MFP & MPS Dealers Have Options in a Tough Economy

At a recent BTA event I was able to finally meet Chris Polek (CEO) of Polek and Polek.  Many years ago when I had my own dealership (13 years) we relied on Polek & Polek for imaging supplies.  Just this past fall when Hurricane Sandy devastated Highlands, NJ.  Polek & Polek and their employees sent boxes upon boxes of much needed supplies to my church (with out a call from me).  I urge you to include Polek & Polek as a valued vendor for your imaging supplies and I'm proud to have Polek & Polek as a long term sponsor of the Print4Pay Hotel.

 Polek & Polek, a family owned wholesale distributor of parts and supplies for copiers, faxes, and printers in business since 1974. Take a good read of Dan's article, its quite good!

You Have Options in a Tough Economy

The headlines of today’s economic news are adding to the already challenging environment in the imaging industry. OEM’s, now more than ever, are operating in your territory. This is bringing concerns to dealer management all over the United States. Pricing pressure coming from CPC pricing in the .0029 vicinity is challenging even the best dealers to search for ways to compete and reduce costs. Here are some other forces that are creating serious headwinds for the dealer community.

 OEM quotas are demanding on your resources, stuffing warehouses all over the country to the benefit of the OEM and to the detriment of the dealer community.

 Cash flow is slowing down as a result of this and the slowing economic environment.

 OEM’s threaten cancellation or to open competing dealers down the street.

 Color printing and page coverage is squeezing the dealer between the customer and the OEM supplier more than anyone else in the supply chain.

 OEM direct competition is still going on at or below your lowest price with all discounts included at retail.

 Some dealers are seeing machine placements, copy counts and new business slowing to a trickle.

 Operating expenses are all going up.

 Tech salaries are being challenged and competed for from the IT industry.

 The burden of producing profit is on service and supplies.

There ARE ways to overcome these tough setbacks and situations.

Become part of a buying group or Industry organization ‐ IBPI, BTA, BPCA, CDA or SDG groups.

These groups provide buying

Copiers, MFPs and "The Power of the .001 (one thousands of a penny)"

The Power of the .001 (one thousands of a penny)

It's getting kind of late but thought I'd give a stab at this.  The lowly penny and the power of profit that can be collected from Copiers, Printers and MFP's that are under maintenance contract is astounding.  

Years ago, with out the aid of copier maintenance software it was interesting to see what machines were pulling a profit and which were not.  When I was a newbie in the industry I can remember the service manager coming to me with a service card that outlined the cost that incurred with "x" machine and he had to make the call either try and get the system out of the field (thanx for the lead, just what I wanted to deal with a customer whose machine was breaking all the time) or to lose money on the system and raise the maintenance contract next year.

Today, maintenance software to monitor and track profits is now the norm for all dealers and manufacturers.  Thus with low profit systems or those systems producing a loss can be identified ASAP and measures can be put in place to make the system profitable.  The easiest way to make them profitable is to raise the cost of the maintenance agreement.  Most maintenance agreements sold now are all inclusive, meaning all parts, PM kits, consumables (toner, developer) and labor are included. Thus the cost per copy (I call it the cost per page) now rules the industry for most contracts.

So, what the heck does a penny get you?  Not much anymore, can you add a penny per page to a cost per page program, well you can if you 'd like to lose customers!

Here's some quick calculations on the power of the penny or in this case .001 (one thousands of a penny).  We'll deal with assumptions here for easy math.

XYZ Dealership has 500 systems that are on a cost per page contract. Each system generates 5,000 pages per month on average for a total of 2.5 million pages per month.  The XYZ dealership needs to generate additional profit because the owner needs a new boat. By adding .001 to each renewing contract each month, the added profit is $2,500 per month. Over the course of a year that's $30,000.  That's enough for the boat payments!  Really, if your current contract cost was .01 (penny) would you (the customer) be upset if the monthly increase was .001(one thousands of a penny) = $5 per month (Don't think so). What about an increase of .002 for each page, well now we're talking $5,000 per month and gee the owner can get an even bigger BOAT!

Now, here's some really crazy numbers for you.  The XYZ Dealership has 3,000 systems that are under a cost per page contract and each machine averages 10,000 pages per month.  The average monthly page volume is 30 million pages!  Adding just .001(one thousands of a penny) per page will give a profit of $30,000 dollars per month and a cool $360,000 dollars for the year. Now we're talking about a really really big boat!

