Power of Partnership: strategic alliances; path to success in imaging supplies3 Mar, 2015 By: Luke Goldberg, Micro Solution Enterprises (MSE)
Readers of this periodical as well as the attendees at the ITEX Expo, come seeking solutions for a myriad of complicated challenges that we face in the imaging and hard copy supplies business. Collectively, we face challenges related to how we view the future of print, IP challenges, core collection issues, and a lack of quality supply alternatives. At the same time we are trying to interpret opportunities in managed print and managed services, opportunities that might be presented by OEM changes to their distribution strategies, and opportunities created by the greening of the economy, and a still massive print business.
Navigating through all of this must be a tall order for the independent dealer out there who is seeking solutions and continuity; and many of you are coming to shows like ITEX, and reading articles like this, looking for guidance. I can’t promise this article or the ITEX conference presentation in March that I will be making at the show with my counterpart, Gil Wazana, SVP Mid-market Sales for MSE , will be the panacea for all of what ails you, or that it will provide the entire roadmap for your future success. What I can promise, however, is our opinions, knowledge and experience, which is based on more than 43 years of doing business with dealers all over the world, and through the many incarnations of this marketplace.
The way I view partnership is simple: as a dealer you need to find the right partner who will help you to understand the challenges we face and to avoid the pitfalls, while honing your business model to take advantage of the still great opportunities presented by a still massive 80+ billion dollar imaging supplies business. (Photizo 2014 Supplies Forecast 360; revenue for global ink and toner.)
In dissecting these challenges, let’s focus on those of product quality, secular changes in printing, IP issues, core collection program issues, and distribution and inventory/logistics requirements. How can my partner help me with these issues and what are the right questions to ask to determine if my partner can deal with all of this?
Product quality: clearly, we are still facing a roadblock in our supplies business, especially in the transactional side in convincing consumers that aftermarket imaging supplies provide a true alterative to the OEM. If this were not the case then why, according to Info trends, is the aftermarket share for monochrome printer in the U.S. still only 33% and color a pathetic 10%? Nearly every supplier of toner and ink consumables out there claims a leadership position in quality, while offering little to no substantiation to warrant these claims. If you are a dealer out there looking to choose the right partner, start with a visit to your chosen supplier to really understand what steps they are taking to ensure quality. What are their QC protocols? Certifications? Do they have anything tangible that differentiates them with other offerings, such as patents? Bottom line is this: so few dealers really understand what goes into their consumables… which I find incomprehensible given the long legacy of poor quality that has plagued this industry, and the fact that most global consumers still choose the OEM as their supply of choice. So many dealers don’t take enough interest in understanding the origins of their product…and view imaging supplies as a commodity.
Print; alive or dead? I think as an industry, we have relegated print to the scrapheap of technology far too early. As stated, print is still a HUGE opportunity and a viable medium for businesses to communicate internally and externally to their customers. According to Info trends in 2014, nearly 1 TRILLION prints were made in the USA…AND NEARLY 80% of those prints were with OEM print consumables. Your partner also needs to be your consultant and a conduit of information. If your partner isn’t helping you to capture your share of these trillion prints then you should question if they are the right partner.
Our opportunities in print are further enlivened by more OEM price increases in 2014…and further changes to HP’s distribution model, which resulted in thousands of dealers that can no longer buy supplies from a tier one source. What should these dealers do that are de-authorized, and what are partners in the space doing to help them?
Is your partner offering training to your sales team on how to initiate true OEM conversion strategies to capture this opportunity? Are they empowering you with marketing support and other tools that equate to igniting growth?
IP challenges… and yes, that means for you, too! If you aren’t aware of the feverish pace of changes to the IP climate in today’s business then you owe it to yourself to quickly get educated. IP challenges from OEMs seeking to protect their intellectual property and secure their supplies business do ripple down to every tier of the business, from manufacturer to final tier dealer. Most dealers don’t have the legal resources to deal with the complicated morass of detail surrounding intellectual property, and that is where partnering comes into play. Does your partner have its own legal team to provide IP due diligence? What kinds of protection are they offering you as the dealer? What are the challenges associated with selling new compatibles versus remanufactured options that are repaired? If you are buying new compatibles, does that supplier offer a method to return cores? Is there any end of life options for these products? If you are buying remans, how robust is your partner’s collection program? Does it include other sectors of e-waste? How easy is it to manage? Your partner needs to understand the distinctions. Every dealer needs to understand that “I am too small” isn’t a viable IP defense strategy.
Logistics/distribution challenges: More and more dealers are going stockless. They require multiple distribution points, connectivity options, etc. They are looking to simplify the delivery of supplies and streamline operations to lower costs and tie up less cash with inventory. There are many great distributors in the space that provide these services under one roof, and more manufacturers are also looking to offer enhanced distribution, connectivity, and toner replenishment programs. Both manufacturers and distributors are also offering a suite of MPS solutions and turnkey options for dealers. I believe this is an area where dealers are asking many of the right questions about this value-add programs, so I don’t need to spend any more time on it here. Just remember, you can have the most streamlined logistics in the world, but if you don’t deliver world-class products, all of the efforts to deliver it seamlessly will be moot.
We look forward to meeting many dealers at the ITEX Expo, where in our presentation we will further flesh out this dialogue. We hope you will find the solutions you’re seeking, and we’ll help to ensure that you are asking the right questions. Visit itexshow.com for event details.
Luke Goldberg is Global SVP, Sales and Marketing, Clover Technologies Group/MSE. For detailed information visit www.clovertech.com