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APRIL 2013



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Leasing -
by Mary Redmond

What if prospects knew the lowest equipment sales price before the sales person walked in the door? Would the sales presentation change? Would sales professionals still invest time to find out what equipment is right for customers?

Sales people are taught to use their experience and product knowledge to diagnose needs and recommend the right equipment for each customer.

The newly formed National Print Owners Association (NPOA) is collecting equipment purchase information from members for $2,000+ acquisitions. Their objectives are:

  • Provide pricing data for budgeting purposes.
  • Give prospective buyers information about other printers who have recently purchased similar equipment.
  • Provide members with pricing information that may provide a negotiation advantage.

No matter how excited prospects are to know the bottom line price; the full story is never contained in a few pieces of information such as: 1. Selling price. 2. Lease Payment, 3. Lease length and 4. Equipment description.

Every equipment sale is different. Seldom does it boil down to the three or four details. There are at least eleven more financial pieces of information needed.

  • If a trade-in is part of the selling price, the lowest price is complicated by the trade-in real market value which is not always the value in the sales proposal.
  • If paying off an old lease is necessary to make the sale, accept that the leasing company will not discount the buyout for new suppliers. The lease buyout includes the highest possible payoff penalties, unless the new equipment lease will be awarded to the incumbent leasing company.
  • The lease price is composed of many variables that are not collected by NPOA. A full lease analysis is complex. It's impossible to know if a lease deal is a bargain unless the following eight details are known and understood:

a. Number of payments due before the lease commences.
b. Is a Security deposit required?
c. How much interim rent is added to the lease cost?
d. What are the late payment penalties?
e. Is an owner personal guarantee required?
f. What is the definition of fair market value?
g. If the equipment may be returned, is there a restocking fee?
h. Will the lease renew automatically?

Be prepared to handle the news when your customer tells you they know your bottom line. Realize they know some of the details. Help them with "the rest of the story" as Paul Harvey, famous ABC Radio broadcaster used to say.

{short description of image}Mary A. Redmond provides highly specialized information for corporations, managers and dealers who negotiate and manage leases. With 28 years in the leasing industry, including 21 working for the largest leasing companies in the U.S., Mary knows leasing. You may reach Mary at 913-422-7775 or mary@reviewyourlease.com

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