Providing Advice for the Robot Purchase Decision

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Robot-Purchase-Decision Before the current generation of low cost robots, most business robots were large purchases made by industrial companies with internal engineering resources skilled at performing capital expenditures analysis.  Today, low cost robots aimed at light manufacturing and warehouses are being purchased by smaller companies that often rely on their outside advisers for business, accounting and tax advice.

Besides calculating the projected economic rate of return, robot financial advisors should get a basic understanding of the major robot categories and consider attending the new robot product demonstrations.

Light Manufacturing and Packaging

Some of the major lower cost robot manufacturers include Universal, Rethink, ABB, and Motorman.  These companies make newer so called collaborative robots that are low in cost and work side-by-side with existing human staff.  Common brand names for Rethink are Baxter and Sawyer. For ABB the collaborative robot brand name is YuMi.

Warehouse Applications

One of the fastest growing robot categories is warehouse robots.  The two largest warehouse employee categories are 1) pickers who pick goods off warehouse shelving and who bring the goods to 2) packers who then pack the goods for shipment.  Major picker warehouse robot brands include Amazon's Kiva and Kuka.  After the picking process, some of the collaborative robots described above can be used for the packaging function.

Robot Economics

The first question is: does the prospective purchaser have a sufficient volume of receptive unit tasks necessary to justify the robot purchase? Excluding routine maintenance, robots work 24/7. They don't take any breaks or vacations, therefore enabling them to process surprisingly large unit volumes. For example, a three year high volume customer contract might justify a robot purchase. Two and three shift labor force high volume business operations will have an economic payback that is corresponding multiples greater than that of a single shift staff operator.

Robot Tax incentives

Robot tax incentives include potential Section 179 equipment expensing, possible bonus deprecation, and R&D tax credits related to the robot integration process.

Many of these yearly tax incentives typically depend on the enactment of federal tax extenders, which typically have been available in recent years.


Informed robot purchase advisors in the manufacturing and warehouse industries can play a crucial role in helping their clients address the automated future.

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Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.

Jennifer Reardon is a Project Coordinator with R&D Tax Savers.