When you have idled surplus equipment available with you, two things can be done with it – Keep it idle, or sell it and make money. The second option sounds more interesting, doesn’t it? Most of the companies, therefore prefer selling used and surplus equipment. The money got from selling the equipment can then be used on new projects. On the other hand, if the equipment is kept idle, it is not that much beneficial, too. Considerable cost saving opportunities can be reaped by selling idled equipment. What are these opportunities? Read on to know.
Opportunities from Selling Surplus Equipment
When you opt for selling the idled or surplus equipment, you can reap a lot of cost-saving opportunities. Here are five major opportunities that can be obtained:
- Avoid New Purchases: Sometimes it may occur that an equipment is kept idle in one area of a plant, but someone somewhere is looking out for the same equipment for their requirement. It might also happen that your manufacturing network is on a lookout for the same equipment, and you have it sitting idle in the warehouse. So, before you decide to sell this equipment, ensure that no one else from your network needs it. This can be done with the help of some coordination. To cut the long story short, if you sell you make money. If you or your network requires the equipment you keep it, and avoid new purchase, thus saving money. It is a Win-Win situation.
- Eliminates the Storage Space Cost: Storage of equipment consumes space. Consider the surplus equipment kept idle in the storage place. The equipment is of no use, and thus is using up the storage space for no good. If you decide to sell this idle equipment, you can utilize the space for some other purpose. You may get some more manufacturing equipment in that space, or use it for operations or other purposes. Every space, including the storage, as well as the manufacturing space has a cost. When you get rid of the surplus equipment, you naturally save yourself some storage space cost.
- Property Taxes and Insurance Costs: You are required to pay property taxes on all the equipment that you have. According to several jurisdictions, if you no longer possess the equipment, you are not required to pay property tax. When you sell this surplus equipment, you save yourself from insurance costs and taxes that otherwise you have to pay.
- Maintenance and Repair Costs: Every equipment needs a regular maintenance and servicing to keep it in a good working state. Various materials and spare parts are required for the servicing of idle equipment, which consumes cost. Besides, there is no point servicing an equipment that is not used, and would not be used in the future by your company. By selling this surplus and idle equipment, you cut down the maintenance and repair costs.
- Cuts Down Depreciation Expenses: Equipment depreciate over time. The value of the equipment goes on depreciating. In case of idle equipment, you are required to bear an unnecessary expense. Besides, the idle equipment does not generate any income for a company. By selling this idle and surplus equipment, it helps cut down on the depreciation expense.
When you decide to sell surplus equipment, you make way for the cash to flow into your business. This explains the cost-saving opportunities that you get by selling surplus equipment.
