Sunday, May 15, 2011

MFP's & Cost Per Page Agreements

It's that time of year for me and my apologies!  I've been very busy trying to get my summer Collegiate baseball team ready for opening day.  We open Memorial Day Weekend and then play 30 games in 60 days.

I had an email the other day from a rep that was new to the industry.  I was asked "Can you tell me what information I can read to understand cost per copy to figure contracts for my customers for toner and service. "

The first thought that came to me is that this rep is really new and possibly there is nothing in place from management to help this rep sell. He may be the only rep, and he may be working for a small mom and pop that may be selling other things such as furniture, postage machines, shredders and office supplies.

Cost Per Page and Cost Per Copy, both mean the same.  Usually if a rep states a cost per page or a cost per copy it means that all consumables (toner, developer, drums), parts, labor and maintenance is included for that price.  Cost Per Page for multifunctional copiers (that's what we're gonna call it from here on in) for black pages can be anywhere from .004 (usually reserved for print production) all the way to .03.  Pretty much depends on the speed and volume of the unit. An average cost per page should be somewhere around .0125 for a black page. 

Since color multifunctional copiers are gaining more acceptance most dealers and direct that offer Cost Per Page Contracts have a separate charge for black like .0125 and then a separate cost for color (average color is in the are .075), again Print Production units will have the lowest Cost Per Page and the low volume Multifunctional Copiers will have the highest Cost Per Page. 

Most Dealers and Direct Branches will make you commit to an annual volume for the pages, and then bill monthly or quarterly.  The billing could be in arrears or in advance.  Overage charges apply when you've made more than your contracting volume for any month, quarter or year.

Lately, there's seems to be a growing trend to incorporate the copier lease and the Cost Per Page on the lease agreement.  What that means is that you have two charges from the leasing company one for the basic lease of the copier and then the Cost Per Page Agreement.  I'm kinda wishy washy about this, in one hand this type of agreement protects my customers from upgrades and  on the other hand my customer is contracting for all of the pages to be copied or printed upfront (there's no way of getting out of it), and then are automatic increases for the Cost Per Page built in every year.

One other side note for the newbie is that most manufactures have a wholesale Cost Per Page "fact" sheet, this information details the yields of the consumables, yield of certain parts and the estimated "meantime before failure" with that they then associate an average labor charge.  In essence the manufacturer is going you a delta at your cost and you can process from there.

In the end Cost Per Page or Cost Per Copy are two of the same.  There are hundreds of variations for cost per page agreements, make sure you read your agreement and understand your agreement.  From there you can consult with your customer for the best plan of action.

-=Good Selling=-


Vincent Velasquez said...

Well said.

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