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!