5 Factors that Influence the Depreciation Rate of Mechanical Equipment | Tips for Buying Printing-related Machinery and Equipment with High Resale Value

5 Factors that Influence the Depreciation Rate of Mechanical Equipment | Tips for Buying Printing-related Machinery and Equipment with High Resale Value

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    Apart from inquiries for new machines, many customers also inquire if SBL machinery has any used machines for sale. SBL’s post-press equipment, including Die cutting, Folder gluer, and Hot stamping machines, not only retains value well in the second-hand market but is also in high demand. Once the sales information for these machines is released, they are usually sold to customers or agents within about a week.

    Some customers might ask why SBL’s machines hold such a high resale value in the second-hand market. Is it advisable to assess and make purchasing decisions based on these factors to acquire printing-related mechanical equipment with excellent retention rates?

    The theme of this issue is to explain five factors that influence the depreciation rate of machinery and equipment. One objective is to help everyone make purchases of printing-related machinery and equipment that retain their value well. The other goal is to assist you in accessing suitable information about second-hand printing-related machinery and equipment. This way, we can prevent any losses due to disparities in buyer and seller information.

    1. Brand


    When companies make purchasing decisions and aim to evaluate a high retention rate of machinery and equipment, there is often a misconception: opting for a low-priced or seemingly cost-effective machinery may not reveal significant differences in the first 3 years of operating the new machine. Around 3 years later, it transitioned into the maintenance stage, and that’s when I began to grasp the concept of ‘penny wise, pound foolish’.

    In fact, determining the value retention of printing-related mechanical equipment involves a crucial key element, which is not the initial purchase price, but rather the ‘brand’ of the machinery and equipment. Please remember the significance of the ‘brand’ as it holds particular importance. Now, let’s explore why the ‘brand’ plays a pivotal role. The main reasons are as follows:

    1.1. Country

    Brands are frequently linked to their country of origin, 
    for instance, Bobst is from Switzerland, Heidelberg from Germany, and SBL from Taiwan.
    The relationship between a country and the machinery’s quality, durability, performance,
    and yield is elaborated in the previous article titled ‘10 Selection Indicators That Machinery Manufacturers Won’t Disclose (Part 1).’
    Typically, machinery from countries like Switzerland, Germany, Japan, and Taiwan retains higher value and is in demand within the second-hand market.

    1-2. Word of mouth

    Some customers may question the reputation part,
    if it is not in a certain field for a long time,
    how to know which machine manufacturers in this field are more marketable?

    Of course, if you ask each manufacturer,
    they will show their good side to the customer to explain,
    in fact, it is more difficult to see the clue or distinguish the difference.

    To gather information about the reputation of machine manufacturers in a particular field,
    you can inquire with technicians who have extensive industry experience and have operated various machine equipment.
    Additionally, multi-brand second-hand equipment dealers can provide insights into the actual market sentiment.

    1-3. Market History

    Taking SBL machinery as an example,
    the company has been in operation since 1968,
    producing and selling Die cuttingFolder gluer, and Hot stamping machines.
    With a 55-year history, SBL has earned a reputation for producing machinery and equipment with high value retention.
    Most such manufacturers typically undergo two or three decades of market operation to accumulate customers,
    establish a strong reputation, and gradually gain traction in the second-hand market.
    Consequently, if a brand’s machinery and equipment has only been in the market for a short period, say one or two decades,
    the likelihood of achieving high retention rates becomes very slim.

    2. Durability of the machine

    Internal cams-diecutter

    Theoretically, the longer a machine’s service life, the slower its depreciation rate. 
    Taking SBL machinery as an example,
    the company follows an operator-oriented and craftsman approach in manufacturing each machine.
    When the machines are properly maintained and operated,
    they can maintain a certain level of quality even after 10 or 20 years, retaining their performance and productivity.
    This is a significant reason why new SBL machines or equipment do not experience substantial price discounts.
    As a result, SBL machinery, including Die cutting, folder-gluers, hot stamping machines, and other post-press related equipment,
    holds its value well in the second-hand market.

    Of course, some procurement personnel or business decision makers may counter with the argument that they prioritize the price and functionality of the purchase,
    considering the machine’s durability as less significant for their evaluation.
    However, they overlook a crucial evaluation factor – the ‘retention rate.’
    Brands like SBL machinery have a long-lasting durability,
    and even after being in use for 10 years,
    their machines still command high demand and prices in the second-hand market.
    On the other hand, second and third-line post print equipment from China typically retains a meager residual value of about 2-3 years.

    Some customers mistakenly believe that buying low-cost machinery and equipment is cost-effective,
    but in the long run (5-10 years), they realize that the seemingly economical choice results in significant losses.

