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The Option of Selling Compatibles Has Its Benefits

29 Oct, 2011

As well as relying on OEM replacement cartridges for your customers, especially your Managed Print Services (MPS) clients, another option is, as most are aware, offering OEM compatible products. As an office products dealer, you realize that the service you provide to your customers is crucial to your livelihood. Competition is stiff and dealers must be able to stand behind the products they offer, but importantly, a selection of price points to offer your print customers is increasingly important today in our current economy.

History tells us that back in the early 1980s, when the compatibles market was really emerging, quality was a significant differentiator between compatibles suppliers. Today, with more than two decades of market maturity, the compatibles industry has seen quality become a fundamental baseline from which to do business. With quality on par with many OEM products and the importance of parts and supplies increasing within the typical dealer's overall business, price and cost savings plays a significant role.

Compatible parts and supplies tend to be priced less than their OEM equivalents, representing a typical savings of about 20%. With compatibles now firmly established as a credible, profitable alternative to OEM supplies, they continue to create new opportunities for office equipment dealers. And, understanding these advantages can often pencil out to better margins, higher profits and sustained customer satisfaction for dealers in the long term.

Independent dealers should realize that there are a number of different reasons on why compatibles are a good choice, such as these to consider:

A. Increase in Profits. Simply put, high-quality compatibles often cost less while delivering OEM-quality performance. By using reliable
compatibles, dealers may realize greater profit and/or extend lower prices to customers for a competitive advantage.

B. Value-Added Services. Suppliers of high-quality compatibles realize that dealers make buying decisions based on more than cost alone. As they compete for dealer business, best offer value- added services to help differentiate their offerings and to stay competitive. In the end, it’s overall value that drives a purchasing decision.

C. Wider Selection. As most major compatibles suppliers aren't tied to products from a single OEM, they can offer a wide array of parts & supplies across a broad range of machines. For dealers, this can mean simpler “one-stop” ordering & more efficient transactions at lower cost.  Also, with a variety of compatibles available crossing different product lines, dealers can seek supplies revenue opportunities with customer machines they may not even be servicing, or offer bids for supplies contracts in which they may not have been able to participate before.

D. Robust Competition. Purchasing high-quality compatibles helps to ensure that the competitive landscape stays robust. As is the case in many industries, the mere presence of high-quality, OEM alternative products encourages competition in the business equipment marketplace and helps keep pricing competitive. It also means that there are more purchasing options and ensured sources of supply. Moreover, as sales channels expand and OEMs look to sell directly to consumers, compatible supplies provide dealers with another tool for retaining sales to their own customers and for staying competitive.

E. Performance Consistency. By partnering with the right supplier, dealers can be assured that high-quality compatibles will deliver the performance they require again and again.

Dealers should carefully evaluate their options for selecting a compatibles partner. Below are a few of the important vendor attributes to look for. Although the overall quality of compatibles has risen over the years, there are still varying levels of quality in the marketplace and there are many options from which to choose, including:

A. Sharing Expertise. A compatibles supplier must employ people with deep knowledge of the industry, who are proficient technically, who are willing and able to provide advance information on new products, in order to partner.

B. Competitive Pricing. Naturally, compatibles pricing should be consistently less  expensive than OEM equivalents, and logical and easy to understand. The best compatibles suppliers also offer meaningful product warranties, first- class customer service and other advantages.

C. Quality Assurance. Be sure suppliers can document the technical tests and the quality assurance processes they use to ensure that they deliver OEM- equivalent quality. It's a good idea to ask prospective suppliers about their manufacturing partners, the development resources to which they are tied, and the degree to which they reinvest in research and development for future products.

D. Wide Range of Products. Compatibles suppliers should offer a broad line of quality products and be reasonably speedy with their new product time-to-market to be convenient. The availability of legacy parts and supplies is also important.

Today, as acceptance of compatible products continues to grow with dealers and users, the opportunities they represent become more and more apparent. By learning about compatibles, asking tough questions of their prospective suppliers, and gaining reassurances, dealers can pass the benefits on to their print customers.

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