14 Reasons to Lease Office Equipment (Printers & Copiers)

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 your money is not 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. However, if your customer is in a flood prone area then they need to take the insurance because the insurance will cover flood damage as I've noted on the print4pay hotel forums. Most BOP policies do not cover flood!

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=-

5 Awesome Tips for Leasing Office Equipment

With 32 years selling office equipment, I've seen many ups and downs in the economy. Each uptick and downturn presents unique issues for all of our clients.

When the economy is booming, you'll have clients that could outgrow the systems you leased to them last year and they still have 2-5 years left on the lease. When the economy is struggling you'll get calls from clients who are struggling to make their lease payments, what they leased a year or 18 months ago is now a burden because they don't have the work and can't keep up with the payments.

So, what are we to do?

In the past I've had calls from clients who are having a rough go of it, in particular one account who leased equipment two years for an office they closed a few months ago. Now they have two sets of identical equipment and struggling to keep up with payments. I was called in to see if there was any way I could reduce the payments either with upgrading and buying out the old equipment. The bad news I have to give to the customer is that I couldn't do anything with either of their leases. Both of them are only two years into a 60 month lease and both have optional buyouts attached.

Just the other day, I noticed that one of my clients was coming close to the end of a 36 month lease. We spoke about the end of lease options but then informed me that he was not financially in a position to lease (that tells me that they may have entered into a chapter 7 or 13 bankruptcy), thus he asked for the purchase price of the system. I was more than happy to help, I received the buyout and it was a whopping 40% of the purchase price based on a 39 month term.  Really? Why do leasing companies need to do this......I'd be more than happy to say that the leasing company is Everbank (so buyer beware).  I then told my customer to call the leasing company and negotiate with them and always keep in mind that they don't want the equipment back.  You always have the edge over the leasing company, they may not act like you do, however when push comes to shove they don't want it!

Keep in mind that when I present a proposal, I give my clients the option of how long they wish to lease and the type of buy-out option at the end of the term. Most customers will opt for the lowest payment, meaning they go for a 60 month term and the option to buy at the end of term.

Here's some points to consider when explaining the leasing options:

1. Always try to get the customer to commit to the shortest term possible that will meet their financial needs.
2. Explain the advantages and the disadvantages of a Fair Market Value Lease and a $1.00 purchase option lease.
3. Explain the how the equipment needs to be returned if they enter into a Fair Market Value Lease.
4. Explain the additional charges such as insurance and documentation fees.
5. Read the lease yourself, if you're not comfortable with the contract, don't give it to the customer to sign.

Getting back to my client, where they have the extra equipment and they need to lower their payments. My only idea is to have them call the leasing company and see if the leasing company will start a new lease for them. It means that would have to resign for 4 or 5 years, however they would get what they need in order to make ends meet (lower payments). On the other hand I'm not even sure if leasing companies will do this.

BTW, if you really need a top notch leasing company that will cater towards the dealer and the customer I recommend LCA leasing. They are not the biggest (which is a good thing), however dealer and customer support is out of this world!

Art Post

Selling Copiers & MFP's "1 Awesome SellingTip"

"Sell Quarterly Payments….today"

It's with great pleasure that Scott Murr allowed the Print4Pay Hotel to share "Sell Quarterly Payments....today".  It's a good read and has it's place in our talk tracks about financing.  Enjoy!

In today’s market we have seen gross profits shrink and every deal is extremely competitive.  Price is a key component of every solution.  Sales reps often come in with similar solutions and look to win a deal based on being the lowest price.

The majority of sales professionals out there offer a custom solution in terms of products but then offer a cookie cutter lease product to go along with it.  While the product is critical, how the payments are designed can be the deciding factor on who wins the business.  You listen to your customer when it comes to the applications they need from their business solution, but do you ask the questions and craft solutions based on how they would like to pay for your solution?

What is a customer’s biggest pain point aside from an asset not performing to the customer’s expectations? The answer is billing.  If you sell a 60 month lease, that means you are taking 60 chances for your customer to have a bad experience with your solution.  60 times for cash to be applied wrong.  60 times for a customer to be billed incorrectly and incur late fees.  60 times for a bad experience with the lessor’s customer service department.  You can cut that down by simply selling quarterly payments.  If you go quarterly, now you only need the lessor to bill it correctly 20 times.

1,000 Ways to Increase MFP Sales

Really, did I say 1,000 Ways to Increase MFP Sales.  Yup indeed I did.  Over at the Print4Pay Hotel forums there are over 100,000 threads related to MFP's from the top sales people in the world.  The Print4Pay Hotel forum was founded back in 2002 and to date we have over 2,300 registered members from around the world!

Now, I didn't say that I had them categorized in a list, however if I did, I'd be getting BIG BUCKS for them. The idea of the forums is for sales people to share information that will help them close additional sales. Let's face it, I've been a down the street rep for 31 years and I still don't have all the answers and even though I work for a large dealer we still don't have all of the answers alss.  However, on the Print4Pay Hotel forums there are expert reps that are willing to help and share information with others.  Let's say that I need  help with a fiery question, I know that I'm not an expert and there are very few resources I can turn to from the dealership that I work for. Realistically some of the answers you get back from the manufacturers don't make a bit of sense either.  This is when I turn to the forums to post the question or questions and in turn can get the responses I'm looking for or get some real world advise as to what will work, will not work or someone else has found a creative workaround!

