Steady uptick in the demand for refurbished Nilfisk equipment
Todd Litton joined Nilfisk’s Michigan-based operations about seven years ago. Although he formerly worked in the Casino industry, Todd is not a risk taker. Rather, he prefers to stake his wager on a sure win and, in Todd’s opinion, future growth in the refurbishment business is a safe bet.
Over the past 5-6 years, Todd has noticed a steady uptick in the demand for refurbished Nilfisk equipment. “Our aim is to capture sales where they are by providing quality service for our key customer segments. We do this by ensuring that all Nilfisk products on the market, whether new or used, live up to the company’s high-quality standards,” says Todd, who currently serves as Director of US Field Operations in Detroit, Michigan.
While this goes without saying for products just off the assembly line, the importance of ensuring the quality and client satisfaction rating for refurbished Nilfisk units may be less obvious.
When Todd first started at Nilfisk, he immediately saw the potential in refurbishment and was able to allocate two employees to refurbishment full time over the course of the next five years. 2020 marked an internal shift of attention, and Todd, now working closely with his colleagues in Sales, convinced the company to double the team to the four full-time employees who comprise the U.S. Take Back and Refurbishment department today.
Equipment that is almost as good as new
The refurbishment team members all take great pride in what they do. “These highly-skilled specialists know just what is needed to efficiently, and effectively, breathe new life into used Nilfisk machines, so they are almost as good as new,” Todd says.
As with new products, the goal is to capture the best sales opportunities and ensure clients are happy and keep coming back. “To do this, we focus on equipment for which there is a clear and steady demand such as small walk-behind and mid-size rider units, that can be refurbished to top quality in a reasonable turnaround time at a decent profit margin.”
Refurbishment also makes good business sense from a reduced waste, sustainability perspective. “Depending on the condition of the used unit, we can extend the product life span by 50-100% by refurbishing. We are truly maximizing resources here and, as importantly, getting these machines back on the floor, doing the job.”
This is especially the case if the used equipment has been well-maintained, like leased equipment where Nilfisk holds the service contract. “As a rule, well-kept units are easier to refurbish to top quality again,” Todd explains. “They can be turned around more quickly and, typically, bring a higher re-sale value.”
Larger equipment with long repair time, or units that have been poorly maintained, are usually either sustainably scrapped, or sold to other dealers at a reduced cost. There are exceptions, though.
Customer demand to drive scale
“In 2021, we refurbished over 500 individual products, including a disproportionate number of larger units,” says Todd. “These larger units can take up to four weeks to retool vs. one week, or even a few hours, spent rebuilding a smaller commercial unit. While it drives down our absolute totals to work on these larger units, it was good that we were able to fill the unprecedented customer demand for these larger machines last year.”
But Todd does not plan to rest on these laurels.
“We still have a lead time that could be improved, and my goal is to drive that down to maximum 2 weeks and eventually to build stock for the more popular re-sales items.”
Todd notes that they have run a constant backlog on orders for refurbished equipment for the last 5-6 years and the demand continues to grow. “The regional manager of a major client that orders five refurbished machines, on average, every month recently told me that they are opening a new branch in the Upper Midwest and expect to double their demand for refurbished equipment, accordingly, already this year.”
Clearly, the business growth potential is there. “In fact, we are also opening for continuous purchases of refurbished equipment on a subscription basis for some clients,” adds Todd. “This subscription-based approach to customer orders for refurbished equipment will also facilitate our ability to forecast demand for these units in the future.”
