Government Guarantees

In today’s economic climate, businesses looking to reduce their overall cost of overhead are open to listening to the advantages of using lower cost products in their office equipment machines. Many end-users are considering the use of aftermarket products to lower the cost of imaging supplies. An increasing number of authorized dealers and OEM direct locations are actively switching to the use of non-OEM products.

Management Print Service Programs have greatly increased the use of aftermarket compatible products. Equipment servicing dealers have become one of the largest sectors of purchasers of non-OEM goods. The businesses who previously sold the OEM products to the end-user sometimes resort to threats of warranty violation or equipment damage if anything other than OEM products is used. As the servicing dealer who is trying to sell or use compatible products, be prepared to professionally neutralize any concerns expressed by the end-user.

It is to the selling dealer’s advantage to make the end-user’s shift to buying a different category of supplies as easy as possible. Change of any kind is difficult for purchasing agents. Many end-users and larger enterprise and governmental purchasing agents are open to investing in the possibility of saving 10% - 50% on compatible products. One of the first places to look for someone who is open to change is to find a customer who is currently unhappy with their present situation.

What is the easiest way to find disillusioned customers? You may only have to look at the newest acquisitions that have been made by several of the OEMs and other mega-dealers that are buying up the competition. As these larger entities continue to acquire formerly privately owned independent dealers, there is a shift in stability. With each change, there is a potential for realignment of the customer’s loyalty.

Forward thinking independent dealers can take advantage of any change in ownership. Customers and the employees of the newly purchased companies are a bit more vulnerable than usual. Change always creates an atmosphere of insecurity and opportunity.

There are several common tactics an incumbent dealer may use to try to keep a wavering (current or former) customer from being enticed by another company. Commonly used thinly veiled threats include:

• “You must buy all your products from us or we will not service your equipment.”

• “You cannot buy compatible products because it will void your warranty.”

• “We are the only authorized dealer in the area.”

• “You can only buy parts from an authorized dealer.”

• “If you do not have a service contract, we will not service you.”

• “Other products are counterfeit and against the law for you to use.”

• “Your servicing agreement, which is paid through the lease payment, is non-transferable.”

When dealing with purchasing agents, trying to convince them that these threats are just that, idle threats, is often difficult. Once a current vendor threatens to disrupt the flow of the customer’s business, trepidation sets in. Historically, purchasing agents will side with a current vendor, even at an inflated cost, rather than take a risk at a lower cost with an unknown vendor.
Factual, authoritative documentation will help educate purchasing agents to the point they may be willing to make a change. This also gives the purchasing agent documentation to file away, or to use to explain to a supervisor why a change in vendor was made.

Treat all decision makers in a professional and respectful manner. Provide them with factual material that will help back up their choice to start (continue) buying from your company. Your ability to provide factual information that will provide them with legal recourse when they are threatened by other vendors will win you creditability and their business.

Free trade and fair competition are part of the American business cycle. Learn to let the United States government be your partner in growing your market share.

The following is documentation of United States Federal Laws and regulations of the United States that will enable you to professionally stand your ground when dealing with other companies that threaten your (future) clients with incorrect information.

Federal Trade Commission - Bureau of Competition
Clayton Anti-Trust Act of 1914

The Clayton Act was established in 1914 in order to prohibit actions that may substantially lessen competition or tend to create a monopoly in any line of commerce. It prohibits such activities as: price discrimination, selling of the same commodity to different buyers at different prices, exclusive dealing, holding a retailer or wholesaler to a single supplier on the understanding that no other distributor will receive supplies in a given area; interlocking directorates, holding by an individual of directorships of two or more competing companies; and companies holding competitors stocks. It also prohibits mergers and acquisitions where the effect is to lessen competition or to tend toward monopoly. It gives the U.S. Justice Department and the Federal Trade Commission authority to block any merger that would violate antitrust laws.

The Clayton Antitrust Act (1914)
The Clayton Antitrust Act is comprised of SS12, 13, 14-19, 20, 21, 22-27 of Title 15.

Sec. 14. Sale, etc., on agreement not to use goods of competitor (S3 of the Clayton Act)
It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unattended, for use, consumption, or resale within the United States or territory thereof or District of Columbia or any insular possession or other place under the jurisdiction of the United States, of fix a price charged therefore, or discount from, or rebate upon, such price, on the condition, agreement, or understanding, that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lesser or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce.

Bureau of Competition

The FTC’s antitrust arm, the Bureau of Competition, seeks to prevent business practices that restrain competition. As a result, purchasers benefit from lower prices and greater availability of products and services.

The Bureau carries out this mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. If the Commission does decide to take action, the Bureau will help to implement that decision through litigation in federal court or before administrative law judges.

The Bureau also serves as a research and policy resource on competition issues. It prepares reports and testimonies for Congress, and may present comments on specific competition issues pending before other agencies.

The Bureau of Competition has developed expertise in a number of industries important to consumer such as health care, other professional services, food, and energy.

The antitrust laws are enforced by both the FCC’s Bureau of Competition and the Antitrust Division of the Department of Justice. In order to prevent duplication of effort the two agencies consult before opening any case. The Commission’s antitrust authority comes primarily from the Federal Trade Commission Act and the Clayton Act both passed by Congress in 1914.

Make sure your entire selling and servicing staff is familiar with these documents. Be prepared to email or fax these governmental documents along with your sales presentation when the competition pressures your customer. Knowledge is a valuable partner in your quest to increase your market share. Do not allow your clients to be intimidated by unfair business practices from other companies that are illegally using threats to limit your company’s access to gain new clients.

Ronelle Ingram, author of Service With A Smile, also teaches service seminars. She can be reached at ronellei@msn.com  or visit her website www.ronelleingram.com