Can the 3,000 systems averaging 10,000 pages a month be achieved, you betcha, it may take awhile but the opportunities are there especially with the emergence of managed print services in the last few years. 

Most profits from dealers go right back into the company, higher wages, additional people, new technology, cost of living.  I just thought it was neat run the numbers and see where they came out and have some fun!!

-=Good Selling=-

Polling Copier Sales People #8

The Print4Pay Hotel consistently runs polls among our members. Global membership is now over 2,100 members from 127 countries.

Our membership includes Dealer Sales People, Dealer Owners, Manufacturer Sales People, Sales Managers, Service Engineers, Customer Service Engineers, Dealer Sales Managers, Product Managers and Management.

I urge everyone to become a member, talk to your peers, exchange ideas, share competitive quotes and get a daily does of MFP Inspiration.

P4PHotel members responded with these answers in recent polls on the P4PHotel Message Boards.


Managed Print Services Poll:
Question: Is your company going to offer Managed Print Services

40% Yes
17% No
43% We already have it in place

An astounding 83% already has Managed Print Services in place or will enter the market!!

Monochrome Segment IV CPP Poll:
Question: Monochrome Segment Cost Per Page Poll 31-45ppm (what do you charge)

.015 and over 0%
.013 - .0149 0%
.011 - .0129 5%
.010 - .0119 29%
.009 - .099 14%
.008 - .0089 24%
.007 - .0079 19%
.006 - .0069 0%
.005 - .0059 10%
under .005 0%



Cost Per Page Poll:
Question: Monochrome Segment V Cost Per Page Poll 46-69ppm (what do you charge)

.016 and over 0%
.013 - .015 0%
.010 - .012 8%
.007 - .009 73%
.004 - .006 19%
under .004 0%


-=Good Selling=-

Art Post

MFPs "14 Benefits of Leasing"

It's always good to review the basics, and to remember the basics when explaining equipment leasing to a client that is new to leasing office equipment. It's also not a bad idea to keep this in your portfolio!

1. Why Lease?
Leasing provides your customer with the use of the equipment for an agreed-upon monthly payment for a fixed term.

2. Tax Benefits:
Your customer can deduct their monthly lease payment as an operating expense. Leasing also helps them avoid the Alternative Minimum Tax (AMT) by reducing their AMT tax liability.

3. Flexibility:
Your customer can structure payments to fit their budget.

4. 100% Cost Coverage:
You can include “soft” costs such as shipping, software and installation right in the lease.

5. Technology Changes:
In three years the technology can and will change for the better. By leasing your customer will be forced to look at the new technology and see how it helps your customers business

6. Conservation of Capital:

If their money isn’t tied up in equipment costs, they are free to spend it on other items such as inventory, advertising or personnel.

7. Easier Cash Flow Forecasting:
Fixed monthly payments help your customer budget money into the future.

8. Fixed Payments:

They can lock-in payments now... and avoid the risk of inflation in the future.

9. Preserves Credit:
Leasing doesn’t tie up your customers line of credit. So you have more capital at your disposal
when you need it!

10. Longer Terms:
Many banks only lend money short-term, usually 12 to 36 months. But leasing lets your customer extend your term up to 72 months!

11. Purchase or Renewal Options:

At the end of your lease, they may choose to purchase your equipment, upgrade to
new equipment or continue to lease at substantial savings. Of course you do not want them to renew but you can write a service contract and keep them until they are ready.

12. Insurance:
Have your customer show proof of insurance at the lease signing or with the first bill and save them $5-$50 each month.

13. Service…Include it in Lease?
There are many opinions on this however there are a few things to consider. At 36 months, which is basically interest free it will not cost any extra to put the monthly service cost in the lease. At 48 or 60 it can cost the customer. Separate yourself from the competition and
break it out on a separate Cost per Copy Agreement. If you still include service in lease be very confident on the anticipated volume.

14. Return on Investment or (ROI):
Do a cost analysis including current machine capabilities, current CPC, supplies on printers, current lease, productivity & options they can have. Do they ever go to Kinko’s or Staples for copies? Show the customer a little savings and they will give you the key to the executive
washroom. If the cost is more stress productivity and keeping people in the office/desks and the new features and benefits.

-=Good Selling=-