So, I'm gonna list a few of them here and I urge you to follow this link to be a Print4Pay Hotel member, btw, it's FREE, no charge, nada, all we ask is that you register with correct info and none of the BS info like Mickey Mouse, or 908.555.1211 for a bs phone number. I personally approve every member to make sure we have people in the industry on the forums and not end users. On to....1,000 Ways to Increase MFP Sales!

1. You gotta give it time and stay in the industry for more than three years, this will allow you to upgrade existing accounts.

2. You gotta make at least 100-200 touches per week. A touch can be anything from an email, a phone call, a drop in, or a meeting, the sales will come believe me!

3. You gotta eat, sleep and breath the industry! It will show when you meet with clients and discuss hardware or software solutions.

4. Be creative, think out of the box for hardware and software solutions, just because the customer wants a (5) 45 ppm systems does not mean those are the right systems.

5. Eat, sleep and breath ROI, nothin is finer that being able to save a customer money and be able to place hardware and software solutions without increasing their costs (matter of fact we have ROI spread sheets posted on the forums).

6. Stop with the 60 month leases!! Sell the shorter term and SELL the finance savings, proposing 36 month leases will have you back in the door in the 30 months instead of 44 months!

7.  How about this one, the customer does not want to lease for 36 months, wanted to buy, however they don't have the funds to BUY now! Well suggest a bakers dozen lease (more on this in the forums)

8. - 1,000 That's all I'm gonna give you here, go to the forums get registered, log in and I'm sure you'll find at least 1,000 Ways to Increase MFP Sales.

Print4Pay Hotel Registration

-=Good Selling=-

DUDE "Where's My Copier"

Really, where's the copier you took outta here three months ago!  The leasing company is still billing me because they're stating that they don't have the copier you took outta here, plus since you didn't get them the copier in time, they've now renewed my lease and they told me I have to make another year of payments!!  DUDE...Where's My COPIER!

I can imagine there's been many conversations like this between customer and manufacturer over the years. It's no secret that at the end of an FMV (Fair Market Value) Lease someone has to step up and make sure the copier goes back to the leasing company ON TIME!

So, who's to blame the copier rep, the copier company, the leasing company or the customer (lessee). Well, if it doesn't go back in time it's everyones fault except for the leasing company.  Remember this, "the thought of a cheap price is long forgotten after poor service". 

Good work with no screw ups does not come cheap!  If you've received a quote for a new copier, and they are the cheapest (I hate that word), plus they are promising to get the copier back on time means you've got a problem.  Don't get me wrong I've seen many screw ups from the lessee side also such as these wonderful quotes, "we can't find a copy of the original lease", "what do you mean we have to ship it back", "we have to pay to ship it back", "we didn't realize our lease ended two months ago and now we have to keep the copier for another year".

"Dude where's my copier", should never have to be a phone call that you'll have to make in the future.  Copiers companies that are on the ball will present you with an iron clad SOW (Scope of Work) on how and when it will be done and what's expected on your end and their end to make this happen. If the company you're dealing with does not present you with the SOW for the return then you'll need to move on to the next vendor.  Just and FYI, all of this should be discussed when meeting with the copier companies reps, it will quickly narrow the field of vendors!

BTW, if you want to do business with Professional Expert Copier Companies and not the cheapest (I hate that word) then click here!
-=Good Selling=-

15 New Copier & MFP RFQ's & RFP's

Really, we've uploaded 15 Copier & MFP RFP's & RFQ's in the last week on the Print4Pay Hotel forums. In addition we've also posted an additional 5 leads for copiers & MFP's for the commercial sector. 

The Print4Pay Hotel forums is a sited dedicated to Copier & MFP professionals.  The heart and soul of the site is our forums. Our forums give our industry a secure forum to discuss sales, marketing, solutions and talk about the industry as a whole.To date we have over 1,930 global members, our site generates over 100,000 page views.  Our members are dealer owners, dealer principals, sales professionals, sales managers, and manufacturers representatives.

Here's some of our recent threads for RFP's & RFQ's:

Copier RFP in DC


Xerox Color 550 Copier/Printer Lease in NC

NBS Print & Copier Support Services

OMG! 100 MPF plus unit RFP with 11mil annually!!!!

Solicitation for Wide Format Digital Copier, Plotter and Scanner 

XEROX COPIER MAINTENANCE

36 Copiers in Ohio

COPIER MAINTENANCE SERVICE AND SUPPLIES AGREEMENT

Copier Bid in Washington, DC

45 ppm color in North Carolina

52 Copiers in GA 

COPIER MAINTENANCE & SUPPLIES FOR THREE (3) YEARS

100+ units for RFP in MidAtlantic

Printer Repair Services in NJ RFP

Kansas 35ppm device

Membership for the forums is FREE, access to the secure "leads" forums can be purchased monthly and a yearly Premium Membership is less than $7 per month, but wait you get more with a Premium Membership you'll also gain access to all off the manufacturers forums and our secure "P4P Document Library"!  The P4P Document Library features documents that I've used in my copier sales career to increase sales and marketing. 

Here's a sampling of the documents I've posted:

Advantage of Color


14 Benefits of Leasing MFP

P4P Hotel's Document Imaging Glossary

Envelope Press from Ricoh

Copier Security Booklet

Global and N America Print Production work flow forecast

HP Cost Per Page Chart
 
Simple Excel Proposal Spreadsheet
 
A3 vs A4 Competitive Workbook
 
Just a short sampling of the documents, click here for a FREE membership!
 
