CNC machines are an important part of any manufacturing plant, but they are also a great investment, especially when you buy used ones. These machines are known to be the most important helpers of manufacturing businesses in creating products that need critical engineering, like those in the aerospace and automotive industries.
When you buy a new CNC machine it may not become a great deal investment-wise as the upfront cost of buying it will be pretty high and also in the next few years a machine faces severe value depreciation. So, buying a used one can break that upfront cost barrier for you and has more probability to give you better returns in a short period of time. If you want to know how fast you can make money out of used CNC machine investment, then let’s continue with us till the end of the blog and we will discuss everything.
Why Used CNC machines?
The first question that we need to answer is why you should prefer used CNC machines as an investment option over the new CNC machines. We have talked about the first and the biggest advantage of a used CNC machine which is a lower upfront cost compared to new ones. Also, in used CNC machines, the value depreciation is slower compared to the new ones. Most of the price value of a CNC machine gets depreciated in the first few years only.
But other than just the purchase price there are other benefits of getting a used CNC machine too. The operational history of the used CNC machines is also a great boost as the new owners get to know about the details of the machine, they can understand if there is any problem with any particular part of the machine.
The revenue generation
When calculating the ROI of a CNC machine you shouldn’t just look at the reselling price you are getting for the machine but you need to take into consideration the total revenue generated by the machine with its operations. Here’s how the revenue generation by a CNC machine gets influenced –
- Production capabilities – The volume of products that you can make with one CNC machine is the single most important factor to be considered while calculating the revenue generated from the CNC machine. To maximize these factors, you can look for machines that are capable of working with different materials and do several types of engineering work. If you are looking for any such specific machine, you can fill out our machinery locator form and we will help you out.
- Product quality and market pricing – The next two factors that can decide the revenue generated by your CNC are the accuracy of product machining and the selling price of that product. For accuracy, we can advise you to choose machines with high spindle power and a strong body so that it doesn’t shake much during the machining process.
Factors affecting the speed of ROI of your CNC machine
The time between you purchasing a CNC machine and earning a positive ROI from it gets shortened or lengthened depending upon several factors, like –
- The initial cost saving – One of the primary factors that determines the speed at which you will generate a positive ROI is the initial cost saving that you can do by finding a machine at a cheaper price.
- Efficiency and capability of machine – The capabilities of a CNC machine to work on several types of machining works helping you to serve different business needs will also facilitate the speed of you getting a positive ROI of the machine. Also, the accuracy of the products produced by the machine will decrease your cycle time and make the process more efficient.
- Maintenance practice – How much you care for your machine and do maintenance of the same will also largely determine the value of the ROI generated by your machine. Taking proper care, using the machine in the right way, cleaning it, and doing timely servicing can help you fetch a better value while selling the machine.
- Operational efficiency – Your proficiency in operating your plant, managing the whole production process, optimizing the material process, and also controlling the labor cost will contribute to determining how fast you are going to get a positive ROI from the used machines.
Calculating the payback period
To calculate the payback period beforehand in the right way, you will have to find out some other details too
- Total investment – Purchase price + additional costs
- Annual positive cash flow – Revenue generated – additional costs
Then the payback period can be calculated as,
Payback Period (Years) = Total Cost of Investment / Annual Net Profit
Strategies to accelerate ROI
If you want to get a better ROI and also a faster positive return then here are some easy strategies for you to accelerate that –
- Optimize the machine – Make sure the machine is optimized, integrate automation for better machining, and clean or service the machine frequently which will lead to the machine performing better and generating more revenue.
- Market expansion – You need to expand your business by offering more and more products to different other businesses which will help you to generate more revenue and more profit accelerating the ROI.
- Train employees – Train your employees with efficient methods of working which will ensure they can properly use the machine and maximize their machining potential.
Conclusion
Used CNC machines are a great investment for you if you are in the manufacturing business as that will help you in production and also help you fetch a good amount while reselling. But make sure to take care of your machine in the right way to get the maximum ROI, and if you’re now looking to get a used CNC machine then definitely check out the large collection of Machine Stations.
