your largest expense (equipment) definitely warrants research.

The simple answer to this age-old question is: There is no simple answer. Like many business decisions, it is a matter of considering and analyzing many options before making the decision that is right for the specific needs of your individual business. Rarely do two companies, even though they may compete in the same market, have the same capitalization, experience, employee skill sets, product mix, and strategies.

If overall capitalization is a major issue, machine cost may make up a significant portion of your start-up capital. If this is the case, you may feel forced to begin with used equipment, simply to save money, and then upgrade as your company grows. On the other hand, if you have ample capitalization machinery cost may not be as much of an issue as:A) necessary number of sewing heads B) types of frames and C) desired software features. Regardless of your individual start-up capital position, it is important to consider the following points when making your decision about new vs. used equipment.

What To Consider When Deciding Between a New or Used Machine

1. Technology 

When considering the differences between new and used machines, we should start with technology differences. Over and above the additional “bells and whistles” found on newer machines, what about the hardware? An older machine built on a 16 bit processor will find it difficult to compete with 64 bit technology. Although many older machines may allow operating system upgrades, they will always be limited to the existing hardware. Items such as floppy drives, thumb drives, and Ethernet networking may not be available as upgrades on older machines.

Newer machines usually offer much faster sewing speeds, which results in increased productivity. For example, a newer machine may reach speeds of 1,200spm to 1,500spm. Compare this to an older machine which may only stitch up to 750spm (if in good shape).

This yields a 2 to 1 production ratio. That means the new machine can produce 2 embroideries for every 1 on the older machine. If you need the speed and features to meet your production model, the new machine may be your choice. If the speed and features of an older machine meet your production model and you feel a need to trim capital costs please consider the following points before choosing that “gently used” machine.

2. Wear and Tear

This is probably the biggest area of concern when evaluating new vs. used equipment. In addition to the amount of wear and tear on used equipment, we also have to consider intensity. With more than 40 years of experience in this industry, I have seen operators who treat their machine like a baby while others act like a “bull in a china shop”.

One used machine could truly be in excellent condition while another may have been literally run into the ground. Was the machine properly lubricated as per manufacturer’s instructions? Some people do not change their automobile oil every 6,000 miles nor do they lubricate their embroidery machines as recommended. A tremendous amount of wear can occur due to improper lubrication. How about operator skill sets?  My experience has taught me that novice operators cause the greatest amount of damage to embroidery machines. Crashing into hoops is probably the most common damage. It is best to train multiple people in your shop and continue to supervise each operator until they prove their skills. Chose the person who demonstrates the best skills to become the primary operator.

HINT: When purchasing an additional, new machine, assign your best operator to run the machine. DO NOT turn it over to a trainee.

Used machines can range anywhere from excellent to poor condition. What about the machine’s repair record? Did the owner attempt their own repairs or rely on an experienced technician? Homegrown repairs often are the cause of poor sewing performance and unnecessary machine damage. Was the repair person a “bandage on the symptom” kind of person or truly a precise technician? Also, keep in mind that when a seller choses to get rid of a machine it is often the worst of the lot. If the seller took excellent care of all of their machines, this rule may still apply but to a lesser degree. Also look out for sellers who advertise that the machine in question produced work for companies such as “Disney”, “Harley Davidson” or “Nike”. This has NO DIRECT BEARING on the condition of the machine. This does not mean that there are no good used machines available. Most of the “rough” machines can usually be brought up to par by a qualified technician. It’s just important to factor that cost into the asking price before making a reasonable offer.

3. Obsolete Parts

All embroidery machine manufacturers continue to produce repair parts for some time after each model years ends. Let’s assume that time period is about 7 years. This means that some parts become obsolete and difficult to find. This means that cannibalization may be necessary in order to keep old machines functional. Remember that the older the machine, the closer it comes to having obsolete parts. At some point, an old machine may only be good for harvesting parts or as a “boat anchor”.

4. Watch out for used machines that are offered as “fully reconditioned”

The author of this blog has re-conditioned hundreds of sewing heads over the past 40 years. If you plan to keep an older machine, a full reconditioning will give the machine a new life and add many additional sewing hours. It is less expensive than investing in a new machine, or even a late model machine. However, properly reconditioning a used machine just to sell it is not a wise decision. You will never get enough money from the sale to cover the cost of the reconditioning, plus a book price for the machine. This being said, if a used machine is advertised as “fully reconditioned,” that means that either the seller got the machine for free and may have reconditioned it for the cost invested or, the machine was not truly reconditioned. Were all the needle cases removed and re-built? Were all the needle bar felt packings and “O” rings replaced? Were bent needle bars replaced? Were clutches, solenoids and trimmer mechanisms rebuilt? Were frame drives re-conditioned and re-aligned? These are pivotal questions that should influence your analysis of the machine.

5. Perform a sew test on any used machine

Do not buy any used machine without seeing it perform. If you are not comfortable doing this yourself, hire someone to do it for you. Find someone who knows how to repair these machines to do the evaluation for you. Make sure you see ALL the heads and ALL the needles sew. Let the seller know this before you arrive on site so they can prepare the machine for this demo. Do not accept poor performance with excuses such as: “Oh it probably just needs a little tune up.” Make a list of all the problems, or possible strange noises. Also check for precision stitching with a design of your choice. Choose one that has satin stitches that are about 1mm wide such as small lettering.

New machines come with all brand new parts, properly tuned and regulated systems, warranties and training usually. Out of the box, they are ready to perform and produce world-class embroidery. Of course, the asking price for these machines reflects all of those benefits. For some business models, this is the best choice for equipment. If you and/or any your associates do not possess a strong mechanical inclination you may not have the skill sets to work with the higher maintenance challenges brought on by used machinery. Also, if you consider any machine will be depreciated after approximately five years, the price difference may be less than you think. Assuming that your embroidery pricing reflects that depreciated cost, the price difference between new and used equipment could be negligible on a per 1,000 stitch basis. The only question now becomes, do you have the initial capital or credit line to finance such an investment?

The biggest problem with used machines is establishing a true value. A late-model used machine, in good condition, at the right price, could be a good investment for some business models. If you are mechanically inclined, the higher maintenance probably won’t bother you. If the used machine, in question, was properly assessed by a reputable source and all repairs are tabulated, it is possible to negotiate a mutually equitable value for both the seller and buyer. Provided the buyer is comfortable with the age, condition and performance of the used machine, this could be an excellent way to work on a tight budget.