-=Good Selling=-

What's Your Average MFP Copier Lease Sale?

We posted this poll on the Print4Pay Hotel foums a few months ago. 

I know what my average lease sale is however wanted to hear from others.  I recently had exchanged a few emails with a leasing company that I wanted to do business with, however they made a statement that the lowest amount they would fund is $20 or $25K, I can't remember which it was. Any how their (leasing companies) statement was that $22,500 (I'll meet them halfway) was the number that they found to be the average copier/mfp lease sale and would they would not take a deal for less than that.  Funny, if the $22,500 was the average should there have been deals under that????

Ah, enough said on that, here's how our Print4Pay Hotel members responded when posed with:

What's Your Average Lease Sale?


$1,000 - 2,900   =  0%
$2,901-  6,900   =  18%
$6.901 - 9,900   =  53%
$9,901 - 14,900 =  12%
$14.901 - 19,900 =  0%
$19,901 plus        =  18%

So, 71% all all leases were under $9,900 and a whopping 83% were under $14,900.  Not sure why the total come up with 101%, and I'm not even going to try to figure that out.  We're going to continue to keep this poll open on the Print4Pay Hotel forums and we'll come back to this in a few months to see where the numbers are then.  I'm betting Dollars to Doughnuts that findings will be similar.

What was that leasing company thinking about? 

-=Good Selling=-

Print4Pay Hotel Weekend Copier & MFP Updates! 11/15/10

Print4Pay Hotel Weekend Updates!

Here's some of serious content from the last few days that's been posted on the Print4Pay Hotel's forums in recent weeks. It has been busy with over 37,000 page views, and 39 new members for the month of October.

Most Viewed Threads:

How Much do National Copiers Vendors Charge to Decommission a HDD?
Rumor has it.....
These CPP Pricing Documents were just uploaded
Total Cost of Ownership
Does any National Copier Vendor still have their own in house leasing service?
OMG! Copier Rep Turned into POS! Read this!

Most Interesting Threads:

New Samsung 11 x 17" Colour MFPs due Oct 01 USA
What is "Workflow"???
Most Prevalent Third Party MPS Providers
New Ricoh Link
The Effect Currency Evaluations have on the MFP industry

Posted Price Quotes:
KonicaMinolta bizhubc280 cpp pricing
Canon iRC 2550_3080_3080i cpp pricing
KonicaMinolta bizhub PRO 950-PRO 1050 cpp pricing

Leads, RFP's & RFQ's:

RFP for 2 50ppm (one color) for Northeast US
RFP for one 50ppm mfp in Ohio
RFP for 8 MFP's in the North East "Expires 12/8/10"
RFP for 31 MFP Copiers "Expires 12/13/10"
Lead for 70ppm is South Dakota


The Print4Pay Hotel is the world's only business/social site dedicated to people who work in the office equipment industry. Go ahead log on.....become a member of the Print4Pay Hotel!

become informed, share and maintain your knowledge.

-=Good Selling=-

Dirty MFP Leases, Done Dirt Cheap!

Who owns the customer when an Office Equipment Dealer or Direct Branch introduces a third party vendor (Leasing Company) for the financing of the MFP System? 

This question has been asked over and over in our industry.  Here's paragraph from Frank G. Cannata that is posted on Great America Leasing Corp's web site.

"The leasing companies who provide these "low rates" have to inflate the residuals in order to make it work. With the transition from analog to digital, it became painfully obvious that the residual values on the leased inventory were inordinately high and totally unsupportable.



The problem arises at the end of the lease when the dealer elects to go with another leasing provider. That is when the fun begins. It starts with fuzzy or vague end-of-lease requirements. The term "evergreen" is used when the customer has passed the period that allows him or her to terminate the lease. They often are extended without the consent or even knowledge of the customer. But that is only half of the story."

Frank also mentions the evergreen clause and also comments on how dealers try to maneuver around some of the end of lease terms to help the customer.  All of this has been going on for years, it's nothing new to us in the business. 

What's new? The first time I saw it was from Wells Fargo (if you know me you know how I feel about them, making a church make 12 extra payments on a lease because the church notified them a month earlier than what the lease contract called for), after the customer requested to return (customer sent Letter of Intent) the system, WF would then contact the customer and offer the customer to buy the unit from them, plus they would finance it!  Basically, cutting out the dealer and offering a lower buy price to the customer than what may have been offered to the Dealer or Direct Branch.  For all intentions Wells Fargo was now in the business of selling "off lease" copiers to the end user or the Dealers/Direct customer.

Now, just the other day I received a "ship to" location to return a Ricoh device to CIT.  Low and behold at the bottom of the page CIT had a quote for the customer to keep (buy) the unit, along with that they were willing to refinance the unit.  I'm guessing that CIT is now in the business of selling "off lease" copiers also.

My beef is that in all of these deals, the Dealer or Branch brought the leasing company to the party. If it were not for the Dealer/Direct Branch the leasing company would have never had the opportunity to engage with the customer. Is nothing sacred anymore?  Personally with this kind of end of lease behavior I couldn't give a rats ass about  either CIT or Wells Fargo and what happens with their device.  It's our (Dealer/Direct) customer and if you want them back then give the dealer incentives to keep the old unit instead of massing hundreds of thousands of old copiers in copier bone yards that are scattered across the country.

