Extensive additions, as reported in this issue of Surplus Record, have been made to the plant of a concern whose business it is to rebuild construction equipment. The estimated total cost of the improvements amounts approximately $250,000. This large amount surely would not have been placed in buildings if the business had not warranted such an investment. No longer is the reconstruction of used equipment a shoestring business. The day of the wood shed, housing the office and shop, together with the open air repair department has passed.
Not only has this company increased its plant area but the operating efficiency gained thereby has almost doubled the output. In the case of this one concern its activities resemble the work of a highly efficient industrial concern. Its product vies with newly manufactured equipment.
From this we gain a feeling of strength and stability which puts the used and surplus machinery and equipment industry in a class almost on a par with other long established industries. It remains only for a few other companies engaged in the rebuilding business to recognize the desirability of modern plants and industry will acquire a rating comparable with any other line of endeavor.
Supply and Demand
Economic demand is without doubt the most important factor in price determination. The old law of supply and demand is still the modern axiom of business, but has been destroyed to some extent by the increased production of all commodities. However, production has by no means reached the saturation point. In the used and rebuilt equipment market demand dominates supply. Prices of new machinery are based upon a somewhat restricted productivity. Used equipment is not restricted by supply in its price determination. Demand alone is the determining factor.
A dealer having a piece of construction equipment or machine tool relies greatly upon demand in making up his price. Rarely does he have to wait upon the availability of the machine or tool to fulfill the order. It would be uncommon for a dealer to bid for a machine which is in actual service in a manufacturer’s plant, in order that the dealer might have it available to fulfill a requisition from another manufacturer. The elimination of the factor supply from the law of economy serves as a means for its lower prices resulting in economic purchasing.
Read the Paper
For the past few issues we have carried a section devoted to the dealers, what they are doing and how they are doing it. It has been the most part contained descriptions of catalogues, bulletins issued and of purchases made. While departmentalized journalism may have its place in the scope of any publication, “Among the Dealers,” is not written for the exclusive perusal of those about whom it is written. It is hoped that all readers will find interest in this section in order that they may become better acquainted with the dealers and the work they are doing