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Why Your Profit Generating Equipment Needs a Warranty

Dec 31, 2013

Buying new equipment for your business calls for buying smart and thinking ahead. One of the costs of doing business is insuring your shop, your assets and your people against unforeseen circumstances. The same applies to your direct to garment printer equipment.

When you buy an AnaJet printer direct from AnaJet, you’re entitled to a full 90 days’ warranty on all parts and labor. If you buy new, that warranty extends to an entire year, except for the print heads which are covered for 90 days. Having a warranty makes a ton of sense for a profit-generating piece of business equipment. It makes even MORE sense to buy a warranty extension when you’re purchasing used equipment from a third party.

Secure your investment with a warranty

Let’s consider some mathematics.

 You bought a machine from a third party and got a good deal. You assume it will run perfectly and you forgo a warranty. You rely on public forums or a friend who knows inkjet printers really well, rather than being able to call AnaJet for set-up and tech support.

Assume you print and sell only 25 shirts per day at $13 retail, five days per week. This adds up to a gross $84,500 per year. At a conservative 50% margin, your DTG gross profit is $42,250 per year.

25 shirts x $13 retail x 5 days per week x 52 weeks = $84,500 x 50% = $42,500

But now let’s factor in the unforeseeable. It is a used piece of equipment and you know that, as with used cars, previously owned houses and other used manufactured goods, breakdowns are more likely to occur. When your profit generating piece of equipment breaks down, what happens to your bottom line?

Let’s look at a couple of repair scenarios.

Scenario A:

 Your used printer experiences some type of failure five months in.

You pay to ship it back to the factory, both ways, for repair and refurbishment; at $400 each way, that’s $800 total in shipping costs. When your printer is received in, the repair department discovers that you have clogged lines from the original owner. A few other items are worn out and need to be replaced, so with labor and parts you have a $1,200 repair bill. You have to invest $2,000 total.

Depending on freight times, weather, time of year and other factors, assume 15 business days of downtime. Remember, warranty owners get first priority in the queue. Your gross productivity drops by $4,875. 50% of that is $2437. Your gross profit less repairs is now $37,813.

$42,500 – $2,000 repairs – $2437 gross profit = $37,813

You do not have the advantage of ongoing live tech support to help ward off future failures and downtime. You’re still dependent on forums and good will to help you optimize results.

Another problem occurs? Conservatively, subtract another $4400 in parts, labor, freight and lost profitability. Now you’re at $33,413 on the year. Ouch.

Scenario B:

You ensure that your third-party purchase is factory refurbished and you buy an extended warranty. Let’s say it’s an mP5. When you ship it in ($400), the factory installs all hardware and software upgrades, maybe recovers one clogged print head, to the tune of $1,200. (Same $$ as before.) Your extended warranty cost is another $1,995. Return freight is now FREE, so your total cost for warranty, repair, and shipping is $3,595. Gross profit after 12 months, minus repairs & warranty: $38,905.

$42,500 – $1995 warranty – $1600 refurbishment = $38,905

It looks like you would have to spend over three grand, and the upside is only about $1,100 against one repair, so might as well roll the dice, right? But wait – you bought the warranty, so you now have live tech support with AnaJet and they help you to diagnose a future performance problem before it becomes a major repair item.

AnaJet tech support is able to send some parts to you for the problem they prevented, and you never need to send in your printer. No $400 or $800 freight bill. Better yet, some of the parts were free because AnaJet determined that the factory was responsible. You experienced only three days of downtime, not three weeks. $3,900 in productivity saved and let’s say $1600 in gross profit saved.

With one quickly handled trouble ticket, your gross profit decreases only a sliver from $38,905 to $38,068. Compare this to Scenario A, working “without a net” and getting hit with just one (preventable) repair for a net of $37,813, or two repairs, net $33,400.

You came out ahead because you bought a warranty and refurbished your profit-generating equipment (and firmware) beforehand. Not only that, you didn’t lose five or more customer orders because you had no working machine. This is the hidden long-term cost savings that savvy business people always insure against.

Having live support combined with a vendor who has your best interests in mind can save you more than just a few bucks in the long run. You have a safety net, a team of skilled techs who directly answer at least 90% of calls, 80% of them in 30 seconds or less, who help you land more business through expert hardware and software advice.

SUMMARY.

 If you are considering a third party purchase, be sure to call in to AnaJet and inquire about a factory refurbishment and warranty. Protect your investment and your efforts to develop your referral business! We cannot provide tech support if you did not buy direct or buy a warranty on a third-party purchased machine.

12-month warranty prices (USA only)

FP-125: $1,475

mP5: $1,995

mP10: $2,395

In general, a USA warranty extension covers everything excluding print heads and inbound shipping. Shipping is usually 3-5 business days depending on your location and method of shipment, and our repair queue ranges from five to seven business days or occasionally longer depending on demand. Talk to AnaJet Customer Care for more details!