A little research can save you a lot of money.
Exercise equipment ranks high on the list of fitness facility costs. From navigating the maze of manufacturers to negotiating price and financing options, purchasing equipment for your club is a complex process. How can you save money on fitness equipment but still own quality pieces? Consider purchasing used equipment or leasing. Read on to determine what’s best for your business and your budget.
Used Equipment Terminology
You can purchase used, refurbished or remanufactured equipment. While some dealers use these terms interchangeably, here is the correct terminology:
Used. The equipment is sold “as is” with no guarantees that it will function properly. Look for demo models, as these pieces were likely not used very often.
Refurbished. The machine has been cleaned up, lubricated and tested. It works, but there may not be a warranty or a return policy.
Remanufactured. The piece has been completely dismantled and rebuilt to factory specifications. The paint has been sanded off and reapplied. The gears, cables, bearings, upholstery and electronics have all been replaced.
As long as you find a reputable dealer, you don't need to purchase new equipment (or you may want to mix new and used equipment at your facility). Look for well-maintained equipment that has seen little use. Also, be sure that the companies you select have liability insurance in case of mishaps at their facility or poor product remanufacturing.
When purchasing used, refurbished or remanufactured fitness equipment, you can save 40%–60% (Kufahl 2010). Weigh several factors before you close the deal: your members’ comfort and safety, profit margins and your facility's image. Make sure the used equipment blends nicely with the pieces you already own.
Tips for Buying Used
Taking the time to research various resale companies can help you save money and buy equipment that will meet your needs.
- Know before you buy. The variety of used equipment out there is endless. Have specific pieces in mind before you purchase, so that you don’t get drawn into buying equipment you probably don’t need. Also, do not buy used equipment unless you know where and how it was previously used.
- Choose quality brands. Purchasing name brands will generally save you money in the long run, because the equipment is built to higher standards and is likely to last longer.
- Check for excessive wear. Before buying, inspect the items for any kind of damage, excessive wear, cracks, rust or other defects. Thoroughly test the equipment to ensure that everything works as it should.
- Check the safety features. This step is essential. Check the emergency shut-off switches and wires for fraying or signs of damage. Rubber or plastic parts should not show cracks or signs of excessive wear.
- Get gently used pieces. Avoid equipment that was used at high-traffic facilities, as well as pieces that are out of manufacturer’s warranty (Maechler 2013).
- Get a warranty. Try to get an extended warranty on all parts and labor to cover potential defects. The industry standard on parts and labor is 6 months.
Three Questions to Ask
Before you purchase a piece of used equipment, ask yourself the following questions:
- What piece(s) are we getting rid of? Whenever you buy new equipment, ensure you have the space for it. Otherwise your club begins to look overcrowded and intimidating to members.
- What’s available out there? Look at the ads in your trade magazines, visit the vendors’ websites and go to trade shows to investigate options. (See the “Resources” sidebar to get some initial ideas.)
- Where does the used equipment come from? Do the pieces come from a health club bankruptcy? Are they trade-ins as a club upgrades? Maybe they’re leasebacks?
Leasing and One-Stop Shopping
Most commercial equipment resale companies offer both cardiovascular and strength training equipment. Making all of your purchases from one company can lower your overall price tag. Alternatively, consider leasing your equipment. Many manufacturers offer competitive commercial lease programs that will lower your monthly costs considerably. In addition, at the end of the lease term, most manufacturers give you the option to either turn in the equipment or purchase it at a reasonable price.
Financing Your Purchase
For most businesses, financing is a necessity. It’s sometimes easier to get financing for used equipment, because the total transaction amount is smaller than it is with new equipment. Your best tactic is to shop around for sources; check out independent banks, credit unions and investors. Figure out what fits into your business plan for the long term.
Taking out a loan allows you to purchase the equipment and repay the cost over a set period of time, with interest. Borrowing the money may require a higher down payment, with an average of 10%–20% down. The upfront payment may be significant and may include sales tax. The good news is that you can write off the interest portion of the loan. Plus, the principal can be depreciated according to IRS depreciation schedules. Best of all: The equipment, once paid off, is owned outright by the fitness center.
When it comes time to buy fitness equipment, the decision is never easy. Purchasing used equipment can be a great investment for your club and can improve your bottom line, as long as you do your research and make informed buying decisions.