On the other hand there are those that say that Dealers and Direct Branches made their own bed by engaging Leasing Companies that had the lowest rate factor and the highest return on the copier. That's a good point, and you get what you pay for.  All Leasing companies are not created equal, some are very good like Great America and Clune Leasing, some are learning by their mistake and making changes, and some are still out their to enforce their contracts to make headaches for everyone.

Dealers/Direct need to take a more long term approach with who they make their bed with and those who lease need to read the fine print before they sign on the bottom line!

-=Good Selling=-

Print4Pay Hotel Weekend Industry Threads for 8/15/10

Take a trip to our P4P Value Page get access to all forums, rfp's, rfq's, proposals, quotes, and leads! pssst! We've now linked and uploaded leads, RFP's and RFQ's for more than 1,020 systems!

Please take the time think about a Premium Membership, not only do you get access to all of the forums, but your contribution keeps the site running!

We've added New Content to our P4P Document Library! Every week, I'll be uploading a new file or document that I've used for research, quotes, pricing or marketing<\b>

Please support our Advertisers Polek & Polek, Lucas Distributing, Print Audit, Cybercon Services (Dealer Consulting Service), Ratio

Recent Blogs of Note

MFP Printers, Copiers "Whats The Total Cost of Operation"

Xerox Phaser 6125 "What's the Total Cost of Operation"

Making Twitter & Email Marketing Work for You

The 7 Cardinal Virtues of Selling

How managed print services (MPS) can add efficiency and streamline operations


Interesting P4P Forum Threads

Facebook and Copier Sales

ITEX 2011 Expo/Conference “Call for Speakers” Deadline Approaching!

A3 vs A4 Competitive Workbook Document

Rumor has it.....

“When prospecting via phone and the contact picks up, do you ask for their time? Or (Document)


Most Viewed P4P Forum Threads

Samsung Offers Embedded Common Access Cards for More Secure Multifunction Printers

Canon U.S.A. Honored with Six Awards from

Three Brands "New Poll"

Search and Print to Any Ricoh HotSpot MFP While On the Go

Fax on the imageRUNNER ADVANCE 6075


New Leads, RFP's & RFQ's Uploaded!

4 MFP's Need RFP response by 8/30/10

Have a lead for 3 HV MFP's in Elmont, NY

City Copier and Printer RFP for Colorado "due 9/16/10"

Have a lead for 11x17 color MFP in Up State NY!

Lead" Copier Stolen from Auto Dealer!

Upstate NY, City Needs HD system for 46K per month

Colorado Issues RFP for Production Copier Lease



The Print4Hotel Team

Print4Pay Hotel Weekend Updates 6/13/10

We're almost at the halfway point for the year, I hope everyone else is doing well with business.  From my last updates quotes and business is much better than this time last year, just hoping we can continue to ride the wave for many more months!

Most Viewed Threads:

Print4Pay Value Membership
Rumor has it.....
Canon to Acquire Lexmark? (400 page views already)
Panasonics A3 Exit
At the end of the MFP lease, who pays....?
Who is InfoPrint Solutions and what is it’s relation to Ricoh?
MFP Refurbishing & Recycling

Interesting Threads:

Need Help AgainArmy backs off $243M enterprise.....
Ricoh MPC 6000 "Color Print Control"

smb scanning and 2008 SBS
Canon USA Awarded 40.3 million dollar deal!
Print Audit® to Showcase Benefits of Print Audit for Law

Posted Price Quotes:

Ricoh PRO 906EX
Xerox 6204 with Color Scanner
Xerox 8245 Color Wide Format

Leads, RFP's & RFQ's:

Huge Mid-West Copier Bid
RFP for two 55ppm mfp systems in New York!
MFP Lead in Fairfax, Virgina
Lead for 18 MFP's in Mid-West US 240K per month
ROANOKE RAPIDS — Tomorrow, Roanoke Rapids City Council
Lead in Salina, KS
Ricoh W3600 Wide Format Lead in New England!

The Print4Pay Hotel is the world's only business/social site dedicated to people who work in the office equipment industry. Go ahead log on.....become a member of the Print4Pay Hotel!

-=Good Selling=-

Finding Opportunity in Adversity "Guest Blogger"

While trying to get one of my Real Estate deals approved today, I reached out to an old friend in the leasing business. Kevin Clune of Clune Leasing helped me better understand the leasing industry as a whole and even updated me on some new legistation that's being introduced. Kevin provided the piece below for our "guest blogger" of the month!

"It proved to be the greatest opportunity of my Life," said Colonel Tom Schaefer, one of the U.S. hostages held in captivity by Iranian insurgents for 444 days in 1979-1981. Col. Schaefer was the senior military attaché at the American embassy at that time. He served as the keynote speaker at a recent National Equipment Finance Association Conference (http://www.nefassociation.org/).

At the risk of trivializing the ordeal which Colonel Schaefer endured, I want to attempt to apply the lessons he conveyed to the current business climate.

I felt that Col. Schaefer's message couldn't have been more timely for myself and other business owners who are attempting to adapt to a new marketplace and business environment. The conclusions I found applicable to my business and my reactions to the current state of the economy can be summarized as:

1.Control your attitude.
2.Stay focused on your goals.
3.Learn to be more creative.
Colonel Schaefer spent many months in solitary confinement, cold confinement and in cramped quarters. He stated that the one, and probably only thing, you can control in this kind of situation is your mindset. Thoughts of once again being reunited with his family and hearing the sounds of a baby crying were things that gave him the resolve to endure the pain and discomfort.

