There is a somewhat surprising disconnect in the printer segment of the ICT dealer channel. Industry figures show that, for a large part, the dealers who sell printer hardware are not the same dealers responsible for supporting that hardware through the supply of consumables. Indeed many consumable specialists have carved out a successful living from a strategy based on keen pricing and efficient delivery systems. But as technology continues to advance, the gap between these specialists and the capabilities of the broader ICT dealer channel reduces, albeit gradually. So what should dealers consider about print consumables?
The short answer is they provide ongoing revenue and long term customer relationships.
The managed print equation
The most obvious trend of the past few years is around managed print services (MPS). This, almost more than any other development, enables a broader spectrum of dealers to maintain a longer term relationship with their customers in the supply of print consumables. At the outset, MPS enable dealers to take a consultative approach to their customers total print ownership costs. But, as importantly, when implemented correctly they provide the dealer with an ongoing revenue stream and good margin (by IT standards) over a fixed period of time – typically three to five years. And the best part is there is usually no additional investment required from the dealer in new systems or stock holding.
MPS might sound frightening and beyond the focus of most dealers,but once the first few contracts are signed, dealers find out how easy and financially rewarding the process can actually be with the right company in support.
In fact IDC figures indicate that the size of the managed print market will increase by over 30% in the next three years. Given that overall print-based hardware sales are not projected to increase at the same rate, this directly implies that MPS will replace the existing traditional consumable supply process.
What’s more, MPS will continue to migrate from a government or corporate solution (on copier class product) to meet the needs and budget requirements of the wider SMB market.
Another consideration dealers need to make is the supply and promotion of remanufactured consumables. It is no great secret that the margin opportunities in remanufactured ink and toner are higher when compared with ‘original’ vendor-branded ones. But this is a very short-sighted view. Despite the perceived environmental benefits, all too often the use of remanufactured consumables actually ends up costing the customer more.
In the first instance, these consumables are often of poor quality and gradually (sometimes dramatically) destroy the device they are used in. In the process this usually voids the warranty of the device and the customer is landed with unexpected maintenance bills.
Beyond that, tests have shown that remanufactured cartridges can use more toner to create the same result as an original consumable. As such the cost to the customer increases as the yield does not meet its expected life. Some manufacturers will also claim that the majority of intelligence in their print technology is in fact in their consumables. As such the use of non-original consumables voids the technical advantages of the device.
There is a place for green marketing in the consumable trade. Offering customers the ability to recycle their cartridges, preferably at someone else’s expense, will lead to a better understanding of their consumable usage. With this information, with or without MPS deployed, dealers can gain a deeper understanding of the customers’ actual print usage and, in turn, employ a strategy to gain more consumable business.
Dealers should consider all of the above and not let consumables revenue pass them by.