December 2010 Issue PDF - ENX Magazine

STATE OF BUSINESS We Saw It In ENX Magazine DECEMBER 2010OES Solutions is a Premier Director ofthe Certified Channel Reseller programSpeak with someone you know Each of our clients has a dedicated representativeAward Winning Sharp Copiers and Fax! Talk to a live person, no voicemail Flat rate drop shipments directly from Sharp Next day shipments availableSHARP Open Line Wholesale Distribution Factory-Authorized Service TrainingWe are currently accepting Sharp CCR dealership applications in the Midwest region.Discover how OES Solutions and Sharp can help you diversify your business.Quota Credit for SHARP DealersCall or email today for all yourmachine, accessory and supply needsToll Free: 877-637-1240Email: wholesale@oes-solutions.comHasSharp Open Line Wholesale Distribution2World Class Divisions to help you meetall your office machine needs!For more information on OES Solutionsand the CCR program, contact OES at:Website: www.oesccr.comEmail: ccrdealersupport@oes-solutions.comToll Free: 877-637-1240continued from 32MPS MYTH VS. FACTMyth: Providing printer service in exchange for supplies isonly the first step. Next, you want to right size the fleet in orderto reduce the amount of (hopefully competitive) hardwareinstalled. In theory, less hardware means lower cost. In thethird phase, you’ll have to be prepared to adjust existing workflowsto increase efficiencies.I can avoid complexity by finding prospects interested in justthe first phase. After all, that’s where instant savings reside.Fact: Yes, you can sell only the initial savings associated withthe implementation of an MPS program. But, if you’ve sold thecontract on the basis of price, with no value add, you’ll probablylose it on that same basis at the end of the contract.Someone will always be there to sell for less.One of the best parts of an MPS engagement is predictablecost for both the customer and my dealership.Myth: Yes, your customer’s cost is predictable. But yours isnot. When you calculated the original contract, did you factorin the cost of refreshing the fleet? What about the additionalcost of supplies and service when the customer begins to producepages with a higher coverage than originally assumed?Your costs will tend to escalate throughout the course of thecontract. Be certain you have considered these at the outset.If the customer chooses not to renew the contract, I can simplywalk away.HUGE Myth: We hardly see this discussed. Yet the issue sitsthere like a ticking time bomb. When you initially took over thefleet, all of the equipment belonged to the customer. Gradually,over the life of the contract, you have probably refreshed all orpart of the fleet. So, here’s the big question. Who owns the newequipment? Has this been called out at the time the contract issigned? If another vendor takes over the contract, does yourequipment pass to them and if so, at what cost?Gross margins for MPS contracts tend to be higher than theblended margin for hardware, service and supplies.True (for now): Yes, our research indicates that current MPSmargins are considerably higher. But, as more vendors enter thefield you can expect those margins to narrow. Your best betmight lie in adding value such as workflow analysis to tie youto the account for a longer, more profitable period. uLou Slawetsky is CEO of Industry Analysts, Inc., a marketingand management consulting firm for the office automationindustry. Much of the company’s research and testing resultscan be viewed on their website www.industryanalysts.com.34enx magazine