{"id":2494,"date":"2012-07-06T12:02:10","date_gmt":"2012-07-06T12:02:10","guid":{"rendered":"http:\/\/www.theweekinimaging.com\/?p=2494"},"modified":"2012-07-06T12:02:10","modified_gmt":"2012-07-06T12:02:10","slug":"the-three-greatest-dangers-to-independent-dealers","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/feature-articles\/2012\/07\/the-three-greatest-dangers-to-independent-dealers\/","title":{"rendered":"The Three Greatest Dangers to Independent Dealers"},"content":{"rendered":"
\"\"<\/a>

Andrew Ritschel<\/p><\/div>\n

I can always count on Andrew Ritschel, president of Electronic Office Systems (EOS) in Fairfield, New Jersey, to tell it like it is, and not only that, encourage me to print it. That\u2019s always an offer I can\u2019t refuse so when he e-mailed recently wanting to talk about the three biggest threats facing independent dealers I embraced the opportunity to hear what he had to say. So let\u2019s get right down to it for an overview of those three dangers. Next week we\u2019ll delve more deeply into Threat #2 and the following week dig deeper into Threat #3.<\/p>\n

Threat #1: Manufacturer\u2019s Irresponsible Down-the-Street Pricing.<\/strong> This is one that Andrew and many other dealers have railed about in the past and some of us have been under the impression that this problem has been addressed by most manufacturers, but maybe not all of them across the board. \u201cThis has caused them to lose millions and hurt their own profitable distribution channel\u2014independent dealers,\u201d laments Ritschel.<\/p>\n

Threat #2: Customers Declining to Take Maintenance Agreements on Their Equipment.<\/strong> Ritschel sees this as the greatest emerging threats to the industry. The primary reason why customers are foregoing maintenance agreements is that the equipment is more reliable than it\u2019s ever been.<\/p>\n

\u201cPeople are looking to save money so when those maintenance agreement renewals come up, if they\u2019re not tucked away in pass-through leases as part of a lease payment, they\u2019re apt to say \u2018We\u2019ll do without,\u2019\u201d says Ritschel. \u201cA maintenance agreement is basically our cash flow and our profitability. [Not having one] unties the customer from us for supplies and allows them to go onto the Internet and start buying supplies at whatever ungodly price suppliers are selling the supplies for, possibly buying generic brand supplies and using them with the equipment that we<\/em> place that eventually we<\/em> might have to service.\u201d<\/p>\n

 <\/p>\n

If customers just bought the equipment at the discounted purchase price or leased it at the discounted purchase price Ritschel says he\u2019d be out of business very quickly. \u201cWe, like everybody else, are putting the equipment out there to capture the service and supply business. The amount of profit we would need to make if we weren\u2019t selling maintenance agreements and supplies would have to be much greater than what we\u2019re making right now.\u201d<\/p>\n

Threat #3: Insanity in Pricing MPS. <\/strong>Dealers and Manufacturers have what Ritschel calls \u201cMPS fever\u201d and are buying printer MIFs without fully understanding what their costs are to service those MIFs.<\/p>\n

\u201cA lot of people are haphazardly quoting and in essence paying the end user customers for every print they\u2019re outputting,\u201d contends Ritschel. \u201cIn other words, I see them pricing themselves below costs, giving money to end users for their printing. I see that over and over again. We know what the cost is on HP generic products and what it costs to do a service call and what the expected service call time is yet we see people selling MPS clicks considerably below what it costs them. It\u2019s okay as long as you\u2019re not buying MIFs and losing money doing it or breaking even. And when they do break even or lose money, they\u2019re not only hurting themselves, they\u2019re hurting their competition, they\u2019re hurting our industry, and they\u2019re hurting the end user customer.\u201d\u00a0<\/strong><\/p>\n

Ritschel continues to sound the alarm.<\/p>\n

\u201cWhere they talked about cost per copy death 15 -20 years ago, there are suppliers promoting MPS death right now. People will throw out a figure \u20131 cent, 1.3 cents, 1.5 cents without having any clue of the base of printers. In a base of printers we\u2019re seeing 80-85 percent of the marketplace is HP printers. Are these HP 1000 Series printers, 2000 Series, 3000 Series, 4000 Series, 5000 Series, 8000 Series, or 9000 Series? If they\u2019re guessing wrong on how many of each series are out there and if they\u2019re data collection agent is not picking up the customer\u2019s PC-connected printers and they\u2019re basing their quoting rock-bottom pricing they might be making a tiny bit of money by not collecting the meters manually, but in reality they\u2019re losing huge amounts.\u201d<\/strong><\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

