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The Advantages of Compatible Parts & Supplies

10 Sep, 2003 By: Erik Norman, KATUN Corporation imageSource

The Advantages of Compatible Parts & Supplies

you purchase OEM parts and supplies or should you invest in OEM-equivalent
products from companies offering compatibles? It's an old question, but one
that's becoming increasingly easy to answer.

days, with more dealers turning over every possible stone to locate
opportunities for added operating income, OEM-equivalent parts and supplies are
more attractive than ever. What's changed? Three important factors have elevated
the place of compatibles within the industry and earned them the loyalty of
thousands of dealers and end users around the world.

first factor is quality assurance. In the early 1980s, when the compatibles
market was just 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 "must-have" and a
fundamental baseline from which to do business. Suppliers without a
demonstrated, longstanding commitment to quality in their compatible products,
have difficulty competing in today's market. As such, customers should
rightfully expect the quality of compatible parts and supplies to be equal to
OEM products.

second factor is that profit opportunities for hardware sales are shrinking
while copy volumes and toner volumes continue to increase. This has placed more
focus on generating profits with service and supplies. As a result, dealers
should leverage highly reliable, low-cost compatible parts and supplies to help
lower their total costs, become more competitive and improve their ability to
serve customers.

quality at par with OEM products and the importance of parts and supplies
increasing within the typical dealer's overall business, the third factor
becomes even more attractive-cost savings. Compatible parts and supplies tend to
be priced significantly less than their OEM equivalents, representing a typical
savings of about twenty percent.

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 pencil out to better margins,
higher profits and sustained customer satisfaction for dealers in the long term.

Of Using Compatibles

Why should dealers consider and purchase compatible parts and supplies? A number
of different reasons continue to converge and strengthen, making compatibles a
wise choice.

-A customer is always better off when there is competition
for his or her dollar. Purchasing high-quality compatibles helps to ensure that
the competitive landscape stays robust.

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.

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

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

-As most major compatibles suppliers aren't tied to products
for a single OEM, they can offer a wide array of parts and supplies across a
broad range of machines. For dealers, this can mean simpler "one-stop"
ordering and 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.

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

The Right Compatibles Supplier

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. Dealers should carefully evaluate their options for
selecting a compatibles partner.

are a few of the important vendor attributes to look for: Quality
Assurances-Suppliers should be able to document the technical tests and the
quality assurance processes they use to ensure that they deliver OEM-equivalent
quality. It's also 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. All of these are good indicators of a supplier's commitment to
sustaining high levels of quality and customer trust.

Wide Range Of New And Legacy Products
-For both convenience and
efficiency, compatibles suppliers should offer a broad line of quality products
and be reasonably speedy with their new product time-to-market. The availability
of legacy parts and supplies is also important. Look for compatibles suppliers
that cover both ends of the spectrum well.

And a Willingness To Share It
-To be a true business partner, a
compatibles supplier must employ people with deep knowledge of the industry, who
are proficient technically, and who are willing and able to provide advance
information on new products.

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

Compatibles To Your Customers

With so much riding on every customer's satisfaction, it's understandable that
dealers have had concerns about end user perception of compatible parts and
supplies in the past. At times, dealers have been cautious about using
compatibles due to concerns about consistently reliable quality.

however, when working with reputable compatibles suppliers, dealers need not be
concerned. They may purchase compatibles with confidence that their customers
will be satisfied. And dealer customers can be perfectly comfortable with
compatibles-even to the point where they request them. This is due in large part
to the assurances that compatibles suppliers can make to the dealers themselves.
If the dealer has confidence in the product and the supplier, he or she will in
turn be able to represent that product with confidence to the end user.

should be able to demonstrate OEM-equivalent performance and yields for dealers.
They should be able to describe strict acceptance criteria for the products they
market. And, dealers should expect suppliers to be there when questions arise.
All of these things help the dealer explain and recommend compatibles to their
own customers.

use of compatibles provides a strong opportunity for the dealer to demonstrate
that he or she is looking out for the customer's best interests. By offering
compatibles, the dealer is offering quality products that either lower the
customer's overall costs or enable the dealer to maintain contract prices for
longer periods.

all, the most important things that most end users want to know are that the
machine is working, the output is superb and that the bills aren't too high.
Whether users are aware that their dealer is using compatibles or not, today's
high-quality compatible products address all of the end user requirements as
well as OEM products, while offering other advantages at the same time.

A Competitive Advantage

Compatibles have truly earned a rightful and proven place within our industry.
They deliver quality, value and a real alternative to OEM products. Today, as
acceptance of compatible products continues to grow with dealers and users, the
opportunities they represent become more and more apparent.

learning about compatibles, asking tough questions of their prospective
suppliers and gaining reassurances that they can pass on to their own customers,
dealers around the world can uncover new ways for their businesses to succeed by
looking in a place they may have overlooked before. In today's competitive
marketplace, that's good news for everyone.

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