Log in

ISM Article


6 Jan, 2009 By: Jack Duncan imageSource


inherent problem with “supply included” is that our customers think that their
supplies are basically free! And this means that their hands are  in our cookie

How does this initially happen? Simple. Customers call and
order supplies and we ship them out. But do we ever calculate what they really
need – or how much they already have? Do we consider their average monthly
volume and the yield of the toner? More often than not, we just ship what they
ask for. That means that we incur the cost of goods and bet that they will
eventually run the copies so we can bill them. When we only had black & white
equipment it was not much of a problem, but with the advent of color we may be
shipping as much as $1,100 in supplies. Now we have got to pay attention! We are
literally bleeding profits!

What preventative measures can we take? With good software we can set up
toner yields and use that information to track usage to predict which machines
will need toner soon and which ones have a year’s supply of toner (or more). The
idea is to produce a list that will allow us to call the customer, see what they
have on hand, and ship what they need without over-shipping. We can take
ownership of their toner needs and now have a method of controlling our cost of

What else can we do? How about a “Toner Roundup,” where your technicians take
inventory of supplies when they are on their regular service calls. Have them
bring back supplies that are over one month’s usage. You can even make it a
contest: Reward the tech that brings back the most supplies. Do a reverse order
to bring back the supplies into inventory and you will also correct their
profitability reports.

Is there a better way? YES! A good case can be made for using software that
can not only gather meter readings but can tell you when supply levels reach 80%
depletion. The machine will actually tell you it needs supplies – how much
better can it get than that?

Automated meter readings and alerts are practically a
necessity. Consider a contract where you must bill 300 machines on the 15th of
the month. First, it’s a nightmare of emails, faxes or phone calls to get all
the meters because you can’t bill them until you get all the meters. Then, some
may be wrong, but you won’t find out until they refuse to pay the bill. Now you
have to correct the bill, re-mail it and wait for the check. Instead you could
have the machines send you the meters with no mistakes on the 15th, push them
into your software automatically, and email the invoices. That translates
directly into cash flow. Studies have shown that manual meter gathering methods
can vary in cost from just over $5 each to over $20 if you have to send someone
out to get them. The method you choose should eliminate the need to be on site.

Secondly, the ability to get emails from the machine when the toner levels
reach 20% means that you now control the toner shipments, not the customer. This
takes the risk out of over-shipments and protects your profits! Add to that the
potential for the machine to give you toner yields, and you have the best of
everything. Be sure that you have written into your contracts the ability to
bill additional for supplies that do not make manufacturers suggested yields,
then your profits are in the bag.

I would also suggest that having the ability to send toner when the machine
needs it would eliminate the customers having to monitor their supply levels.
Wouldn’t  you think this is a good marketing strategy?

Jack Duncan is an independent consultant with over 35 years of industry
experience, working with multiple clients around the country, specializing in
increasing productivity and profits. Jack can be reached at 469-287-2605 or


WebinarCase Studies and White PapersSand Exchange Blog

imageSource Magazine Quick Links
Upcoming Events
ITEX Expo & Conference
©2015 Questex, LLC. All rights reserved
Reproduction in whole or part is prohibited
Please send any technical comments or questions to our webmaster