If adversity is met with despair, your business will suffer. Once you are determined to adopt a positive and an entrepreneurial mindset rather than one of negativity and restraint, decisions on how to make the necessary adjustments to stay competitive and productive should follow.

•How might you take advantage of the fact that there are now fewer competitors in almost every industry?
•Would upgraded technology and/or a change to your process reduce your overhead costs?
•Can an equipment lease be the answer to the reduction or loss of your bank lines of credit?
•Will you be poised for increased demand when the economy rebounds?
The ability to make a profit by offering a needed product or service at a competitive price is the basic goal of any business. If demand for your product or service has declined, one may wonder if there still opportunity for growth. Colonel Schaefer's goal was to survive the adversity of his situation, regardless of the challenge. He exercised as much as possible to maintain his strength and health. Can you identify the obstacles to your success and ultimate survival?

•Are you staying healthy, nimble, and competitive?
•Has your product or service been weakened in the downturn?
"Necessity is the Mother of Invention" is an often quoted cliché, but it is a good response to the current situation. Colonel Schaefer had charmed his captors into providing him with reading materials. When they brought him some magazines written in German, a language in which he had become fluent while in captivity by reading German language books, he was able to stay informed on the current state of affairs. He learned that an attempt had been made to rescue him and the other hostages, none of whom were confined with him. This gave him the hope he needed to endure the imprisonment.

•Are you tuned into the marketplace?
•Can you identify the needs of your customers?
•Are you willing to create a new product or service to meet demand?
This could prove to be the greatest opportunity of your life.

Kevin F. Clune, CLP
www.clune.net

-=Good Selling=-

Remember When Leasing Office Equipment Was Easy?

An ongoing topic on the Print4Pay Hotel forums titled "Time in business requirements" has many members talking about the how the Copier Equipment Leasing Business has changed in recent years.

I can remember when 97% all deals were approved, and if you were giving one leasing company first crack at all of your apps, most of the times they would approve the good, the bad and the ugly (maybe not the ugly, however they would take almost everything you gave them).

Fast forward to today and we find that during the last two years all of the major Copier Leasing Companies are pretty much creaming all of the applications, if the deals got a spot or blemish it's not going to get approved by them. Although some dealers have had some success with newer, smaller office equipment leasing companies that are taking some risk. A few dealers have even turned to thier local banks or the customers local bank for equipment financing in order to get the deal done.

In the last two years, it's probably been the worst times for both the copier industry and the office equipment leasing industry. Hey, who are ya gonna pay first, the payroll and ultilities or the copier lease? Pretty much, that's been the sign of the times. Real Estate, Mortgage, Construction, Title Companies are treated like Plague by the leasing companies.

Things you can do to help get those deals approved:

1. Always submit a fully completed application
2. Have the customer agree to a much shorter term lease, 24 and 12 months
3. Have the customer pay down the lease, if it's 10k for the equipment, ask if they'll put down 3K or so.
4. Get a PG


I've also got a sure fired way to help close deals when leasing...........want the details send me and email (art@p4photel.com)  and make sure you're a member of the Print4Pay Hotel.

-=Good Selling=-

Top 7 Print4Pay Hotel Blogs

Since there's not a lot goin on in the industry lately....well wait a big annoucement did come from Canon that they had struck and agreement to supply FEDEX/Kinkos stores with Canon devices! That's a nice deal, especially with Canon now having access to the Oce Wideformat devices. What's next Staples, Office Max?

Here they are:

Too often in sales we get caught up in the day to day work of research, solutions, speeds, feeds and analysis and forget some of the basic sales skills that we learned.  Selling Copiers and MFP's "Get Back to the Basics"

Just last night on cable news, I listened to a report that service companies are enjoying the recent decline in the economy because more businesses and consumers are ...MFPs, Refurbs, Repos and Pre-Owned

"Eric the Office Worker" is now working at Acme Buy. "Eric the Office Worker" is a Customer Sales Rep, and helps customers fulfill their orders as the customers visit the Acme Buy Showroom. Ecopy Desktop & "Eric the Office Worker"

Thought about this the other day in car, made myself pull over and jotted down a few notes for everyone. I've complied a laundry list of points that I have adhered to in order to maximize Gross Profit. Selling Copiers " How to Maximize GP"

 I ask you, what do customers hate more when they are dis-satisfied with Office Equipment Leasing Companies? Yep, it us the sales people that put them into a bad lease. Most reps who have been in the business awhile know about some of the pitfalls of a good equipment leasing company and a not so good one. Top Copier Equipment Leasing Companies for Office Dealers

 The last eighteen months in the New York Metro Area has truly been a "Season of Changes" to remember!
Top Copier Equipment Leasing Companies for Office Dealers

 Most multifunctional copiers can be programed to count letter size paper as one click of the count meter (they are default from the factory this way), plus they can also be programmed to count 11x17 as one click (not the default program from the factory). MFP "Wars" Single click 11x17

-=Good Selling=-

Leasing Copiers "Who Stole the Cheese!"

Sniff and Scurry, two of my favorite mice.


While going through my emails the other day, I had an email from a client in the South. The email was in reference to "what is really the interest rate for a Fair Market Value lease for a copier."

The email stated that for the life of them they could not figure out the interest rate and was asking for help and advice. Well, asking me to figure out the interest rate is like asking me to get my dog to stop sniffing every pole or fire hydrate he passes. Not going to happen!

