Buying New

You have more control than you know.

Whether or not you have professional purchasers in your organisation not all of them are focussed on the performance of companies and when it could be more advantageous for you to start negotiating.

As you know discounts are not only price reductions. Discounts are also maintaining as much value in the technology you buy as possible. That is if you re-sell it. 

Buying from the loudest manufacturers

So, you have decided to buy from the companies who are the 'best' or 'the worldwide suppliers of science' or the 'only option available' etc.

They never discount, they have control of the process as they have what they perceive as the best or only version of the technology that will get results for you better or faster than anything else. But they are also the most expensive.

The following stories happened with our company a few years ago. At the time we were a significant supplier and technical service provider for high throughput capillary sequencers.

 

 

Instrument Purchase

A company from southern Germany called to ask for pricing and learn more about our company. They had called the manufacturer the day before and were awaiting a call back.

They had no experience of buying a pre-owned instrument, preferring a new system although that was at double the price. They knew our service engineer who would be responsible for the instrument if they bought from us. However they preferred a new system.

A week went by, no contact from the manufacturer, so they called back asking for a quotation. Another week still no quotation. As they were desperate to get the instrument they decided to order a pre-owned, refurbished system.

The system was delivered the following week. When the engineer unpacked the instrument from the crate, they commented that it looked new, although it was pre-owned. 

That afternoon they received an unscheduled visit from the manufacturers sales person. They sat him down as he proceeded to tell them that they had no choice but to buy from him, he then asked when could they place the order.

The lab manager, explained they would not be placing an order with him and told him she wanted to show him something. She took him to the lab where the engineer was installing the instrument. He was then politely told it was time for him to leave.

Software Licenses

A customer were threatened by a manufacturer with demands that they pay for a software license after they bought a pre-owned and refurbished genetic analyser.

They did not have funding for a new system so they went for the alternative of pre-owned.

The legal department of that institution did not appreciate the threats. Neither did we as the supplier. So we investigated the basis for the threat.

It turns out within the European Union if the software is an integral part of the instrument, then that paid software license follows with the instrument if it is sold.

However the software must be original, as to copy software would be software piracy.

The customer had original software.

As a consequence, the institution decided wherever possible if they received funding to buy new technology, they would not purchase from the loud company that incorrectly threatened them especially at a time when their funding was limited. They were looking for help. 

Service Contracts

There are often alternative technical service providers to the manufacturer. We had the following experience. The manufacturer (who had no real knowledge of our organisation) decided to prepare a 'battle plan' to discredit the service we provided. 

A large forensic service company had instruments and service contracts from us for their research site. It was time for their annual service contract renewal in the production site.

We provided a quotation, which was approx 35% less than the manufacturer. The production site for that company had a criteria for service contracts, they would only use the manufacturer. The manufacturer, never asked the question, all they knew was that another company was quoting for the business. So, they quoted with a 50% discount. They panicked. The forensic service company was incredibly happy. They used an opportunity to highlight they had an alternative and get a fairer price, although they would never have used the alternative for the production site.

So What!

The so what is that you have much more control over many of the companies that perceive they have the only game or service in town. 

USA based stock market listed companies especially, have a lot of pressure on them from their investors. They often set huge expectations which are sometimes difficult to achieve. You can use that to your advantage when your budgets are limited and you need to make savings. When you are told there is a no discount policy, that is not always true. 

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