Ricoh Being Ricoh "part III"

So, I'm on the phone with a potential account today, already had met with the CEO and Manager about a week ago, gave them what I thought was a fair price for a Ricoh MPC2800.  Tried several times to close on the spot, however they had been renting a machine 60ppm monochrome Canon for $200 per month, but now wanted to get a new color device to lease when they arrived in the new building. 

When I presented pricing for the MPC4000, they cringed, cried and carried on about the price. So, I moved downward with machines since their volume would not warrant the MPC4000 anyway (btw, they were told by a friend to get the MPC4000). Finally we settled on the MPC2800 and I guess they also figured this was too much for them to spend so they decided to shop.

Hey, I got no problem with shopping. However, they decided to call other Ricoh suppliers for a price on the MPC2800.  Yeah, I figure Ricoh Americas Corp aka Ricoh Direct and at least another dealer of Ricoh or Savin would get involved.

Too my surprise when I was trying to find out who else was in the mix, indeed it was Ricoh Americas Corp aka Ricoh Direct (as the rep states), but it took me a few minutes to get the other supplier. Well, it was.......IKON!  I then told the potential customer that Ricoh owns Ikon, they are merging and if you did not like one of them, and then picked one of them over us, you would eventually being doing business with the one you didn't like or care for.

So, the take on this can be Ricoh Direct vs Ricoh Direct, who will win? I'm hoping I can get the deal, however I'm rating it very slim since either one of these "Direct" branches are just buying business and giving clicks away as represented by a quote that was emailed to me from a customer in Sacremento, Ca.  This quote feature two Ricoh C550EX with a mixed color volume of 10,000 per month and a cost per page plan at .04 cents!!!

Anyway, I'm hoping one day someone with some smarts at Ricoh may read this and the light will come on with what's happening in the field and they'll realize they can't keep this up, well they probably can,  however they'll lost most of their dealers and since dealers are subsidizing  the Direct Branches, it would only be a matter of time before Ricoh gets bought by the likes of Canon, KonicaMinolta or how sweet would it be to have Kyocera buy them.

-=Good Selling=-

Ricoh, IKON, RBS & Ricoh Dealers

Here's a what if scenario for everyone. With Ricohs acquisition of Ikon, I can see them more as a top tier distributor for Ricoh. Which means that they get all products PPBG (high end) and all the rest. I would tend to think that they will stay in the same market Fortune 1-1000. Ricoh Americas Corp aka Ricoh Business Systems may concentrate locally for Schools, Municipalities, State Agencies and Top 100 Accounts in their respective territories.

I also believe that larger Ricoh Dealers who are maintaining quota and above will stay on as Ricoh Dealers with some being offered PPBG. Ricoh Dealers that are not maintaining quota may be asked to take on Savin and Lanier brands instead of Ricoh. Those dealers would not be offered a shot at the PPBG machines and would have to concentrate on their own SMB market place.

If this was a strategy and believe me I have do idea what's going to come down the road. But, what if this panned out to be true. The Ricoh brand would be a top tier brand just being marketed by IKON, RBS and Mega Ricoh Dealers. Smaller dealers would compete for local SMB with Savin and Lanier. IKON, RBS and Mega Ricoh Dealers would be on the same playing field, while Savin and Lanier Dealers would also not have to compete against Ricoh in the local SMB market place.

Too me, the road the manufacturers are traveling down is a scary one. If Canon starts thier purchasing of Dealers (stated in a press release), they will obviously go after the top tier dealers in every major market. Canon needs to regain market share!

Where does that leave me, or other sales guys like me, we will be doomed to work for a manufacturer or will there still be some decent independents left in the next go around of purchases?????

-=Good Selling=-

MFP Wars "Death of the Independent Dealer"

The Copier business was once a wonderful business, where the manufacturers only sold their goods through Authorized Dealers. We had competition, however it was healthy because everyone was on the same playing field. The Dealers who sold the most got the best pricing, and the Dealers who sold the lease just had to grin and bear and that's the way it was.

Over time, the business model matured and companies like Danka, and Alco (Ikon) emerged to buy some of the largest or most profitable dealerships in the nation. At one time Alco (Ikon) was a distributor for Sharp copiers, and then one day Alco (Ikon) dropped Sharp and the Japanese Manufacturers shook in their boots. From what I remember, and I could be wrong, Sharp lost about 80% of their North America distribution in one day. Every since then the Japanese manufacturers have been buying dealers to preserve market share.

Which brings me to a line in Tommy Boy:

Tommy: [after watching Ray Zalinski car commercial] Hmmm. He seems like a nice guy.

Richard Hayden: This is the guy trying to buy the company, not to mention put you out on the street, and all you can say is,[sarcastically]

Richard Hayden: "Hmmm, he seems like a nice guy!"

While we sleep manufacturers seem act like nice guys and continue to buy the channel and under cut our pricing. we too could soon be out on the street!

Take a look at Canon, they stand to lose almost 600 million or more in sales in North America! What are they going to do? In talking to friends the last few days, they are courting dealers in droves to become a Canon Dealer, and if that doesn't work look for Canon to start acquiring dealerships in markets where there is no representation from Canon Business Solutions.

Word on the street is that every dealership is now worth more just because of the Ricoh purchase of IKON.

Copier manufacturers along with print manufacturers make money by putting ink on paper, and at this point in time it seems they don't care what they have to do to protect their channel. Just recently, I ran across a deal from RBS in NJ for a Print4Pay account, where RBS was losing 45,000 dollars in order to get the clicks! Am I missing something here??? RBS guaranteed single clicks for 11x17 at .06 and .0042 for 11x17. Hey, guarantees are for sissies right.

In the months ahead there will be many dealers bought thus further eroding the dealer channel. Before you know it, well it's tough to compete now, it's gonna get a lot tougher down the road.

Personally, I can't see how the small dealers can stay in business, mergers of smaller dealerships will be the next fad, thus enabling these companies to be bought by the likes of Canon, TABS, Global, etc....

Maybe Canon will buy HP? The more I think of it, we may see an agreement from Canon and HP to market each others products. Anyway you slice it, it seems the writing is on the wall for Dealerships!

btw, Tommy Boy is one of my favorite sales movie...God Bless Chris Farley!

-=Good Selling=-

MFP WARS, Who Wins and Who Loses, Ricoh, Canon, Konica Minolta, Xerox or Sharp?

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.