Buying Equipment: Going Once, Going Twice
One of my favorite strategies over the years has been to enhance our facility's existing lines of equipment with used equipment. This should not be done lightly. Used equipment must blend with the pieces you already own, it must be in good condition and you should only do this if you can find a real bargain. Where do you find those bargains? Find fitness centers that are auctioning off their equipment.
Why An Auction?Fitness centers auction their equipment for many reasons. I've been to auctions for large chains that are selling off items they've been keeping in storage, as well as for facilities that are going out of business or downsizing. During an auction, be prepared for anything. I've been in sweltering warehouses for 12 hours at a time (I never thought to bring a change of clothes), gigantic recreation centers (are they ever going to get to the items that I want to bid on?) and neighborhood clubs where everyone outfitting a home gym has come to buy (I just lost the bidding to THAT guy?).
Auction TipsThe keys to any auction are making sure that you can identify the items that are truly worth bidding on, and then making sure you get a real bargain.
My goal is to try not to pay more than 25 percent of the retail value of a piece, and, ideally, pay no more than 10 percent. You need to know the approximate retail price of equivalent new equipment before you start bidding, and you must be able to quantify the cost and effort that will be required to deploy the equipment onto your floor. Just as important, always remember the costs that are not part of the bidding process. Those costs are sales tax, the auction house's premium (10 percent or so), and the cost to transport and deploy anything you win. You must have cash on hand to make a deposit, and you must be able to produce cash or a cashier's check to complete the transaction that day or within a few days (depending on the rules of the auction).
The biggest auction purchase for my facility was an entire line of treadmills that were less than a year old. Even with transportation and storage costs, I saved more than 50 percent off of retail. I've purchased plateloaded machines that looked like new for 90 percent off, and thousands of pounds of plates for pennies-per-pound. (At that auction, the 25-pound plates were auctioned off for more than the 45-pound plates. I got out of the bidding for the 25-pounders right away, as the price sky-rocketed, and then was dumfounded when nobody else bid on the 45 pounders! I guess everyone needs more 25-pound plates.)
Some of the purchases for my facility have simply bought us time. I've found indoor cycles and steppers that I knew were not going to last, but we were able to shine them up almost-like-new, and our members appreciated the extra stations. Some of the best deals I've found were on ancillary equipment, such as the locker room scale I bought for $10, and the stereo I got for $25.
Pros And ConsCertainly, buying equipment at auction is not for everyone. I think it's a great strategy for independent club owners who have a wish list of things they'd like to find. I don't think I'd ever try to buy a whole new line of selectorized equipment at auction because all of the stations might not be up to par, and the break-down and relocation would be a burden. But, individual stations that your members have been asking about, or extra pieces of something that you already have, can be ideal items to pursue.
Contact auction houses in your surrounding area to get on their mailing lists. You might only hear from them once or twice a year, but these events are worth a shot. Be prepared to act quickly, because the notices typically go out only a week or two before the action, and you might have to drive a couple of hours to the location.
In fact, as I have been typing this (and I'm not making this up) an email arrived for an auction next week at a fitness center that is just 90 minutes away. Who knows what bargains await?
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