How Channels and Distributors Can Make Your Printer Consumables Business Profitable

Channels and distribution are all about taking your product to the actual end user. If your customers are happy they will return to make additional purchases. Loyalty is the key to being profitable and having a sustainable business. The various marketing techniques and sales strategies you use to reach your customer base or market territory is called channel management. The distribution channel is the chain of intermediaries through which your product will pass in order to reach the actual end user.

My word, the Internet has dramatically changed the way people buy products. It has allowed them to be better informed and make it easier to acquire any brand or product anywhere at any time. Our products address the needs of both the B2C (business to consumer) and the B2B (business to business) sectors. “One size” does not necessarily “fit all” yet you can operate profitably and successfully in both sectors if you have developed the required relationship with the consumer.

As a manufacturer, you already use a variety of channel strategies, which include the delivery and service channels, as well as a sale channel. For example, your company could use FedEx as the delivery channel, the Internet and the telephone as sales channels, and hire local technicians for service or repairs. Everything is driven by consumer perception, expectations and demand, so we must find ways to avoid partner conflict and to maximize customer satisfaction.

Channel and distributor conflict can be minimized to a large extent by building a brand which each brand owner and partner will manage. This will minimize price conflict, especially in price-sensitive markets like India where products are sold with low margins and price points—as low as 10 percent of the OEM price.

Success will come to those who consistently sell high-quality products and build a brand amongst their target customers. As a brand owner, you must manage conflict that exists in a multi-channel scenario where there are two or more channels used to distribute the manufacturer’s product. In this case, an authorized distributor could be appointed in a country to serve as a sole distributor to invest significant resources in building the brand in that market or country in order to obtain larger profits and sustained business.

It will develop a large retail chain that can sell vast quantities to meet consumer demands. If the manufacturer also supplies the consumer as well, the authorized distributor will stop stocking the brand. The manufacturer’s short-term greed will break the distributor agreements and it will be the death knell for all stakeholders. Integrity, honesty, open communication and trust remain key factors for a sustained profitable business for the entire supply chain.

Now that consumers can easily purchase what they want on Amazon with a few clicks and have it delivered to their door overnight, it is essential you earn loyalty by providing a no risk, quality alternative to the OEM at a reasonable price. The perception of having received a large discount can be lost in a matter of hours if the customer feels he is being shortchanged.

In this era of IOT, you must have a wonderful website which is e-commerce enabled and allows you to provide better-than-Amazon experience to your existing customers whose needs you already know. It is easier to manage your existing customers than having to win new customers with every new deal. Progress, Profitability and Predictability in our world come only with the one certainty in life and business ….CHANGE ….. Embrace it and be happy always!

Managed Print Services is Not the Door to Managed IT Services

Over the last few years, print and copier service providers have begun entering the Managed IT Services space. Those which have had success are realizing their history as print/copier providers does not, for the most part, offer them any real value toward their success in Managed IT Services.

Let me explain: Let’s say, one day, a particular taxi service company realized that over 90% of their passengers took rides to restaurants. Would it make sense for the taxi company to open a restaurant? The two business models are completely different. I don’t believe the taxi company’s fleet manager would necessarily make a good Maître d’.

Managed Print is not a conduit to Managed Services. It never was, and it never will be—as a profitable strategy. Have I upset you? I am not saying certain well-run companies can’t make the transition to Managed Services. I think some can, and I know that some have. The majority, however, will not understand my taxi analogy and will make a total mess out of their transition.

Think about the word “transition.” Nowhere in its definition does it have the same meaning as the word addition, which is what most print service providers do. They see Managed IT Services as an “addition” to their model. They like to say they have “transitioned” into an IT company, but I would say they simply sold someone some computers, printers or a server. All successful Managed Services providers know—that is not Managed Services.

Here are some facts: Managed Services providers know that recurring print revenue represents less than 2% of the total recurring Managed Services revenue. For example, if an organization with 25 users is engaged in a complete Managed Services agreement from end to end, the recurring services contract would be, at minimum, $4,000 a month or $160.00 per seat. This same customer would have a copier and maybe a couple printers. They would generate five thousand pages a month at .015c per page. This would equate to just $75.00 a month, which represents 1.8% of the Managed Services contract. I am convinced this explains why the larger, more successful Managed Service providers never attempted to transition the other way: into Managed Print.

OK, I can hear the loud cries from some of the print providers reading this, saying that $4,000 a month is crazy and their customers would never pay that. I guess the answer to that objection is—you’re right, your customers will never pay you that. I say this based on your thinking, and the type of customer you seek. Anyone with a heartbeat is a copier prospect. In Managed Services, the provider must be selective or they will doom themselves to failure. When your print/copier company mentality changes or Transforms, you will understand the value and the real cost in providing end-to-end Managed Services. After all, the real reason of transforming from Managed Print to Managed Services is to prevent your business from a premature demise, as print and copy volumes continue to decline. Right?

A few suggestions for the transformation to Managed Services:

1.    Stop believing Managed Print Service is a door of opportunity, opening into the world of Managed IT Services. Managed Print is merely the “peep hole” in the door; you can look through it, but that does not mean you can open it;

2.    Stop believing that your large base of print customers makes you a candidate for delivering Managed Services successfully to those Managed Print customers;

3.    Stop listening to consultants who tell you the opposite of my first two suggestions.
Remember that Managed Print is simply the lowest hanging fruit on the Technology tree, and in saying that, it’s also the least valuable. Your success in Managed Service will only come from a “transition.” If you believe it is merely an additional service offering, the rewards will not come.

“You can’t walk a new path forward if you allow the old path to continually get under your feet.” RJS