Art Post
Last week I blogged the “Death of the Direct Copier Channel”, in less than one week there were over 1,400 views. I’m guessing we hit a hot spot with many of those in the Direct and Dealer Channel.
The Print4Pay Hotel forums also posted many comments like “Wow – it’s like Ricoh coughed up a hairball!”, and “Since IKON / RBS has not been able to upgrade the Canon / Ricoh IKON MIF that was the intent of the acquisition, they are now selling off the base to mega Dealers. But RJ Young will upgrade these 6,000 units to Canon machines and Muratec devices. Ricoh is having extensive back-order issues at present time”, along with “I doubt that they will upgrade to all Canon devices that would not have been in the best interest for Ricoh. That acquisition is now approaching four years old (Ricoh of IKON). I agree with the back order issues however so other manufacturers are as well. It’s not only Ricoh!”, “In the grander scheme of things 6,000 machines in field is nothing to Ricoh. Those branches must have really been sucking wind to only have 6,000 machines.”
But a few interesting threads were posted the other day that seemed to stir the pot for manufacturers that may be shedding branches and ceding more business to dealers. One Print4Pay Hotel member stated that they had heard that OCE Canada had released all of the sales reps except for one and more interesting is that the one rep had to report to someone in Florida. It was listed as ‘The Great White North shakeup.” Additionally, another member has now stated that Canon Direct closed a small office in Nova Scotia and handed over operations to a local dealer.
With most manufacturers declaring that they are reducing profit estimates or even posting losses for fiscal year 2011, the writing may be on the wall for the direct channel. I’m not saying that the direct channel will cease to exist. However what’s a manufacturer to do when they are posting losses… with any good business model they would try to eliminate or reduce that part of the business which has become a liability. With no good news for the economy in the short term, the threat of Europe recession and the strength of the yen, the copier manufacturers will have to make some tough decisions in the near future.
Selling off those direct branches that are not turning a profit could be a great model and return the manufacturers to profitability in 2012 along with increasing dealer loyalty. With RJ Young not only did they get MIF (machines in field), they also got employees (Now these employees probably won’t have to get worried about getting fired at the end of the Japanese fiscal year).
Just maybe, when we look at a time line of the copier industry in 20-25 years, we’ll see a blip that designated the wholesale changes to the direct channel model and then the decrease back to the dealer channel model of business.
What come around goes around and I’m thinking just maybe we’re heading back to the model of the early and mid eighties.
Special Addition: After writing this blog, I read the interview that Scott Cullen (The Week in Imaging) had with Chip Crunk (CEO of RJ Young) titled “Chip Crunk Talks about RJ Young’s Acquisition of Ricoh Direct Branches” . Well, I’m thinking great minds think alike and I found this the most interesting statement, “I think the industry’s in a transition where in the future the distribution model is going to be large independents and the direct operations. I think Ricoh and the others are going to want to align themselves with the top independent dealers in the secondary markets because they cannot be successful in those markets”.
Good Selling.
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