Used Equipment Purchasing Practices

USED EQUIPMENT PURCHASING PRACTICES

(this article updated 1/16/2020 from training that Blue Lowrance did for us now that Used Equipment purchasing is handled in Odoo)

Purchasing Portal

Transitional Changes:

Due to occasional issues on the website portal, it may be necessary to advise sellers to send their pictures to Purchasing@dentalplanet.com.  Otherwise, the website is always the preferred method for submission. 

Proposals cannot be sent without approval, the option is not available. For this reason, verify all trade offer amounts through Nicholas Whittington prior to providing them to your customer. If you tell them an amount, it may change or be declined altogether.  – these may change in the near future. 

Moderately Eternal Processes:

1. All submissions require pictures, if pictures are not sent they will be requested. Refusal to provide pictures results in automatic denial with limited exceptions to a few technicians/Reps.
2. Used equipment trade proposals must link to the same customer profile. Differences in information result in misaligned deliveries and pick up. Ex: Your customer is Garland Orthodontics, but my submission is StaceyRHS@gmail.com with just Stacey as the name. They’ll be entered as separate customers and treated accordingly.- best practice, Check the box that states vendor when creating the profile. 
3. Submissions are placed in Odoo Purchasing to await approval from the Whittington. If a trade was submitted, don’t assume it was sent. It is in your best interest to badger the Whittington to approve the offer.  Trade offers not sent can create mistrust. 
4. Obtain a down payment on before asking to have an item purchased with cash. If an order hasn’t been confirmed, a cash purchase will not be authorized for items not found to be deficient.- unexpected cash purchases defer large auction purchases of hot items
5. Offers are always made as a credit, unless the doctor indicates he’s retiring, out of business, or we are dealing with other companies’ rep/technician.  
6. Cash offers are 70% of the value of a credit offer but might be more dependent upon the necessity of the purchase. 
7. Offer amounts should not be provided over the phone or chat without a proper submission. Not only will the amount likely be incorrect, or the item declined, the seller may decide not to submit the item.  Some disappointed sellers sell 6 or more months after submission, if we don’t have that submission, we can’t reach out to them. We should not indicate an offer will be made. 
8. EDR items sold need a 4-6 week lead time to ship- not deliver. Once an item is found and purchased it can take up to two weeks to arrive here, then the time is taken for refurbishment, then another 5-10 business days for delivery. 
9. All Digital items must have notes providing estimated offer value and our retail sale value from the digital manager, AKA, the Stewart. If these items are reviewed by the Whittington before notation, they will be suspended until they are noted and it may take several days before they are reviewed again. 
10. Once the Whittington approves an offer it is sent via email. When the message opens, the option must be changed to a proposal or the seller will receive an RFQ instead of a proposal. Doctors will find this confusing and likely result in an unnecessary extraction. 
11. At least 3 follow-ups are sent to the seller and calls for those hotly required acquisitions. Competition for used equipment for refurbishment has grown, which means there are many other buyers making offers. 
12. Negotiating offers with the seller are encouraged, although most doctors will not reply if they found the initial offer offensive. Digital items depreciate at a faster pace than other equipment, which can be used as a negotiation technique. Expect the doctor to become agitated, the more frustration they exude, the more desperate they are. 
13. If a proposal is over 3 months old and the seller returns to sell it again, lower the offer. They lack other options. If they protest, advise them of changing inventory values and depreciation. 
14. When a seller signs and returns a proposal it is then sent to logistics. From there logistics will set up a method of retrieval, determining cost and more. 
15. Once a purchased item arrives here it is inspected against the items listed on the proposal, for non-digital items if they match then they are received, all digital items will be tested. 
16. If incorrect equipment is sent, we may make a different offer. If a digital item cannot be fixed, we’ll offer to dispose of the unit or offer to allow the doctor to pick it up after paying both the freight here and the freight back. 
17. Offers not accepted are canceled after the final follow up. This means if you have an offer that is a trade, be sure to get it noted and/or signed as soon as possible. 
18. Payment is sent (NOT RECEIVED) 30 days after receipt of the equipment on cash payments. Credit availability may be made sooner on items other than digital. Get trade-credit approval for applying to order for items not already here. 
19. Payments have a 3 stage process, signing off by the Reese, then the Whittington then to the Erwin for departure. 
20. Sellers will commonly ignore everything on the proposal other than the amount and call looking for their check. Do not inform the seller of the aforementioned timeframe (#18) for a check without verifying the offer was for cash. This results in assertions of misrepresentation, and though the seller is not necessarily a customer, they can and do leave reviews when they’re incensed. 
21. Supplies are the best option for closing a trade deal. 

General Tips:

1. Make the proposals, send the first follow up within 5 days, after that once per week. 
2. Do a quick google search on questionable addresses. No Doctors office is inside a mail receiving service or a taco stand. We don’t want to waste shipping for stolen items. 
3. There are many look-a-like products on the market, verify make and model. Many are nearly indistinguishable. 
4. If something isn’t approved and no additional information is being requested by management after requesting approval more than once and the seller is demanding an answer, decline to make an offer. To do otherwise results in frustration. An offer can be made in the future. 
5. Equipment to be picked up must be uninstalled. Be sure to mark the checklist properly.  If seller indicates items are uninstalled, and a freight company shows up to pick up the item, we will need to pass on the cost of the attempted pick-up back to the seller.
6. Once a pick-up checklist and the proposal are complete, it will need to be marked accepted and assigned to Logistics to schedule the pickup.
7. If the seller accepts credit, and at some future point requests a conversion to cash, management must make that decision.  Cash purchases are typically 30% less than the credit offer.

CALCULATING OFFERS

Large differences between the average and last offer often means the last offer was likely EDR, always go with the lower average.

When we are considering purchasing something we’ve never had or rarely get it is best to research EBAY and our competitors to find out what they are selling for. In EBAY simply pick the sold radial and the items that show up in green are what they are selling for and an average can be made.  If there is a line through the sale price do not use that in your average, as it indicates the seller accepted a lower offer.

Our costs in the refurbishment process include:

• What you offer the seller to buy the equipment
• The cost of freight inbound (to get the equipment from the seller to us)
• The cost of freight outbound (how much will it cost to ship to a customer that buys it from us)
• Our Labor expense to break down the equipment, assess any issues, order parts to address the issues, prep, paint, upholstery and package for shipping.  Additionally, we bear the cost of any warranty repairs that may be required after the equipment is resold.
• Parts to fix the equipment, paint, upholstery material, shop parts etc. should also be taken into consideration.

We need at least a 30% to 35% profit margin for all other overhead costs, so the proposal price should be no more than 30% of what your research shows that we can sell this piece of equipment for.  If the Item is EDR, we’ll give up to 50% of what it was sold for including freight if it is a standalone item.  If it part of a large order we may pay more

All pricing should have manager’s approval.  Trade-ins need prior approval as well.  Remember, not all items can or should be purchased even for credit, if it has no value.  When customers use their credit towards the purchase of a new item it negatively impacts financials.  Our goal is to make up that negative impact through selling the refurbished item in the future, and that is why every purchase deal matters.