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DECEMBER 2012




Office Automation Equipment Dealer Warning: Climate Change Ahead

Marco Boer

No, it is not Hurricane Sandy's successor. Rather, the predictable lease climate for the office copier/MFP is coming to an end as OEMs salivate over the ability to move up the value-chain of business process outsourcing services and overall print volumes decline to levels where the need for copier/MFPs greatly diminishes. What is an independent office automation dealer to do? Most dealers have a broad enough customer base to prevent falling victim to a cataclysmic loss of a key customer, but yet we can all feel change is coming.

One response many dealers are considering is expanding their product offerings to include wide format graphics ink jet printers. There are many types of wide format printers whose classification falls foremost by ink chemistry (which determines the range of applications) and secondarily by hardware price band.

Wide format graphic aqueous ink jet graphics printers have been commonly available since 1992.

These aqueous printers are dominated by Epson, HP, and Canon brands and typically sell for under $10,000, often through Internet sales channels including the OEM brands. There is little value dealers can add these days to distribution of those systems.

Low-level solvent and latex printers have been available since 2002 and 2008 respectively and are considered by many to be two-function printers, meaning they can print both indoor and outdoor wide format prints. These machines are more expensive ($10,000-$30,000) and require more handholding during sales, installation, and on-going service process. They require dealers, as the unit volumes sold across the nation is too great and too fragmented for any OEM to handle using direct sales.

The "Holy Grail" for dealers may well be the next tier of products; low-end and mid-range UV-curable flatbed printers, which sell in a range between $70,000 to $200,000. There are still too many sold for OEM manufacturers to be cost efficient selling direct, but not enough for an individual dealer to be able to cost effectively scale service and spare parts in a single region.

What is needed and is lacking are super-regional dealers, or perhaps even a national dealer network, which can scale and leverage the sales/installation/training/service that is required to keep customers utilization levels of these printers at their most productive. The investment to build a dealer infrastructure to represent these devices is not for the faint of heart - however the barriers to entry also make it more competitively sustainable.

The distribution and resale of wide format graphics printers, specifically those at $30,000 and above, offers an additional benefit not as commonly offered by copier/MFP distribution: ancillary product sales. This includes high margin software rips, inks, substrates, automated finishing equipment that cuts/trims, laminates, even installation tools. The value in wide format printing for print shops is often hidden in the non-printing aspects of print. For example, printing on standard vinyl, sewing the edges, and installing twelve grommets turn printed piece from a the $1/square foot outdoor print to a $6 per square foot shower curtain. A dealer who can help guide his print shop customer navigate through the ever expanding range of applications will grow with that print shop, as he is now adding value in ways that are very difficult to do in mature copier/MFP market.

Wide format graphic printer equipment and supplies distribution isn't simple. But it is the complexity that makes it so worthwhile. The climate is changing, and those who prepare will find safe harbor for years to come.

BoerMarco Boer, VP
I. T. Strategies, Inc.
51 Mill St. Suite 2,
Hanover, MA 02339
PH: 781 826 0200
FX: 781 829-0768



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