MFP Wars, basically I've never seen anything like the past year in the last 27 years of selling copiers. Direct Branches from KonicaMinolta, Ricoh, and Toshiba are basically selling MFP systems at cost or a few dollars above in order to acquire the aftermarket business. How long can this last? My bet is it will last as long as the deep pockets of the manufacturers will permit it.
All of the manufacturers have a dealer side of the business, recently a pricing issue was raised to one of the top three manufacturers in reference to the aggressive campaign that RBS is waging to acquire new business AT ANY COST, even if it means cutting into Ricoh Dealers business and profit margins. When the issue was raised to a senior level executive, they stated that they had no knowledge of this and that it could not be happening. The Senior Level exec then did some checking and found this out to be true and then escalated this issue to the VP of Sales (that's about where it sits right now). I seriously doubt that there will be any change in the SOP.
Now Ricoh is not the only manufacturer that has this problem, KonicaMinolta and Toshiba Direct branches are also in direct competition with their dealers and are looking to gain market share at any cost!
So, where does this leave dealers? For the dealers that are in the major market areas such as New York, Chicago, LA, Dallas, Boston etc, competition is fierce and dealers are taking a beating! Consider this, when the dealer loses a sale to its own manufacturers Direct Branch, who loses? The dealer loses because they did not get the sale and the clicks, the Direct Branch loses because they moved a box @ zero profit and in turn the parent company will lose because the dealers that buy at higher prices will not buy as many systems! So if everyone loses, what they heck are they doing? Preserving market share? At what cost?
Recently we have seen some new players in the market such as HP, Okidata, Samsung and even Lexmark has a full line of MFPs. Samsung has hit big with their 45ppm MFP that has an MSRP of $3,000 and due to launch a 55ppm system in the near future for under $8,000 MSRP. HPs foray with the Edgeline series will make an impact also.
I'll say it over and over there are too many managers @ Direct Branches that are teaching new reps to sell on price and price alone. I know they are under pressure to move boxes, however selling on price helps no one, especially the new reps that come and go. Basically thats the reason because they come and go, no one is their to teach them the skills of selling, such as FAB (feature, advantage and benefits), or Lock Out features that a certain system might have an most all the art of probing the customer and finding out the pain that they have or a solution that will allow them to sell at a profit. It seems to me that most Direct Branches are selling themselves into a hole they might never get out of.
I have a dear friend who works for RBS in New Jersey, we chatted the other day and he keeps stating that Dealers are the past and the Direct Branches are the future of the industry, I beg to differ, if that's the case then our industry is in a bad state of affairs.
As an industry we need to start from scratch, we need to hire energetic and dynamic people and teach then "How to Sell", educate them in prospecting, probing and customer relationship selling.
On the flip side I'm sure their are many fine reps out there that make a good living that are working at Direct Branches and Dealerships, however if the industry continues to "dump" boxes our way of life will could go downhill very fast.
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