Opening and launching a new laboratory is a
costly endeavor that requires significant grants and outside sources to fund.
Unless a lab is taking over previously occupied space and inheriting aged, but reliable lab equipment, they will need to purchase almost everything needed to conduct their experiments.
The lab equipment needed to start up a new lab is pricey, even if the research is quite general in focus.
Purchasing one-time large lab equipment items like ultra-low temperature freezers, biosafety hoods, centrifuges and incubators bring out of pocket expenses close to $50-60,000 before a single drop of reagent or pipette tip has been acquired.
Because the most expensive part of operating a lab is the ongoing expenses of personnel, consumables, and reagents, asking for new lab discounts has become part of the dialogue between PIs, lab managers and lab equipment distributors.
It is fair to say a startup lab discount is an expectation; one that lab equipment distributors are more than willing to entertain.
Why do lab equipment companies offer new lab discounts?
Both parties come to the negotiating table with similar but competing interests. Each want to know: “How can I save/make the most money on this relationship?”
The PI needs to hold onto as much cash as possible to purchase the human power, specialized chemicals and reagents that drive their experiments.
The lab equipment company wants the prestige of setting up the new lab and predictable cash flow that comes from repeat orders of routine consumables.
When approaching the relationship fairly, the PI is prepared to offer a steady stream of repetitive income to the lab equipment company in exchange for their help lowering the fixed costs associated with getting the lab operational.
On their side, the lab equipment company is prepared to discount these one-time purchases, expecting that the goodwill will make the PI inclined to buy their renewables and help repay their losses over time.
Sometimes a lab equipment company will forcibly recover their losses by requiring a signed contract of exclusivity that may impose fines if the lab sources their consumables somewhere else.
Robotic liquid handling equipment manufacturers do this all the time by threatening to void the warranty of any lab who buys a “knockoff” consumable from anyone else, even if it performs exactly the same.
How much is a new lab discount?
There are no rules governing what a lab equipment company should offer as part of a new lab discount package.
Store credits are a good way to ensure the company generates additional profits from the startup lab without resorting to a heavy-handed contract.
Generally speaking, the more items purchased from the same equipment manufacturer opens the possibility to deeper price breaks than picking and choosing from multiple lab equipment brands.
Brands value the prestige of seeing their name on every benchtop, and there are efficiencies gained shipping everything on a single pallet from a central location.
Are new lab discounts really a good deal?
For new lab discounts to work, both parties must act in good faith. Good faith requires sacrifice on both sides to each other’s mutual benefit.
Some lab equipment companies publish list prices that are multiples of what it cost to manufacturer.
A forty-percent discount sounds like an impressive benefit, but not necessarily so if the company is still making 200% or more in profit.
Where is their pain?
On the other side, if the PI negotiates a killer deal on startup lab equipment and then buys consumables from Amazon or some other lab supply company, they violate the trust and financially hurt the lab equipment company.
New lab discounts can be a great win win tool for start up lab and lab equipment suppliers.
If you are preparing to open a new lab give Stellar Scientific a call and let our team craft a one-of-a-kind package deal just for you.