I can always count on Andrew Ritschel, president of Electronic Office Systems (EOS) in Fairfield, New Jersey, to tell it like it is, and not only that, encourage me to print it. That\u2019s always an offer I can\u2019t refuse so when he e-mailed recently wanting to talk about the three biggest threats facing independent dealers I embraced the opportunity to hear what he had to say. So let\u2019s get right down to it for an overview of those three dangers. Next week we\u2019ll delve more deeply into Threat #2 and the following week dig deeper into Threat #3. Threat #1: Manufacturer\u2019s Irresponsible Down-the-Street Pricing. This is one that Andrew and many other dealers have railed about in the past and some of us have been under the impression that this problem has been addressed by most manufacturers, but maybe not all of them across the board. \u201cThis has caused them to lose millions and hurt their own profitable distribution channel\u2014independent dealers,\u201d laments Ritschel. Threat #2: Customers Declining to Take Maintenance Agreements on Their Equipment. Ritschel sees this as the greatest emerging threats to the industry. The primary reason why customers are foregoing maintenance agreements is that the equipment is more reliable than it\u2019s ever been. \u201cPeople are looking to save money so when those maintenance agreement renewals come up, if they\u2019re not tucked away in pass-through leases as part of a lease payment, they\u2019re apt to say \u2018We\u2019ll do without,\u2019\u201d says Ritschel. \u201cA maintenance agreement is basically our cash flow and our profitability. [Not having one] unties the customer from us for supplies and allows them to go onto the Internet and start buying supplies at whatever ungodly price suppliers are selling the supplies for, possibly buying generic brand supplies and using them with the equipment that we place that eventually we might have to service.\u201d   If customers just bought the equipment at the discounted purchase price or leased it at the discounted purchase price Ritschel says he\u2019d be out of business very quickly. \u201cWe, like everybody else, are putting the equipment out there to capture the service and supply business. The amount of profit we would need to make if we weren\u2019t selling maintenance agreements and supplies would have to be much greater than what we\u2019re making right now.\u201d Threat #3: Insanity in Pricing MPS. Dealers and Manufacturers have what Ritschel calls \u201cMPS fever\u201d and are buying printer MIFs without fully understanding what their costs are to service those MIFs. \u201cA lot of people are haphazardly quoting and in essence paying the end user customers for every print they\u2019re outputting,\u201d contends Ritschel. \u201cIn other words, I see them pricing themselves below costs, giving money to end users for their printing. I see that over and over again. We know what the cost is on HP generic products and what it costs to do a service call and what the expected service call time is yet we see people selling MPS clicks considerably below what it costs them. It\u2019s okay as long as you\u2019re not buying MIFs and losing money doing it or breaking even. And when they do break even or lose money, they\u2019re not only hurting themselves, they\u2019re hurting their competition, they\u2019re hurting our industry, and they\u2019re hurting the end user customer.\u201d\u00a0 Ritschel continues to sound the alarm. \u201cWhere they talked about cost per copy death 15 -20 years ago, there are suppliers promoting MPS death right now. People will throw out a figure \u20131 cent, 1.3 cents, 1.5 cents without having any clue of the base of printers. In a base of printers we\u2019re seeing 80-85 percent of the marketplace is HP printers. Are these HP 1000 Series printers, 2000 Series, 3000 Series, 4000 Series, 5000 Series, 8000 Series, or 9000 Series? If they\u2019re guessing wrong on how many of each series are out there and if they\u2019re data collection agent is not picking up the customer\u2019s PC-connected printers and they\u2019re basing their quoting rock-bottom pricing they might be making a tiny bit of money by not collecting the meters manually, but in reality they\u2019re losing huge amounts.\u201d    <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[82],"tags":[],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/2494"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=2494"}],"version-history":[{"count":0,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/2494\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=2494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=2494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=2494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}