    As for the machines produced by the same post print equipment manufacturers,
    why is there a significant difference in durability? The main reasons are as follows:

    2.1. Source of Core Components

    Well-known European and American Brands vs Low-priced Mainland Brands

    2-2. R&D Team Capability

    Product Optimization or Problem Improvement

    2-3. Strict Assembly Procedures and Quality Inspection Requirements

    Abnormal Proportion of Machines

    2.4. Logistics Service Capability

    Impact on Durability Life, Detailed in Item 4

    3. Market share


    According to carlogos data,
    the top three car brands with the highest sales volume in the world in 2022 are Toyota from Japan, leading with 10.48 million units (achieving the top spot in sales for three consecutive years),
    followed by Volkswagen Group from Germany with 8.3 million units,
    and Hyundai Motor from South Korea with 6.84 million units.
    It is also widely known that Toyota’s second-hand market experiences a low depreciation rate and maintains a high value preservation rate in various countries worldwide.

    When we revisit the printing-related machinery and equipment industry, the same principle holds true.
    While each country or region may have its own distinctions,
    each brand will experience different market shares relative to one another.
    Particularly, in countries or regions where a specific brand model enjoys a substantial market share,
    the higher number of customers in the market results in a relatively lower depreciation rate for the machinery.
    Consequently, this leads to a higher retention of value for those machines.

    4. Maintenance logistics service system

    A printing-related machinery and equipment with a low depreciation rate and a well-rounded maintenance logistics service system are essential for satisfying most customers.
    Yet, when buying a new or used machine, you might wonder how to assess the manufacturer’s maintenance logistics service system.
    The editor proposes evaluating it based on the following criteria:


    4-1. Warranty duration

    • Warranty duration (usually one year) for new machines.
    • Warranty period for used machinery (typically slightly shorter than the warranty period for new machines).
    • Items covered under the warranty and their inclusions during the warranty period (main motor, belt, PLC, etc.).

    4-2 Number of distributors or agents distributed worldwide

    Regarding the number of distributors or agents distributed worldwide,
    having a local agent or dealer where the customer makes the purchase is considered the ideal situation.
    Theoretically, it should lead to better cost and timeliness of maintenance.
    However, if there are no distributors or agents in a particular country, one must also consider the proximity of adjacent agents or dealers with service capabilities.
    Therefore, a higher number of dealers or agents worldwide for a machinery brand would likely result in higher relative value retention.

    4-3 Limitation of Repairs

    During my frequent interactions with SBL customers, 
    I discovered that some of them had previously bought machines from other manufacturers.
    Yet, when they made subsequent equipment purchases after two or three years,
    they chose to return to SBL iron powder.
    These customers candidly complained about the subpar maintenance efficiency they experienced with other manufacturers,
    often facing delays in maintenance schedules and prolonged wait times for parts.

    4-4 Quality of Maintenance Services

    I’m not sure if you’ve encountered a similar situation,
    but it’s quite common that when you buy expensive products,
    the sales staff’s enthusiasm and top-notch service can create a positive brand impression.
    However, when you need maintenance or service at a later stage,
    interactions with technical or service representatives might not meet your expectations,
    leading to a less satisfactory experience.

    At SBL, we instill a uniform education and training philosophy among all our staff,
    be it front-line sales personnel, back-end service contacts,or maintenance technicians.
    We emphasize the importance of maintaining a positive and humble service attitude,
    similar to that of our sales representatives, as we believe it reflects the company’s image and intangible offerings.
    For example, SBL’s maintenance technicians and service representatives,
    before embarking on any maintenance trip,
    take the time to understand the client’s issues and prepare necessary spare parts.
    During on-site maintenance,
    they not only address specific repair problems but also conduct thorough checks to identify any other parts that may need replacement.
    When possible, they collaborate with the customer to assess the overall health of the machinery,
    providing detailed responses to address daily operational challenges or concerns.

    5. The ability to purchase second-hand machinery from the original manufacturer


    In the printing industry, not every original factory is open to buying second-hand equipment.
    Before purchasing a new machine or a used one,
    you can consult the brand manufacturer or agent’s business personnel,
    about the possibility of selling the machine back to the original factory in the future,
    in case of company expansion or downsizing.
    If the original factory shows interest in repurchasing the machine,
    it indicates that the machine has good quality.
    Moreover, it implies that the machine retains higher value in the second-hand market.

    In fact, you can go to different original factories, agents, and traders to find out.
    For some printing-related machinery and equipment with a relatively low price for new machines,
    even the original manufacturers are not willing to buy back their own second-hand equipment,
    because even if the machine is only used for 3 to 5 years,
    there are few people interested in the second-hand market.


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