The printer jam

Sell the hardware at cost and make money from flogging consumables. That's been the mantra of numerous resellers in the printing business up to now, but is this format really sustainable two or three years down the line? In an article designed to give commercial printer resellers an insight into how they will need to reposition their operations in the coming years, Channel Middle East asks the leading printer suppliers to spell out the future.

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By  Julian Pletts Published  September 17, 2008

Sell the hardware at cost and make money from flogging consumables. That's been the mantra of numerous resellers in the printing business up to now, but is this format really sustainable two or three years down the line? In an article designed to give commercial printer resellers an insight into how they will need to reposition their operations in the coming years, Channel Middle East asks the leading printer suppliers to spell out the future.

How will printer resellers need to adapt their selling methods to maximise the profits they make in the future?

Natesh Mani: They should look at selling volume, but they must also look at selling value such as office solutions.

At the moment there is too much focus on short term profits. Commission might be linked to a particular month and salesmen don’t give enough time to prepare for other opportunities.

The most important element of the business model is to look at both the after-sales service and post-sales. Many printer players think the money is only in the printers, but there is money to be made on post-sales. If they can offer the full value chain they will end up making more profit.

Mohammed Addarrat: How resellers are measuring profit is a bit peculiar sometimes and can be unclear. Some are after the cashflow and generating profit from the volume.

Some are just looking at net margins and increased value of revenue. Elements that have to be taken seriously do not just include selling the printers, but value added services from proposing software solutions - whether installations, demonstrations or integrations.

Product positioning - making sure you place the right product, with the right customer, for the right usage - is important. That combination will translate into revenue.

The third thing is simple customer relationship management.

Vishal Gohel: It is opposite to the mantra ‘sell the hardware at cost and make money from consumables'. What I have found is that a lot of the resellers are selling hardware at high profit margins.

This is the business sector, but speaking to some of the other product managers and area sales managers it almost seems as if it has gone from one extreme to the other.

We obviously don't want to go back to selling at very low margin and making the money on consumables, but you need to find the balance and people need to appreciate that there is profit in everything.

Madhav Narayan: The future resellers have to be selling hardware and consumables. Consumers want to go back to the same guys to get their consumables. Also, customers are looking to resellers to give them the right solutions when it comes to selling printers. So sales people need to be equipped or trained to talk about the right product for the customer.

What skills and competencies will Middle East resellers need to exhibit in the future if they wish to stay ahead of their competitors? And what kind of investment will this require on their part?

John Ross: Simply put, resellers that understand they're running a sustainable business for the future, rather than a trading enterprise for today, have already developed the basic skills to satisfy their customers, not to just feed a demand created by manufacturers.

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