I’ve been in this business for a long time and I can tell you that the majority of companies spend much more than they need to on IT equipment. In most cases, I think it’s because they don’t account for all the different options that they have, and they base their decision on limited data. If you think about it, most of us in our personal lives would never buy a big ticket item like a car or electronics without doing a lot of research. Unfortunately, a lot of companies don’t do that same due diligence when they evaluate major IT purchases.

So, I’ve put together a few basic principles that are designed to help you become a more informed consumer and help you save between 50-70% on your next IT purchase.

Recognize agendas

When you’re talking to OEM sales reps, value added resellers, or any IT sales rep for that matter, don’t fall into the trap of thinking that they’re all true consultants with your company’s best interests at heart.   Some are truly great resources.    It’s natural for IT managers to develop strong relationships with their regular sales reps and to look to them for buying recommendations. But you also have to remember that the person offering the recommendation is incented to sell you his company’s equipment, usually at a premium. Make sure to evaluate more than one OEM and talk to resellers so you have a wider range of options to choose from.

Consider alternatives to the latest and greatest

Not only are OEM reps well compensated to sell you IT equipment, but they are also incented to sell you the latest, top-of-the-line models. While the next generation equipment might be a perfectly valid solution for your environment, it could also be overkill. If your rep is recommending a high-end solution, don’t just take the suggestion at face value.  Uncover whether or not an older generation or an alternative model can serve the same purpose.

Understand the secondary market

When you’re trading in a used car, you probably research both the trade-in and the retail value of the car on a site like Edmunds.com. After all, the demand for the used car informs your negotiation for the new one. The same is true with IT equipment. The server that you’re looking to upgrade has value on the secondary market, but your IT sales reps may not be able to tell you how much it’s worth. However, you can find out the market value of that server by talking to an IT reseller, which gives you the information you need to negotiate from a position of strength.

Know where the profit margins are

If the IT sales rep is offering you a fantastic deal on the price of the equipment, don’t assume it’s because of your savvy negotiation skills. There’s a bigger profit margin in service offerings, so many sales reps use IT equipment as a loss leader to close a bigger engagement. If the deal sounds too good to be true, you might be overpaying for something like a maintenance contract that’s been bundled into the solution. Once again, knowing the true costs of a proposed solution allows you to compare it both with other OEMs and with independent resellers.

At Canvas Systems, we think that every company should consider buying refurbished or factory-sealed equipment because of the tremendous cost savings, but we recognize that it might not be the right solution for everyone or the right solution for every project. But you owe it to your company’s bottom line to at least use us as a checkpoint during your negotiations. You may end up going with the original recommendation of your regular sales rep, but if you do, you’ll have the knowledge you need to get the best deal possible.