What I did enlighten them on is how copier companies figure out the monthly lease payment.

First, there has to be a rate factor that the salesperson gets from either the leasing company or the copier companies management. There are many different rates from many leasing companies and the rate factors change with the term of the lease (12,24,36,39,48,60,63 months), also the dollar amount of the lease would also change the rate factor along with the option at the end of the term (buy out).
There are primarily two different types of leases used:

Fair Market Value: Leasing company gives you the option to purchase for a percentage of the purchase price. This type of lease has the least amount of interest. True lease, tax deductible and write off every month

Dollar Out: You own the equipment at the end of the term for one dollar. This lease will have a higher interest rate than Fair Market Value. This is a finance lease and may not be depreciated like a true Fair Market Value Lease.

What's more popular?

The Fair Market Value lease, basically has four options at the end of the term. A) Ship back to leasing company at your expense at the end of the terms. B) Renew the payments at the end of term for 30 days, 90 days, or longer, check the lease that was signed. C) Trade the equipment back to the dealer and start a new lease, the dealer will then return the system for you. D)Buy the equipment from the leasing company for Fair Market Value.

How was the Cheese Stolen?

So, who is stealing the cheese? Well in this particular email, the customer wanted to find out the interest rate, which I couldn't help with, however I asked them to send me a copy of the quotes and I would tell them how much interest they were paying over the term of the lease. The next day I received five quotes.

For you newbie’s out there, as long as you have the monthly lease amount you can figure out the lease purchase price of the system or at least come close. You take the monthly dollar amount of the system and divide by the rate factor. In this case the customer was quoted $762 per month for a 60 month lease. They were also quoted a purchase price of $26,375 and they had a buyout of $9,142. This made the lease base according to the Direct Branch $35,517.

Now using an average rate factor of .0200 we take the lease price of $762 per month and divide by .0200 which equals $38,100 that would be funded to the Direct Branch for the system that had a purchase price with buyout of $35,517. Well...., we can see that someone has "stolen the cheese". If you now take the purchase price with buyout that was quoted at $35,517 and multiply it by the fair (60 month) rate factor of .0200 (fair for over $20k), the customers payments should have been $710.34. Hence the customer is getting ripped for $52 per month on a 60 month lease, thus paying an additional $3,120 over the term of the lease.
What's a rate factor?

Rate factors are given from the leasing company to the dealer or direct branch. A rate factor of .0200 means that the cost to borrow is $20.00 per thousand dollars. Thus if you wanted to prove the above numbers you would multiply $20.00 x 35.517 which would equal the payment of $710.34.

This was not a cost per copy lease, nor was service and supplies built into the lease, it's basically a game that has been played in the industry for years. Not only are they making money on the hardware but also "padding" the lease for additional profit!

To be fair, there are many different rate factors from different leasing companies, in this example I used an average rate factor. There are lower rates and higher rates that could either increase or decrease the amount to the dealer or direct branch. Most dealers and direct branches are in the average that I quoted.
Don't Blame the Salesperson

Don't blame the salesperson, most of the time the salesperson is not even aware of the average rates, there is a finance department at the dealer or direct branch that "pad" the rates to the sales person and or dictate that they HAVE to use these rates or ELSE! The salesperson is not getting the extra dollars for the unit.

In the instance above, the salesperson probably quoted the right purchase price, however they had to use a "padded rate" which increased the lease price per month. The branch received the additional profit from the lease.

Word to the wise, always when leasing ask for a purchase price for the equipment or the total amount of the order. Do some homework; ask what rate factor they are using and how they arrived at the price per month for the lease. If you think you're paying too much, you probably are.

How can you find fair rate factors? Well, that's probably the hardest part of the equation. You can always send me an email and I can give you the average for any dollar amount or term. Then you can do the math!

Oh, by the way, there are many dealers and branches that pass along rates without padding the rates, I think there are more of these than those who pad. I also think that this "padding" is much more common with direct operations than dealers. Just my thoughts!!


-=Good Selling=-

MFP Weekend Industry Notes 10/23/09

Gathered from Print4Pay Hotel Members from around the world and a few moles in very good places!

A British company introduced the world’s smallest printer. PrintDreams launched a small handheld device, called the PrintBrush, which is moved by hand across a sheet of paper to create an image. It is wireless, and has a small inkjet printing mechanism. To fully image a letter size piece of paper requires moving device back and forth across the page, and from top to bottom.

- In an interview, Canon Vice President, stated that the company “has intentions” of making a move similar to Xerox in regards to the acquisition of computer services provider, ACS.
- “Definitely, it’s time for us to go into this area” said Chng.
- “At the moment it looks like we’re wide open to options” said Lim Kok Hin, Canon Senior Director & GM.

- Computerworld magazine reported that McCormick & Co. had been hit with the Blaster worm (computer network virus) that was being spread by infected desktop network printers. (brand of printers not named). Other worms that may infect unprotected printers are Sasser and Conficker.

- Another patent infringement lawsuit. U.S. Ethernet Innovations LLC, which has acquired the Ethernet technology patent from 3Com Corp., has sued Apple, Dell, Gateway, Hewlett Packard, Sony and Toshiba for patent infringement.

- Azerty, a division of United Stationers, announced it has launched “HQueue”, a managed print services program for copier dealers & VARs.

