Friday, August 1, 2008

The Death of The Copier Dealer



8/2008

I was reading and responding to a post by Ed Crowley about Managed Print Services when it hit me ...wasn't there a time when computer dealerships where like Starbucks; on every corner of every city, town and village? 

I'm not nuts, right? I do remember correctly, don't I? Of course I do, because I worked at an Inacomp and competed with ComputerLands while working at MicroAge. My first computerized accounting system was installed on a IBM PS/2 Model 60 running Novell severing two workstations. 

 So, yes, there was a time when you could open a phone book and the computer section would contain a dozen pages of dealers, software houses, VARs, computer service locations. 

Check out a phone book now - that is if you can find one - and see how many computer dealers are out there; then go to "C" for "copier dealers". 

 Back to the Post - In one of the responses to Ed’s post, this caught my eye - 
 "...the Vendor is about making money and moving their products and services. ... a customer needs to look for a vendor that is well versed in both industries(Copier and Printer) and that is going to focus on a STRATEGIC partnership, not just focused on moving a “box” whether it be some sort of imaging device (Printer, Scanner, Fax, Copier, etc), a service contract, or supplies...

 Agreed - and based on this, I would suggest a RADICAL shift in Paradigm.

Vendors should become "Partners". Remember, vendors push carts full of hotdogs down the street. I also recognize that pulling the "hardware" element out of the existing copier dealer model is impossible. Not because a new model can't make money, rather, the new model is too difficult for "old school" merchants to comprehend. 

I wrote a bit about Matt Espe's quarterly conference call last week. One, small, seemingly innocuous comment stuck with me, Espe said, "...the very low end office black and white continues to go to the retail channel and continues to go from copier technology to printer technology… you're seeing actually some improvement in functionalities clearly at much lower price points by the tier two guys. 

And you are seeing that kind of shift from copier distribution to retail. We don't play there..." From “copier distribution to retail”. It's deja-vu all over again. We use to joke, while at MicroAge, that Wal*Mart would someday sell High-End PC's; we laughed at the possibility and we were wrong. Additionally, "from copier to printer technology..." isn't that the HP model? And guess what, for me, on a daily basis, I see copiers in places where "printer based MFPs" should be - about 90% of the time the copier that was sold to the customer has capabilities well above everyday usage and function requirements. 

For example, in the last two weeks, I have surveyed fleets totaling 107 copiers. All but seven are 55 page per minute units, most with 3-hole punch. The average monthly volume on each machine is no greater the 11,300. This average is by machine over the life of the 60 month lease. The manufacture’s published volume per month is up to 200,000 images. Oh, and the punch unit is never used. As a matter of fact, in a department that did need 3-hole punch, the copier DID NOT have a punch and they ran pre-drilled paper through the machine. 

Let all this sink in. 

In the past 6 months(2008), in every single one of my of surveys, 99% of the machine specifications are well over the real world usage – as a matter of fact, I have found, when looking at all the surveys as one, the average volume per machine is 10,234 images each month. Isn’t that the number HP came up with when the did a study of all the printers in their world? (It was around 10k/unit, you can look it up) 

And chew on this – If the above machines are capable of 200,000 images per month, it has been priced accordingly – you’re...paying...for... too... much.... capacity. 





 It’s kind of like that scene in Indiana Jones, when Indy and his friend realize the Germans “are digging in the wrong place” isn’t it? This is just one facet of the Copier Model- interesting, no?



- perhaps, we are witnessing the beginning of The Death of The Copier Dealer...?
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4 comments:

  1. Greg, sales people have been overselling capacity for as long as people have been alive. Why? I think it is simply because people want to feel secure in their decisions and want to believe they are better, or will be better, than what their day-to-day behavior indicates.

    People are buying this because, the industry teaches - why not sell them something as long as it is equal to or less than they are paying, unless you can talk them into spending more...

    And what do sales reps do? they try and pull out every cost they can find to justify the expenditure - and what's worse is customers buy it.

    I think what frustrates me most is that many people in this world don't think they need to learn anything. they say they are open minded, but as a therapist once told me, "I don't think you are being open-minded enough to see that you are not open-minded."

    Sometimes I just want to shake people by the shoulders and tell them to wake up. Well, there's my rant for the day...

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  2. Ken,

    You are absolutely correct.

    As a matter of fact, when reading your response, I was suddenly reminded that I had played within that model in the same way.

    For example, at lease end - the customer's current monthly payment was usually enough to fund a newer, higher capacity unit. So of course, the angle is "for the same price or less, I can get you a faster, bigger, better unit with flames painted on the side..."

    Lease conversions of this kind were, at first, the easiest type of sale.

    Also, I am kicking around this idea in my head, I don't remember having too much to offer my customers in the 9-11k/month space, even if I was motivated to do so.

    Good post, my friend - thank you and keep it up.

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  3. I have been a sales professional with a independent Maryland Copier Dealer for 14 years and will agree that most copier sales people will over sell the customers needs and yes even under sell there real needs.



    I think as any sales professional you need to know your products and educate customers, but the most important thing is to don't ask, don't tell, till you know there wants and needs. Now a day's most copier dealers sell printers too, so I think the Copier Dealer is not dying just going through a big change in the industry providing a wider range of services instead of just selling hardware.

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  4. Chuck,

    Great point(s).

    Yeah, I have done it.

    And now, I see it all over.

    It is just another dynamic inside the model.

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