Copiers vs. Printers 101 Evolving Business Models

As noted in my last two articles, the differences between today’s copiers and printers are becoming negligible as the machines evolve. The markets and business models are also changing. To better meet end-user demands, most printer manufacturers now offer products that do much more than simply print. Multifunction printers (MFP) have grown immensely popular over the past five years and an increasing number of these machines offer additional technology to mange electronic documents and workflow. While MFPs have given companies like Hewlett-Packard, Lexmark, and others a foothold in the copier space, copier vendors such as Ricoh and Xerox have deployed print-only products that allow them to compete in printer markets. Copier vendors are also offering new options for supplying and caring for these new machines, while printer OEMs and third-party supplies vendors pioneer new ways to give their customers choices in how they acquire consumables.

While the digital hardware has evolved to take on virtually identical tasks, the groups purchasing copiers and printers have been separate and distinct. And these groups have also purchased their hardware through completely different channels. While some copiers are sold direct by OEMs, many of these machines are sold through the copier dealer channel. Copiers traditionally have been bought by the same people who purchase all the other products and supplies for the office, and that legacy continues. Going back to the days of light-lens copiers—and even typewriters—the dealer channels have catered mostly to those who made the office equipment purchases. The hardware is often sold under financing or leasing arrangements with maintenance and supplies baked into the deal. The cost of these agreements is usually based on print volumes and determined by the number of pages printed by the customer. So-called “click charges” allow customers to accurately monitor how much they print and they offer the convenience of a regular bill, which makes budgeting easier.

Printers (generally electrophotographic machines rather than ink jet) have been sold very differently. With a few exceptions, laser printers are significantly less expensive than copiers, so different levels of approval and capital expenditure processes are required for purchasing printers. The key differentiator, however, has been that laser printers are connected to computers, either locally or on an office network of some type. Because they are attached to the IT infrastructure, printers along with their supplies and maintenance are the responsibility of IT departments rather than those who manage the office. IT departments specify which printers are acquired and establish the purchasing guidelines. Printers, as a result, are often sold through the same channels used for computers and other IT-related gear. Generally, this channel is made up of systems integrators, large IT sales organizations, and Value Added Resellers (VARs) in the IT space. In many cases, printers are considered “add on” sales to larger orders of computer and networking gear.

Differing Supplies Models

The way in which copiers and printers are sold and the channels that sell them are not the only factors that differentiates the machines. The supplies can also be very different, particularly in larger MFPs and copiers. As I noted in my last article, printer cartridges are generally more complex and key components such as the OPC drum along with other imaging components are integrated into one cartridge along with the toner. Copier toner cartridges, on the other hand, tend to come in simpler containers or bottles. The imaging components such as the drum, transfer belts, and other parts are usually in separate units that are replaced far less frequently than the toner SKU.

Putting aside their design, the most important difference between the supplies used in copiers and the supplies employed by printers is how they are sold. Supplies for copiers are rarely sold a la carte. They are almost always sold as part of a supplies and maintenance contract as part of a click charge, whereas supplies for printers are almost always sold a la carte. Moreover, the channels for the sales of these supplies are radically different.

Copier supplies are almost always provided by the same organization that sold and services the copier. The service is “inbound” from one particular dealer to the customer and the ongoing relationship is an important component of this business model. In the printer world, supplies may be sold by the same folks that sold the printer but not necessarily. Customers can buy printer cartridge as needed through a wide assortment of channels ranging from retailers such as office supply superstores like Staples and Office Depot, to what remains of the contract stationer channel with companies like Corporate Express, to large IT sales organizations such as CDW. There are also third-party supplies vendors such as regional cartridge remanufacturers that supply customers directly with consumables.

There are benefits and disadvantages to both models, of course. Most copier customers are not required to actually purchase supplies and they receive a regular bill, as noted, which allows them to more accurately budget for their in-house printing cost. The downside to the lease arrangement is that consumers are locked into the negotiated terms and they can’t shop around for any consumables bargains. The dealer is incented to sell leases with the highest possible click charge so the leasees are inclined to under-estimate the amount they print to keep the cost of the original lease down. This can be a costly mistake because overage charges are often onerous. Printer owners, on the other hand, are free to shop around and purchase products that offer the best value proposition. They can purchase non-OEM supplies, for example, which are often available at significant savings. Printer owners, however, are susceptible to fluctuating market conditions and unforeseen consumable price increases. In addition, the number of cartridges required can vary if a company’s print volumes fluctuate, which can cause budgetary and cash flow headaches for the team that owns the printers.

Consumables Models Converge

It was inevitable that the converging functionality supported by MFPs would make consumers think differently about the machines they use to put marks on paper. Increasingly, consumers view all their printers and copiers under one inclusive heading—“printing devices.” People don’t want to differentiate between what’s a “printer” and what’s a “copier” and they don’t want to worry about who supplies what machine with what cartridge. Consumers are also looking for simple solutions to manage their printing devices and account for these machines, which can number in the hundreds or even thousands for some firms across various locations. New technology is emerging that will provided these tools, and it is further blurring the lines between copiers and printers

Managed Print Service (MPS) programs now allow consumers to more efficiently manage their printer and copier fleets even if the fleet is complex and includes far-flung machines in remote locations from various OEMS. MPS packages from companies like PrintFleet and FM Audit and many others allow customers to consolidate copiers and printers under a single document processing umbrella. The technology is either connected to a networked computer or directly on a network itself. These solutions allow consumers to monitor what is being printed where and how supplies are being consumed. Facilities managers and IT teams alike can easily access data and information about the devices on their networks and evaluate how the machines are being utilized.

Companies that market MPS solutions usually position the technology as a tool for selling cartridges. Many supplies vendors are able to offer “click-charge” programs for printers as well as copiers thanks to MPS technology. As a result, printer customers are being exposed to bundled options that allow them to purchase maintenance and supplies along with hardware. Because these bundles tend not to focus much on the specific supplies being provided, MPS technology is being used by a growing number of third-party supplies vendors to lure more large companies away from OEMs. They can provide the convenience of management tools along with cartridge fulfillment and regular billing cycles, thanks to MPS. Likewise, resellers are also capitalizing on the latest market convergence by leasing printers using MPS tools and supplying the printers with compatible cartridges, which offer higher margins and enhanced profit opportunities. OEMs, of course, offer their own versions of MPS programs. Xerox, for example, has its PagePak initiative, which allows end-users to lease Phaser printers and WorkCentre MFPs with terms based on usage volumes. PagePak participants can view daily logs that record data at the device level and they are sent a monthly bill that includes the cost of the hardware and the supplies.

MPS technology began to emerge about five years ago and it has become the hot technology for the digital supplies industry. MPS programs are currently offered by many hardware vendors as well as through third-party supplies vendors. I would expect to see the number of MPS programs grow and expand into the VAR channels as well as, perhaps, the wholesale channels. The programs are sure to further blur the lines between copiers and printers, which will soon be all but impossible to differentiate between.

With over 12 years of experience, Charles Brewer is an independent consultant for the digital imaging industry. He is a contributing editor to Lyra Research's Hard Copy Supplies Journal published, which he managed from 2005 until 2009. Brewer has authored numerous articles, reports, and white papers on hardware as well as toners, inks, and media and has worked with various OEMS and third-party supplies vendors.