Monday, November 1, 2010

Copier Dealers and the Copier Factory!


We (Dealers) all hear about, and see it on the Print4Pay Hotel forums , along with quotes from the field.

We ask ourselves how the hell can Direct MFP Manufacturers continue to offer cost per page contracts that are lower or equal to the cost fact sheets that they give to MFP Dealers, plus dump product that is below dealer cost in most cases? When will the madness end?

For example: Recently a Ricoh 907EX Pro with Bookletmaker, Print and Scan Controller, 3 Hole Punch, Postscript and LCT sold for $27,000.  The MSRP for this base system and the accessories is $68,600. The discount from MSRP is almost 61%!!! What I can tell you is this happens with all of the Direct Branches and not just Ricoh equipment.  I see the quotes come across the forums and we see the same for Canon, Xerox, KonicaMinolta, and others.  Who can sell at a 61% discount and make a profit, especially when you price service at .0042 per click for 11x17, that means you're getting .0021 for letter and the smart CRD, Repro shop is running most jobs 2 up and then cutting them in half.  How foolish are you?

The answer is........no one can sell at this price and make a profit, or not a profit on "that sale" or the service on "that sale".  Years ago I was at a meeting and I remember it clearly because the VP (not dropping names) told me to make sure I spelled his name right when I posted items on the Print4Pay Hotel forums. His statement to those of us in the room is that the US companies like Canon, Kyocera, Ricoh, KonicaMinolta and others were nothing more than a "mega dealer", they get their pricing from Corporate and then marked up the equipment for US distribution. Gee, that's a real surprise.

Moving on, each Direct Manufacturer here in the US has different divisions (now called Channels) of distribution.  We all know they have a Direct Channel aka always in ending in BS, then there's the Dealer Channel and some even have other levels for Printers, Scanners and Internet Distribution.
At the end of the year, we all have to state our profit and loss right, we're all good on this.  The Dealer Channel is a money maker for the US Manufacturer, probably giving them their largest percentage of profit (this is guess, but it's an educated one on every thing I hear from the field, please prove me wrong).  You then have the other Channels to report profit and loss such as the channel that end in you know what _BS. Now, we don't get to see these reports and alas I don't even think it's possible to see the profit level of the Manufacturer's for the America's, wait let me check for ya.................it seems the posted P & L's is listed for the Americas and but there is no break down provided for each Channel.

Alas, at the end of the year as long as the Direct Manufacturer reports a profit, I'm thinking so what if the Direct Channel lost 8%, the Dealer side made us 12% and we posted a 4% profit.  We can report back to Corporate with a profit.  Profit is what it's all about right? 
So, can Direct Manufactures continue to lose money on their Direct Channel's?  Yes sir, as long as the Dealer Channel comes through with sustainable profits. Funny, I hear from many P4P'ers and read all of the "MFP News" and I always hear the same message from the Direct Manufacturers, and it kinda goes like this "We're very concerned about our Dealers", "Our Dealers are our Top Priority", "Dealers got us to where we are today".  Got me thinking, do they love us because they like us, or we're making em boat loads of cash!

-=Good Selling=-

9 comments:

Anonymous said...

What I am finding is that there is almost nothing left for us as Ricoh dealers. I look around my territory and virtually every large account is already in the hands of Ricoh Direct, be it RBS or Ikon. In this economy with most small businesses sucking wind and not investing in new office equipment dealers are now struggling because their oportinities to win in medium and large sized accounts are very limited due to the dominance of the Ricoh direct side.

I can't tell you how frustrating it is for me as a dealer to walk into the school district in my home town or the hospital in my home town and see fleets of equipment from RBS and I can't even get an oportunity. This should never ever happen. At the very least the local dealer should be given the deal as a ship in and handle the service. Prehaps a 25 mile buffer should be created around a dealers home office where RBS has to have a hands off policy to give the dealers a chance to win accounts that are right in their own back yard. Meanwhile our quotas with Ricoh for hardware and aftermarket go up year after year as RBS gobbles up an even larger share of the oportunities in our territories.

Very FRUSTRATED!!!!!

Anonymous said...

