Should You Buy Used Equipment to Reduce Your Costs?

Buying used warehouse equipment can be an effective way to reduce upfront project costs, but a lower purchase price does not always mean a lower overall project cost. The right decision depends on whether the used equipment meets your operational requirements and provides enough savings after any additional costs are considered.

For operations professionals evaluating storage improvements, the question is not simply whether used equipment is cheaper than new. The more important question is whether used equipment provides the right value for your specific application, now and in the future.

This article examines when buying used equipment can make financial sense, when new equipment may provide greater value, and how to evaluate the long-term financial impact of the storage solution you choose.

When Can Buying Used Equipment Reduce Costs?

When Available Used Equipment Matches the Operational Requirements

The most obvious advantage of buying used equipment is the potential for a lower initial purchase price compared with new equipment. However, the purchase price is only one part of the equation. The value of used equipment depends on what is required to turn that equipment into a functional storage system.

Reusing Existing Equipment

Used equipment can make financial sense when a facility already owns storage equipment that remains suitable for its needs. Rather than replacing usable equipment during a relocation, redesign, or expansion, companies may be able to incorporate it into a new storage system.

This approach can help preserve the value of an existing equipment investment while reducing the amount of new equipment that needs to be purchased. In some cases, existing equipment can be combined with new components to create a storage system that meets the facility’s current requirements.

Read this case study to learn how an ecommerce company had their existing rivet shelving system disassembled, transported from Illinois to New York, and reinstalled into a new system design integrated with new components.

Supporting Incremental Growth

Used equipment can also be valuable when a company’s storage needs evolve over time. Instead of treating each increase in storage demand as an entirely new project, a company may be able to expand or modify its existing storage system as requirements change.

One injection molding manufacturer provides an example of this approach. Over nearly two decades, the company worked with REB on 17 storage projects as its needs changed. Rather than starting from scratch with each project, existing equipment could be evaluated and incorporated into new layouts when appropriate, while additional equipment was added as needed. In one project, existing rack was rotated to improve space utilization and increase storage capacity.

This type of incremental approach can help a growing company adapt its storage system as its operation changes while continuing to get value from equipment it has already invested in.

Read the case study to better understand how they evolved through multiple projects over time.

When Might Used Equipment Not Be the Most Cost-Effective Choice?

Consider the Total Upfront Project Cost

Used equipment is not automatically the less expensive option. A lower equipment price can lose its financial advantage if the equipment requires significant modifications, additional components, repairs, or installation work.

Used equipment may not provide the expected savings when:

• The available dimensions do not match the facility or storage requirements.
• The equipment does not provide the required load capacity.
• Components are incompatible with an existing system.
• Additional components must be purchased to complete the system.
• Equipment requires repairs, reconfiguration, or modification.
• Transportation, removal, or installation costs reduce the initial savings.
• The available equipment forces compromise in the warehouse layout.
• The equipment does not support the required inventory accessibility or operational flow.

In these situations, new equipment may provide a more straightforward path to achieving the required system.

The important point is that used versus new should be evaluated based on the total solution required, not simply the price of the equipment.

Consider the Long-Term Cost of the Storage Solution

The type of storage system you choose can also affect warehouse performance long after the equipment has been installed.

Storage systems influence how inventory is accessed, how far employees and material handling equipment need to travel, how much inventory can be stored within the available space, and how efficiently products can move through the facility.

This is why selecting a storage system based solely on the lowest upfront equipment cost can be shortsighted. A less expensive system that does not align with the facility’s operational requirements may create inefficiencies that continue throughout the life of the system.

Consider two storage solutions that can both accommodate the same inventory. One has a lower equipment cost, while the other requires a larger initial investment but provides greater storage density or more efficient access to inventory.

The lower-cost system may save money at the time of purchase. However, if the system requires more labor to pick and put away inventory, uses more floor space, or limits throughput, those operational differences can affect the warehouse’s costs over time.

Before You Buy Used Pallet Racking

If you have determined that used equipment could make financial sense for your project, the next step is evaluating the specific pallet racking available for purchase.

Used pallet racking requires careful consideration of storage requirements, dimensions, load capacity, component compatibility, condition, documentation, and building requirements. It may also be possible to combine used and new components to create a system that meets the needs of the facility.

For a detailed look at what to evaluate before purchasing used pallet racking, read our Expert Used Pallet Rack Guide: Purchasing Used Warehouse Racking.

Consult REB’s Experts to Make the Used-or-New Decision

Used warehouse equipment can reduce costs, but the savings should be evaluated in the context of the entire storage project.

The most cost-effective solution is the one that meets the facility’s operational and storage requirements while providing an appropriate balance of equipment cost, installation requirements, compatibility, flexibility, and long-term usability.

REB Storage Systems can help evaluate storage requirements, determine whether available used equipment is appropriate, and develop a complete storage solution using used, new, or a combination of equipment. Our team can also provide system design and project management to help move the project from equipment selection through implementation.

If you’re evaluating whether used equipment can reduce the cost of your next warehouse project, contact REB to discuss your requirements and available options by calling (800) 252-5955 or filling out the contact form on this page.