- Xeikon, a division of Punch Graphix of Belgium, announced it has sold a Xeikon 6000 production color system to The Colad Group, a printshop in Buffalo, NY.

- Olympus, which makes high speed color inkjet printers for Riso (ComColor series), is previewing a new product using its own name. The new product (no model# yet), will sell for approximately $400,000, will uses rolls of paper, handle up to 2 million pages per month, and have color click charge of 5 cents for full color. Image quality unknown.

- What are expectations for sales reps selling managed print services?(according to ImageSource magazine)
- 20 voice to voice contacts with C-level decision makers should yield:
- 7 appointments, which should yield
- 4 quick-view print environment evaluations, which should yield
- 2 closed MPS contracts

- GreatAmerica Leasing Corp. announced it now has $1 billion in assets, according to CEO, Tony Golobic.

- GE Capital Leasing announced an 87% drop in earnings.

- Interesting statistics from BEI International about copier service:
- Average number of managed copies/prints per technician is a little over 1 million per month
- Average number of service calls per technician is 66
- Average service call length is 75 minutes
- Average numbers of calls per day, per technician is 3.7
- 4.83% of all copiers working in field are analog
- 60.91% are digital
- only 5.9% are color

- LaserCare Technologies of Los Angeles, CA announced that it has recycled its 300,000th printer cartridge since it started business 20 years ago, according to president, Paul Wilhelm.

- American TonerServ Corp. of Santa Rosa, CA, is a competitor to LaserCare, and its CEO, Chuck Mache, claims the company is selling more than 1,000 cartridges per day.

- Oce’ announced it sold one of its Oce’ VarioPrint 6250 production monochrome systems to Integrated Book Technology of Dulles, Virginia to produce on-demand books.

- Oce’ announced its production print engines will be used by a company which is printing the world’s first individualized newspapers. InterTi GmbH of Berlin, Germany will be launching “niiu”, which will be based on personalized information from end user’s choice of international news sources, blogs and RSS feeds. They will be using the Oce’ JetStream high speed color inkjet system.

- More details on Oce’s financials:
- 9.9% drop in revenue year over year
- Operating loss of 25 million euros
- Eliminated 1170 employees, towards goal of total reduction of 1500
- Incurred 32 million euro restructuring costs (employee severance packages)
- Sold 7 million euros worth of its internal lease portfolio
- Sold some selected real estate holdings
- Color share of revenue fell from 25% to 24% due to customer reluctance
to print in color
- Wide format revenue down 19%

- IDC released statistics on document management:
- Executives spend 45% of their time working on documents
- 610 billion emails are sent each year
- 50% of all emails are printed
- 7.5 billion documents are created in offices each year
- 1 trillion pages are printed each year

- A similar company to XIPPA, is RSource of Boca Raton, FL, run by CEO Larry Reid. He announced that he has just hired former Key Bank executive, Allen Snelling, as President of RSource.
- Sharp announced that it will offer X-Rite’s ColorMunki Design product to allow end users to calibrate their computer monitors and color MFP/printers.

- X-Rite announced that its new CFO is Rajesh Shah, formerly of Cadence Innovation LLC, maker of automotive interiors.

- Scotland Yard detectives are asking retailers in the country to stop selling desktop color laser printers as they are being used to make fake drivers licenses. They claim they have found 30,000 fake cards in the last 18 months that were made on color laser printers.

- Freescale Semiconductor, a spinoff of Motorola, announced it is launching a new processor design to be used in future MFPs. The P1022 will offer:
- Dual core processor with each providing 1GHz of speed, or 2GHz total
- 2GHz revealed 60% faster performance than 1GHz
- Rather than one processor running at 2GHz, two 1GHz is supposedly better due to less power consumption (peak of only 3 watts), and less
heat generation inside the copier
- Designed for color or b/w MFPs running from 30ppm to 50ppm in speed
- Possible buyers are generic print controllers makers including Zoran,
Global Graphics, Pagemark & Peerless.

- A dealer in Minnesota, Marco Inc., announced it has purchased Venture Computer Systems. This expands Marco’s reach into Southern Minnesota and Western Wisconsin. Marco was founded in 1930 as a typewriter dealer. Now it offers IT equipment, MFPs and office furniture with annual sales of $60 million, with CEO, Jeff Gau. Jon Eckhoff was owner of Venture. Purchase price not announced.

- Managed print service software vendor, PrintFleet announced that founder Brian Cosgrove is now Chairman and dCEO, and has hired Chris McFarlane as President.

- According to Synnex CEO, Kevin Murai, 70% of all pages printed never get picked up from the output tray. (note from Art: I'm call BS on this statement)

- Z Corporation announced it is now shipping the ZPrinter 350, which makes a three dimensional object using lasers cutting a white substance at 0.08 inches per hour. The device sells for $29,500.00.

- InkStop, headquartered in Cleveland, and owns a chain of stores that refill printer cartridges, announced that it will close all 152 locations in the U.S. due to impending bankruptcy.

-=Good Selling=-

Ask Art "Copier Lease Insurance Question"

Received this email from Philip John another Print4Pay Hotel Member ( I actually got him hooked up with Paradgim Imaging for Wide Format Products) in NY:

Hi Art

Hope all is well. I had a question for you about insurance (it could become a blog topic :) )

My client has a 8 copiers on a 60 month lease with insurance coverage from the leasing firm. In month 24, one of the copier was damaged by a flood situation.