What I am finding is that there is almost nothing left for us as Ricoh dealers. I look around my territory and virtually every large account is already in the hands of Ricoh Direct, be it RBS or Ikon. In this economy with most small businesses sucking wind and not investing in new office equipment dealers are now struggling because their oportinities to win in medium and large sized accounts are very limited due to the dominance of the Ricoh direct side.

I can't tell you how frustrating it is for me as a dealer to walk into the school district in my home town or the hospital in my home town and see fleets of equipment from RBS and I can't even get an oportunity. This should never ever happen. At the very least the local dealer should be given the deal as a ship in and handle the service. Prehaps a 25 mile buffer should be created around a dealers home office where RBS has to have a hands off policy to give the dealers a chance to win accounts that are right in their own back yard. Meanwhile our quotas with Ricoh for hardware and aftermarket go up year after year as RBS gobbles up an even larger share of the oportunities in our territories.

Very FRUSTRATED!!!!!

Anonymous said...

Manufacturers are still only really concerned about one thing...and it's not the dealer making them money...its how many boxes they manufacturer and move out of their warehouse to ours. If profits are what drove them, the give-a-away equipment sales and service would stop.

Art Post said...

To Anon 2:

Yes, they are concerned about moving boxes, however at the end of the year they need to post a profit or their ass is on the line. Look at last years results for Ricoh and you'll see that the Americas did not post a profit, thus Brodigan was gone and replaced by "what's his name", and then he was gone. Point is in all the years prior these America Branches turned a profit as a whole. We'll never know what channel made what percentage of profit, however I'll bet dollars to doughnuts that the dealer channel was always profitable for them. BTW, thanx for the comment!!!

Art

Anonymous said...

When I drop Ricoh as a dealer in the next year how will that effect their bottom line? I'm already laying the groundwork to move over to another product line. My Techs are trained on the new line and my showroom is mostly switched over to the new line.

My customers buy from me regardless of the name on the box. The Ricoh thing was fun while it lasted but its been all downhill for us dealers over the past three years.

Art Post said...

This was not a rant towards one manufacturer like Ricoh, it was intended for all Manufacturers of MFP that have Direct Branches in the Americas.

Our latest comment "my customers buy from me regardless of the name on the box" is a legit response, however try having the names of TOWA (former copier distributor), Samsung, Sanyo (former copier distributor), and Copystar and you may see some of your larger customers fall off the face of the earth.

Would like to hear from others and ANON thanks for the post!

Art

Anonymous said...

I recently read a Cannata report where it listed the Ricoh direct channel was 85% and the dealers were only down to 15% of their revenue. I understand that Ikon changed that number quite a bit but its still shocking. Its tough to be a Ricoh dealer with that type of huge difference. The dealer is looking for a needle in a hay stack

Anonymous said...

I to have sold Ricoh/Savin for 20+ years. We switched our emphasis to Sharp. It has been a great move!!! Sharp is a dealercentric company and willing to give help to the dealer world. The after market costs are FAR below Ricoh who is the highest on the planet. LOOK AT SHARP the gear is GREAT!!
Matt

Anonymous said...

I can speak regarding Ricoh. They do not care about their dealers. They give the branch's pricing that is below our dealer cost, service the machines for near cost and then walk into our office and tell us that everyone is on the same playing field. We get fed so many BS excuses/stories that its hard for our DSM to even keep his stories straight. Ricoh decided to screw their cash cow (the dealers) and will pay. Many dealers I know are leaving Ricoh as fast as possible. We have picked up other lines. Ricoh now comes periodically and tells us to drop the other lines etc. Fortunately as a dealer I do not work for Ricoh and my employees paychecks do not have the ricoh logo on them. We have found that Samsung has been a great fit for us. Have Kyocera as well but will probably drop them as the support is terrible. We have been waiting for 2 years for support plans that were promised to us etc to move our base, plus it is very hard to be competitive with the Kyocera and their pricing. We are talking to other manufactueres right now to see what changes we will make. I feel that Ricoh will eventually close the branches as we have already seen several sold (RJ Young bought 3 or 4 from them). I think they will sell them for pennies on the dollar to the dealers or to the branch managers. Honestly how long can you go losing money year after year?? If I am not mistaken didn't a company by the name of Danka try this in the early 90's and I believe they went belly up....Just my $0.02