NFIB

Tips for Purchasing Expensive Equipment
11/ 19/ 2002

by Jeffrey Moses

When making a large purchase such as business vehicles, computers and other office equipment, certain guidelines need to be followed to receive the best pricing and make the best decision.

First, determine all features required in the equipment to be purchased. Before contacting vendors, consult with your staff to establish exactly what they need. Then go online to review available models and receive rough pricing according to varying features.

Second, prepare a sample purchase order, containing all information that vendors will need to know about what you want to buy. This will serve as the basis for obtaining price quotes. The information should be complete and accurate, with model numbers and features defined when possible.

You can sometimes save money by purchasing used equipment or models that have been available for some time and are no longer considered state-of-the-art. By determining exactly what features you need, you can accurately evaluate the relative cost versus feature comparisons of purchasing used or older-model new equipment.

It's important to receive bids from three or more vendors. Even if you've been working with a vendor for years, you need to widen your scope when making a large purchase. Send vendors your sample purchase order, and let them know you are also sending the information to two or three other companies, so theyÆll know youÆre looking for competitive pricing.

When speaking with vendors, request additional information along with the price bid. Service and warranties are important for most expensive equipment, and you'll need to throw these into the equation when making a decision. Also, ask to see all product brochures or videos.

Intangible services provided by the vendors can be extremely important in the long run and should be considered when making your choice. These intangibles include delivery and installation, speed of repair service, ongoing maintenance programs, technical information hotlines and on-site evaluations of problems.

When you've received formal bids from the three or more vendors you've contacted, you and your staff should compare the offerings. Prices at this point should not be considered final. Negotiate--then negotiate again. Remember, add-on services can be part of the negotiations. For example, you might give up a little on price if maintenance service is provided at no charge or some degree of custom work is performed so that the equipment meets all your needs.

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