Buying Profitably from Aftermarket Suppliers27 May, 2003 By: Ray Meifert imageSource
Buying Profitably from Aftermarket Suppliers
In today's tough economy, copier and printer dealers everywhere are finding
it more difficult to stay profitable and on the path for growth. Succeeding
today not only means working harder, it means working smarter to locate those
hidden opportunities to drive revenue and cut costs.
In that light, it's an especially appropriate time for dealers to review all
aspects of their business operations - even those that seem routine - to see
where changes might be made for the better. One promising area, often
overlooked, is the sourcing of supplies and parts.
The Supply Side
For years, many dealers have turned to aftermarket suppliers instead of OEMs
because of the pricing advantages they offer. Too often, though, the discussion
ends there. Pricing is important, but it's simply one element of the overall
value that an aftermarket supplier should deliver. A relationship with an
aftermarket supplier should go beyond the simple filling of orders. A supplier
should be a dealer's business partner- working with the dealer to enhance
revenue, to reduce current costs and avoid future costs.
Of course, not all aftermarket suppliers are the same. They vary by size,
reach, product offering and dozens of other ways. In that sense, they can often
be difficult to compare. These days, however, successful suppliers are doing
more to gain and retain business. They are realizing that success does not
necessarily hinge on price alone and that they must provide other compelling
reasons for dealers to do business with them.
This means that dealers now have more opportunities than ever to evaluate
aftermarket suppliers and the products and services they provide. A systematic
approach can be helpful in judging current or prospective suppliers. Using the
following ten specific criteria, dealers can rate the total supplier offerings
and compare the important points. While these criteria are specific to
aftermarket printer and copier suppliers, they also are good rules of thumb for
1. Does the supplier demonstrate consistent, OEM-equivalent product quality?
Quality must be a given. A less-expensive product represents value only if it
performs as it should. It is one thing to claim quality; it's another entirely
to be able to prove it. Suppliers should not only claim to deliver quality
products, they also should be able to produce valid documentation regarding
technical tests and the quality assurance processes they use to ensure that they
deliver OEM-equivalent quality. Among the obvious advantages this brings, it
also eliminates the need for redundant, time-consuming acceptance testing, which
means that savings can begin sooner for the dealer.
2. Does the supplier offer one-stop shopping? For both convenience and
efficiency, many dealers are attracted to suppliers that offer a broad line of
quality products. This is an advantage of aftermarket suppliers generally, as
opposed to OEM suppliers that offer a single brand or line of products. But
there are considerable differences in the breadth of product offerings carried
by aftermarket suppliers. By consolidating supply relationships with a limited
number of sourcing partners, dealers can streamline invoicing while reducing
operational and logistical costs.
3. Does the supplier employ committed sales and marketing personnel? To be a
true business partner, a supplier must have people who know the industry, are
technically proficient, and are willing and able to provide advance information
on new products. Committed staff should demonstrate knowledge and interest in a
dealer's overall business over time - not just a single transaction.
4. Does the supplier offer innovative purchasing and incentive programs?
Suppliers should reward loyal customers by helping them decrease the costs of
doing business. In considering suppliers, dealers should be sure to evaluate how
the supplier helps cut costs with purchasing and incentive programs such as
promotions, packaging alternatives, price discounts, electronic ordering and
5. Does the supplier offer competitive pricing? Aftermarket pricing should
not only offer consistent discounts compared to OEM products, it also should be
logical and easy to understand. Remember that overall cost is more than the
price of the product, but the amount paid to use it. Low pricing is not an
advantage if other aspects of the supplier relationship end up offsetting the
6. Is the supplier speedy to market without sacrificing quality? Dealers
should expect suppliers to be fast to market with new products, but there can be
such a thing as "too fast." Thorough and careful quality assurance testing of
new products takes time, and dealers should be extra discriminating about
aftermarket products introduced fewer than six months from OEM introductions of
the same technology.
7. Does the supplier provide meaningful product warranties? Dealers should
look for aftermarket suppliers that assume responsibility for issues that arise
with products. Warrantees should offer quality assurance and performance
guarantees that clearly delineate performance measures and how the company
responds in the event of problems.
8. Is the supplier experienced and financially secure? The past decade has
seen a fair amount of consolidation and failure within the industry. It's safer
to deal with suppliers that have solid industry experience, a firm financial
footing and a good reputation. Suppliers with a strong customer base have worked
hard to achieve it and are motivated to maintain it in the face of fierce
competition-and that can be a real advantage for the dealer.
9. Does the supplier perform rapid, dependable order processing? Dealers need
products when they need them. Suppliers should not only know how to sell
products, they also should know how to move them-reducing the dealer's need for
large inventories while minimizing machine downtime and repeat service calls.
Electronic order processing helps to speed turnaround time while making the
10. Does the supplier offer excellent customer service and tech support?
Suppliers should be able to understand and respond to needs quickly, with
skilled tech support personnel available who understand their product line. It's
good to evaluate how well the supplier answers questions and the speed and
substance with which they do so.
Suppliers that rank highly on most or all of these criteria are working hard
to merit a dealer's business. These suppliers will be most likely to deliver
quality, reliability and service from a single source. They'll help dealers to
develop longstanding value with customers while increasing sales and share.
They'll also help the dealer keep products sold, sustain and build the dealer's
reputation, and assist overall profitability.
And, especially in these tough economic times, dealers should demand nothing