In our September issue, we take an overview of the perceived or real threats posed by online retailers such as Amazon and Staples, the latter fortified by its acquisition of DEX Imaging. The question is, can these giants make meaningful inroads into the office technology space beyond their current standing? Or, to quote Alfred E. Neuman, the Mad magazine mascot, “What,
Larger dealerships, particularly those with sophisticated managed service offerings, might offer a simple shrug of the shoulder. They’re already knee-deep in competitors and have already mapped out strategies to fend off any barbarians at the gate. But the struggle could well be real for working-class dealers, lifestyle businesses and the more meager among your brethren, who already face difficult competition scenarios in an ever-constricting environment.
Thus, we posed the following question to our state of the industry dealer panel. As retailers scale their service proposition, which segment of the dealer community is most vulnerable to losing client share?
Most Vulnerable
Those dealers doing business in the small office/home office space will prove to be the most vulnerable, notes Kevin DeYoung, the president and CEO of Qualpath. Also at risk are those who serve the extreme small end of the SMB space.
“There are certain customer profiles which lend themselves to appreciating the value-add that an indirect channel would have to offer versus another customer profile where that value-add isn’t appreciated,” he said. “Therefore, the scale that would come from a large retailer in combination with a DEX Imaging is more appreciated because it saves them more money.”
Dave Clark, vice president of sales for AIS of Las Vegas, sees the greatest threats facing dealers who provide copiers and printers only, even if they have wide-format machines and 3D offerings. “If you’re not in the IT space, the workflow space, the integration space, and you’re not helping a customer manage information from multiple access points and helping them create workflows, then really you’re just an output provider,” he said. “There’s really no value in that. Those are the ones that are really going to suffer through this.
“What’s going to happen, as we’ve seen over the past few years, those dealerships will continue to be going away. They’re going to be bought by a company that does provide those types of services, dealers who want the MIF and customers to go after to sell those services. Otherwise, they’ll be going out of business because they’re not staying ahead of the trends and client expectations of delivering a valued technology partnership.”
The value-add of managed services needs to be real. Too often, dealers who claim to have MPS are overstating their value proposition; it sounds nice on their website, but the level of execution is lacking. Kevin Morris, president and CEO of OneDOC MPS—like Qualpath a pure-play MPS provider—was vetting a potential acquisition that claimed to have a managed print services offering. But out of all of their devices, only 135 printers were under contract.
Not Inclined
Morris wonders how many dealers in the country in the $2 million to $5 million range are in the same boat as his example, where 135 out of about 700 MIF were under contract. “Those companies are extremely vulnerable, because they haven’t made an attempt at MPS offerings, and they are operating the same way that they did in 1975,” he said. “They probably have owners who are a little bit older and they haven’t pursued MPS; they just felt more comfortable selling copiers.”
Dealers who leave service money on the table will soon find a competitor willing to snap it up. Chip Miceli, president of Pulse Technology, notes that dealers who do not make deals with selling organizations are the ones most vulnerable to losing client share.
“Service is where profits are highest,” he said. “In the right position with the right arrangements, dealers can pick up revenue. As an example, we do service only for several organizations. Dealers should be open to this possibility.”
