10 tips for buying cosmetic lasers
January 08, 2015
Over the years, I have bought and sold thousands of new and used cosmetic lasers, IPLs, RF, microderms, camera systems and other energy-based devices. Not all transactions have gone well. This is a young, fast-growing industry, and it’s attracting more businesspeople every day.
Because it’s a young industry, it’s a little like the Wild West; there are a number of unfamiliar obstacles to overcome and challenges to face. Knowing about these in advance increases the likelihood of your success.
Some of these obstacles make it hard for companies to survive and as a result, I have noticed an above average rate of business failures in this space. That turnover means a high volume of used equipment is always on the market.
What follows are 10 tips others have learned the hard way. I hope you find them helpful in avoiding the same lessons.
1. Businesspeople have to make educated decisions. It’s important to consider which manufacturer and model will best compliment your business. Go online to check out reviews and ratings for the equipment you’re considering for purchase. Some effort here can potentially save you a substantial amount of money and time in the long run.
2.Explore used options responsibly. I’ve never met a salesperson that claims to sell the second-best machine and all salespeople are paid to convince you that their machine is the best. I’ve seen tremendous turnover of sales personnel in this industry.
It’s my opinion that new machines are oftentimes similar to slightly older ones, and the so-called improvements are dubious. The technology hasn’t changed that much. There have been minor advances but sometimes, the juice is not worth the squeeze when it comes to buying the more expensive new unit.
Depending upon the situation, some machines are better than others, but the purchaser needs to spend time to learn about the product and compare it to other products in the same market space.
This head-to-head comparison inevitably leads to considering used equipment. However, buying used equipment has its own challenges.
3. Take your time, do your research, ask questions, and make sure that the machine you’re buying is what you need. Don’t pay for things you won’t use and don’t buy something that doesn’t meet your needs.
Compare new to used to determine if the used unit will meet your needs.
4. When it comes to used, remember that not all vendors are created equal. Do your homework. Make sure that you buy from a vendor that can provide you with after-sale service. Check out their ratings on the Internet. Thanks to the Internet, you don’t have to rely on just the references provided by the vendor.
If possible, visit the vendor’s place of business. Meet their service engineers. Ask them how many units they have under service and how they handle spare parts when needed. Ask them if they can train you. You can also do this remotely via services like Skype or FaceTime.
5. Whether you’re buying new or used, compare price and features head-to-head. Machines can vary in price considerably, so make sure you don’t overpay. When you compare the features of one machine to another relative to the price, you will determine the best value for your money. In the long run, you increase your chance of success by keeping your start up costs low.
6. Get it in writing. Whatever your deal is, write it down. Don’t rely on your memory or the handshake of the person you’re doing the deal with. Don’t allow this written document to be vague but instead, describe things as specifically as possible. What will the machine do, what is the warranty, what is the response time, what will service cost after the warranty has expired?
7. Is all fair in love and war? Some manufacturers make it difficult or impossible to resell their laser. Before allowing a laser to go under a service contract, some manufactures force the secondary buyer to recertify the laser. This rectification cost can be exorbitant.
I sometimes wonder if this rectification policy is an effort to steer the client towards purchasing a new machine. In fact, this policy is bad for the customer that wants to buy a used laser, but it’s also bad for the customer that originally purchased the machine new. If you are buying a $100,000 automobile, you want to know that it will retain its value so that in five years, when you’re ready to buy something new, you can trade it in. If the automobile company forced the second buyer to recertify the car before they would agree to service it, then most buyers would probably buy a different car. Knowing a laser cannot be resold also has to have an impact on the leasing companies. If you want to finance your laser, the leasing company is going to charge a higher interest rate if they know that the unit has no residual value in the event of a business failure or at the end of the lease.
8. Plan your endgame when you purchase. I always advise businesspeople to reach an understanding when buying a new laser that when the customer decides they want to sell their laser, if the system has been maintained under warranty or service, there should be the potential to transfer that warranty or service. If the manufacturer takes the counterintuitive position that they will charge you to keep the machine operating according to their OEM specifications, but on the day you sell it, it no longer meets those specifications, then my advice is to look for a different manufacturer.
9. Reach an understanding with the manufacturer when you buy that you have the freedom to buy used handpieces in the open market and use them on your machine. Again, work out in advance that there is nothing preventing you from purchasing accessories in the open market and that it does not void the warranty on your unit.
Make sure you have the right to buy consumables in the open market as well.
10. Make your voice heard. The most mature capital equipment manufacturers have learned the value of an active secondary market. Whether it’s selling cars, diagnostic imaging equipment, or construction equipment, good companies welcome and embrace an active secondary market.
Most manufacturers understand that new companies just starting out need to purchase used equipment from time to time. They look on each of these facilities as a “socket” that at a later date they can convert into a new-equipment customer.
Mature market manufacturers want their equipment in the field to operate correctly and most are proud when their equipment retains its value.
However, it’s been my experience that laser companies are exactly the opposite. They discourage the sale of used equipment by charging recertification fees that can be as high as $35,000. They make it difficult to buy spare parts. Sometimes, they make it impossible to buy software or the necessary licenses.
As a culture, we’ve succeeded in making people live longer, which means the market for cosmetic devices will grow. Let manufacturers know how you feel and encourage them to discontinue these counter-intuitive policies that hold everyone back.
About the author: Scott Patrick Carson is managing partner of Healthcare Investment Advisors. HIA buys, invests in, and develops growth businesses, partnering with world-class management teams to build value for its investors through operational improvements, growth initiatives, and strategic acquisitions. Carson has 30+ years of marketing, business development, sales and management experience primarily in health care transactional platforms.