Simultaneously they had also closed one division, so technically they now only need 7copiers.

Is it possible that the lease company receive the payment for damage from the insurance company and thereafter adjust the lease to now reflect a lower payment for 7 copiers?

Or does my client have to get a new copier to replace the old one? (assuming at no extra cost to them)

Thanks for your help.

Philip

Hey Philip:

If memory serves me correctly, the lessee (your customer) needs to file a claim with the insurance company that holds the policy on the lease. They will need to contact the leasing company in order to get the contact information.

Now, since no one knows what the policy states we can be assured of one thing, and that is that the leasing company will be paid for thier loss, and the billing of the lossed copier should stop. Your customer needs to get a copy of that policy to dot the i's and cross the t's. I don't beleive that the lessor (your customer) will have to lease another copier if they do not want to

Here's a side note for everyone in reference to insurance on copier leases, this is a profit center for the leasing company! If you can avoid taking their monthly insurance premium and call your BOP (Business Operating Policy) and have the leasing company listed at the "loss payee". In most cases this may not cost you any additional monies since your company would be covered for "x" amount of dollars for equipment. If not, have them add a rider for "x" amount, no doubt it will be less expensive than the leasing companies policy!

Art

-=Good Selling=-

Leasing Companies & MFP Copiers

I was in the field the other day and stumbled across an existing lease for eight pieces of equipment. The customer was two years into a 5 year lease. The MSRP for the equipment that was stated on the lease is around $210,000, payments should have been about $4,200, however this companies payments were over $8,000!!




At $8,000 per month the deal would have funded $416,000 back to the Direct Branch that sold the deal. Here's the kicker, how when leasing companies for the past three years will not fund more than 150% of MSRP along with holding dealers feet to the fire for overbooked deals.





Sounds to me like there is one set of rules for dealers and another set of rules for Direct Branches. It's deals like this that give reps, branches and leasing companies bad names. The sales person and the leasing company should be held accountable for the big RIP OFF!

-=Good Selling=-

Kyocera Expands Office Equipment Leasing Program

Kyocera Mita announces expansion of it's leasing program with Great America Leasing Corp and Wells Fargo Financial Leasing. Betcha, you thought this was going to be one of those boring Press Releases eh!

When I read the press release I was pleased to see Great America Leasing Corp as a new partner for Kyocera Mita. I have used them in the past and find them to be one of the premier office equipment leasing companies in the US today. Yes, you'll pay a little bit more to have them finance your lease however at the end of the term, you'll be happy with the return policy and the way they conduct business.

On the other hand, I was appalled to see that Kyocera Mita also hooked up with Wells Fargo Leasing. If you're a member of the Print4Pay Hotel message boards, you would have read the horror stories that reps have posted in reference to Wells Fargo Financial Leasing. Did someone not do their homework??

I can tell you of one situation from two of my customers, nearing the end of the term of the lease, where Wells Fargo Financial Leasing actually released the old equipment back to the customer for "x" amount of years with a $1.00 buyout. They did not notify the dealer in advance, they just took it upon themselves to call the customer and offer to release them the copier. One of my customers bit and the other did not. Traditionally, all Wells Fargo leases have a small window of time where the customer can send their letter of intent to return the equipment at the end of term, and if the customer misses this window, Wells Fargo will renew the lease for ONE YEAR! No ifs ands or buts, they are locked in. I hope the people at Kyocera negotiated different lease terms for their customers.

A word to the wise, read the lease you are going to to give to the customer, and if you're not happy with it, neither will the customer.

-=Good Selling=-

Office Equipment Leasing "A World of Changes"

It seems like we've had our fair share of quest bloggers in the last two weeks.

Starting with Trevor Hoffer from Print Audit, and then Dan Donohue from Polek & Polek .

I'd like to introduce our latest guest blogger as Kevin Clune, President of Clune & Company LLC.

Take a trip to the Clune & Company web site, and see how Clune can help your dealership gain extra margins while retaining the best customer satisfaction in the office equipment leasing industry.

A World of Changes


We have seen incredible changes in our industry (leasing/finance) in the past 6 months. Many leasing companies have shut down and are just collecting their portfolios. They've been racked with record portfolio losses and now have an inability to access the capital needed to fund new deals.

We have not seen so much turmoil in our industry since the early 80’s. The prime borrowing rate peaked at 21.5%, unemployment was almost 11% and 12% was a great fixed rate for a home mortgage.

Leasing will be a larger share of equipment sales this year for at least two reasons: Budgets in almost every company have been tightened down like never before—a lease slips into a budget far more easily than a large capital outlay. Additionally, many companies have had their borrowing abilities greatly reduced by their banks. When banks had plenty of money to lend many would pay cash for equipment……..now it’s a totally different landscape.

We also believe that "leading" with a $1 buyout lease is not in the best interest of the dealer. It's a higher payment for the customer AND since he owns it at the end of the lease it is far more difficult to regularly trade them up into new equipment. The $1 buyout rate of .0246 is frightfully high.

We partner with copier vendors so that they can lead with a unique concept that is a true lease (off balance sheet). One of the essential differences in our arrangement is that the vendor owns the machine at the end of the lease. That gives the vendor total control of what options are given to the customer, and the vendor, not the leasing company profits accordingly.

On a standard FMV or $1 lease the vendor gets nothing at the end of the lease. On our plan the vendor stands to make significant yet ethical profits.

Kevin Clune
Clune & Company LLC