Best Practices for Buying, Selling and Maintaining Used Laboratory Equipment
BioSurplus’ Director of National Business Development, Dawn Hocevar, was recently interviewed regarding some of the best practices when it comes to pre-owned lab instruments. Take a look below to see what she had to say!
WIB Profile first featured at Outsourced Pharma.
In this Women In Bio (WIB) profile article, Dawn Hocevar, director of national development for BioSurplus, discusses her job, trends in the market for used lab equipment, and best practices to keep in mind when shopping for used equipment. She also discusses what WIB can do for young women entering the pharma and biopharmaceutical industries.
1. Tell us about BioSurplus and you role in the company.
BioSurplus is the industry leader in pre-owned laboratory equipment for the life science industry. We buy, sell, auction, manage, and service pre-owned as well as in-use laboratory equipment. We are able to maximize customer equipment value by providing quality pre-owned equipment at significant discounts, maximizing ROI when equipment is no longer needed, reducing maintenance and service costs, and offering turn-key inventory management solutions.
My role as director, national business development is to develop opportunities that will assist the company in meeting its corporate goals. The business development team acquires surplus equipment and discusses our capabilities with biotech, pharmaceutical and manufacturing firms. The business development managers at each of our megastores, including San Diego, South San Francisco, Boston and North Carolina, report to me.
2. Tell us about a trend you see occurring in the market for used pharmaceutical equipment.
The life science industry is maturing and firms are looking for ways to increase efficiencies wherever possible. Investors are making smaller, results-based investments and bio-pharma companies, research institutes and universities are seeking to reduce costs and increase productivity throughout their organizations. Thus, companies are seeking ways to stretch their equipment dollar and maximize the value and productivity of their instruments, whether buying, selling, servicing or managing their current inventory.
3. When purchasing used equipment, what should pharma companies look for in a supplier?
- I believe life science companies should consider all of the following factors when shopping for used lab equipment:
- Is the source of the equipment a reputable company? How long has it been in business?
- Is the company rated by the Better Business Bureau?
- Does the company have a return policy to help lower your risk?
- Does the company offer guarantees and warranties and stand by them?
- Is it possible to see the equipment before you buy to check the overall condition? Some vendors have a showroom where you can view the equipment; others might be selling out of a garage.
- If something goes wrong with the equipment, does the vendor have a repair service?
- Does the company have knowledgeable sales people you can talk to and who can understand your business and help determine your equipment needs?
- What is the source of the equipment? Did it come directly from a working lab or was it acquired via an auction with the condition of the equipment unknown?
- Companies should also consider the full cost of acquisition, not just the initial purchase price. Are there repairs that need to be made? Will you need to purchase a software license? Does the equipment need professional installation? A good company should be able to help you understand the full cost of ownership.
4. Do you have any advice for pharma and bio companies that have used equipment they are not using
Researchers generally like to hang on to their equipment in case they need to use it again in the future. Unfortunately that equipment can begin to accumulate and before you know it, their labs can start to look like they belong on the reality TV show Hoarders. The downside of hanging on to unused equipment is that the value can rapidly decrease over time and by the time they decide to sell, the equipment is old and the only option for it may be scrapping. Also, when buyers discover that equipment has been sitting in a warehouse or storage container for years, it increases their risk factor and will lower the price they are willing to pay.
A best practice companies can establish is to have a process to regularly identify and determine the disposition of surplus equipment while it still has value and the technology is still valid in the marketplace. The overall return is subject to the type of equipment, but a good rule of thumb is to dispose of surplus equipment within ten years of the manufacture date. Keeping service records is also very helpful. Potential buyers will pay for the value of knowing that equipment was continually serviced and kept in good condition. Knowing the equipment came from a working lab and has good service records will lower a buyers’ overall risk and increase the sellers’ return.
5. Are there costs involved with maintaining and inventorying equipment that companies must consider?
Yes, and those costs are increasing. This is another challenge that biotech and pharmaceutical companies face today. Most companies have expensive service level agreements and preventive maintenance packages with manufacturers that cover everything from typical repairs to rare breakage issues. Companies often have a difficult time determining the true benefit of these packages. I find companies today are looking for more cost effective solutions where they only pay for what they need. In addition, companies are seeking software programs to help them inventory and track their equipment. A good inventory management system will track assets and provide access to real-time data on the service and repair history.
6. Tell us about what Women In Bio (WIB) means to you and how it has helped you in your career.
WIB is a women’s organization that focuses on the professional development of women in the biotech industry. They sponsor events that offer advice to women at all levels in their career. From student to C-level, there are programs to help women advance in their careers. What I really love about WIB is that members and the women who come to the events genuinely want to connect, share their stories, and help young women explore a career in biotech.
There was a survey done by the Harvard Business Review about women breaking through the glass ceiling. Women enter the white collar work force at a higher percentage than men (53% to 47%) yet women compromise just 3% of Fortune 500 CEO’s and only 7.6% of Fortune 500 top earners. When it comes to promotions, 83% of men readily acknowledge that who you know counts as much as how well you do your job. However, 77% of women believe that hard work and a good track record are most likely to drive promotions. I believe both are important and that women need to place a greater focus on speaking up for themselves, acknowledging their accomplishments to peers, and utilizing the human capital sphere of influence to get jobs and promotions.
One focus of WIB is to teach young women to assert themselves and find mentors to assist them in their careers. WIB has given me the opportunity to meet many talented, bright women that are eager to share their successes. Many young women are looking for guidance and I enjoy meeting them and sharing my personal experiences. When I began my career in the life science industry, the company I worked for had one female manager and 70 male managers. During overnight sales meetings the female manager was escorted to her room each night before the men continued to network well into the evening. We have come a long way, but the glass ceiling is still firmly in place. WIB is a valuable resource to keep women moving forward and upward.
The women that volunteer in WIB chapters come from all facets of the life science community. It is particularly rewarding to watch women that have never held a leadership position or organized an event step up and join a team and take on roles that expand their growth not only professionally but personally. It builds character and gives them confidence that they can share with peers as well as their family and friends.