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Featured Article By Dawn Prebula*

Planning a Major Purchase? Ask the Right Questions.

You are about to buy an expensive piece of capital equipment. It doesn’t matter what it is – an ice machine or a greens mower. What’s your first question? How much does it cost???

Too many times that is also the last question before we make a decision to buy. Of course you might take into consideration some other features such as brand, make and model. But are we truly looking at the Total Cost of Ownership?

Total Cost of Ownership Factors

What does that mean? Price is not the only consideration when determining the right piece of equipment. Of course it has to deliver on performance. But there are many other considerations that need to be evaluated before making your final choice.

For instance, how long will this equipment last? If you divide the life expectancy of the equipment by the selling price you might actually find that spending a little more up front for the better brand or model is cheaper than the less expensive model.

Look at all the benefits offered as part of the selling price to determine quantifiable differences. For instance, a longer warranty might equate to lower maintenance costs.

Ask about any supplier benefits the supplier may provide such as training support, marketing materials or samples. Can they help with menu or other printing needs? What about contest and incentive prizes for member events or co-worker contests?

Be sure to consider the payment terms. Many companies offer flexible payment plans that could save money over the life of the equipment.

And finally, if you are giving them YOUR business, don’t be afraid to ask for THEIR business. Many suppliers use clubs for entertaining, tournaments, meetings and company social events.

Bottom Line

Even when money is tight, not all capital purchases can or should be put off. In these times, though, it is particularly important to do your homework before you do the purchase. Be diligent to the Total Cost of Ownership model and you will ensure you have made the right choice at the right price!

Credits

Originally posted by DawnPrebula on 13 Aug 2008.
All contributors: DawnPrebula, LynnwoodBrown, MichaelBrezin,
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