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The first Steps to Creating a Profitable Printer Service Department

31 May, 2005 By: Steve Geishirt imageSource

The first Steps to Creating a Profitable Printer Service Department

Understanding that you have to
provide printer service to improve your business and having the knowledge to get
it accomplished successfully can be two completely different issues.

If you do understand the importance of servicing printers, you are on the right
track. However, during my seminars at the ITEX show in February, I learned
something valuable—just because a dealership is servicing printers, doesn’t
always mean they know how to.

For example, 99 percent of my audience raised their hands when asked if they
service printers, but 98 percent of them immediately dropped their hands when
asked if they were making money doing it.

This was a clear indicator that copier dealers are taking on printers, but it’s
foreign to them—just like copiers are foreign to most printer service companies.

Enough said about what we already know, let’s get into what it takes to get into
printer service and how to make it work for you. I have spent multiple hours
talking to copier dealers to find out what they were doing to succeed in printer
service. Out of that, I identified eight steps to creating a successful laser
printer service department. Those steps are:

1. Gathering Customer Information

2. Gaining Brand Knowledge

3. Determining a Service Approach

4. Pricing Service

5. Selling Toner Cartridges and/or Ink Cartridges

6. Whole Printers

7. Management Involvement

8. Marketing

Step One: Customer Information

By reading this you are already well on your way. Information can be gathered by
reading articles, such as this one, and scoping out your current customers.

Have your sales reps and service technicians get a feel for what printer brands
and models they currently have. Many people assume it’s always HP that they will
find in the office place. While this is typically true, it’s not always the
case. Lexmark, Brother and Oki are also prominent in the workplace. So don’t
make assumptions—gather information.

A good way of gathering information is to ask your customers directly. Most of
your customers will be willing to share information with you about their
businesses. Some good questions to ask customers are:

Who presently services your printers?

● What other services have you used?

● Why did you change?

● What does the other service company charge for a service call?

● How do they charge for service?

● Time and materials

● Service contract

● Cost per page

● What other benefits do you get from them?

● Discounts on toner cartridges

● Quarterly printer cleanings

● Quick response time

● How satisfied are you with the current service?

These questions will give you a good feel for who your competition is, and how
you can best approach the market. Questioning them on what benefits they get
from their current service is important.

Some service companies will provide a discount on service if the customer buys
toner cartridges from them—OEM or remanufactured. Some will provide monthly or
quarterly cleanings. You need to take this into account. Cleaning is a good
value to a customer, and you as the service provider. A clean machine will have
fewer problems than a printer that is full of abrasive paper dust and toner.

It is very important when asking these questions that you are talking to the
right person. If you are talking to purchasing, you’re talking to the wrong
department. You have to talk to the network people—IT. These are the people who
make the decisions on what gets connected to the network.

Getting into a conversation about printers is not hard to do. IT, also called IS
or MIS, view printers as problem children. Printers are more of a necessary evil
to IT. But even necessary evils need solutions, and that’s where you come in.

Provide a solution by adding to your present service. Point out that you already
service the company’s copiers and faxes and adding printers to the list would be
an easy next step. The relationship already exists, and you would be happy to
take on this necessary evil that they don’t want to deal with. Opportunity is

Step Two: Brand Knowledge

Knowledge covers several different areas, but a big one is parts availability.
In the copier world, the parts market is closed to unauthorized buyers, unless
they want to pay list price. This, in effect, keeps competition out of the
market and supports authorized dealers.

In the printer market, it’s not always that way. Note, I said not always. Most
of the parts market is opened and OEMs will sell parts to you directly, or you
can buy them via a parts distributor. Printer OEMs that have an opened
distribution model are:

● HP ● Lexmark ● Oki ● Panasonic

● Canon (parts are available for the inkjet line, but laser parts are a closed
distribution model)

Printer OEMs that have a closed distribution model are:

● Epson ● Dell ● Brother ● Sharp ● IBM

The advantage of the opened distribution model for printer OEMs is it’s easy for
the end users to find service at a competitive price. This gives these OEMs a
big advantage as customers can easily find service and won’t be afraid to buy
that brand of printer again. Customers who buy printers with a closed parts
market may struggle to find local service, especially in more remote areas, and
are sometimes shocked at the price of repair. So much so, they decide to buy a
different brand of printer instead.

Both opened and closed parts distribution models have advantages and draw backs,
but you can’t discount the market penetration success of the companies with the
opened parts market.

The question becomes, which printer brand do you decide to service? Choosing one
with an opened parts market model is easy because you can get parts and manuals
via parts resellers and not have to get authorized. Choosing a closed parts
market model requires more work because you need to become authorized. Once
authorized, you can gain access to parts, manuals and other information. We will
discuss OEM authorization in greater detail later.

Just to mention, the availability of service manuals and training is key.
Service manuals are a must, especially when working with printers that have no
display—just idiot lights. Light combinations are translated into service codes,
but only via the service manual. Many manuals are coming out on CD-ROM, which is
great for placing on laptops or printing out copies for multiple technicians.
Training should allow the technicians to get their hands on and into a printer.
It should also contain common break-fix information. This helps technicians
quickly diagnose and repair printers, shortening the repair time.

It is also good to know basic information such as when a printer was introduced
and its original sale price. This is helpful when deciding to take a printer
under contract. If you are considering taking a printer under contract where you
are responsible for parts replacement, you’ll want to know how old the printer
is. The older the unit, the more parts it will require and the more expensive
the contract to the customer—just like a copier.

Much of this information is available from a number of services and from some
parts distributors. Speaking of part distributors, it’s good to know if a parts
distributor supplies technical support. This is for those times when the
technician gets stumped trying to fix a machine. The OEMs have technical
support, but you often need to be authorized to get it.

Step 3: Service Approach

Determining a service approach has many facets. The first is what types of
printers to service. The possibilities include:

1. Laser

2. Inkjet

3. MFP

4. Dot matrix

5. Thermal

6. Plotter


Most agree that laser printers make sense to service, but laser printers range
in price from under $300 to well over $3,000. Will a customer really want to
repair a $300 printer? In most cases they won’t. They may ask you to take a look
at their low-end laser printer to see what it would cost them to get it

Think about this, once you add up a one-hour labor charge and then add parts to
the repair, you’re probably beyond half the cost of the printer. The rule of
thumb for printer repair is if the price of repair is half the cost of the
printer, the customer won’t want to do it. Instead, they’ll put that money
toward a new printer.

One good way around this common scenario is to require a bench fee up front just
to look at a printer, especially a low-end unit. If the customer won’t pay the
bench fee—usually one-half to three-quarters of a one hour service charge—up
front, they really weren’t interested in the first place.

When it comes to laser printers, a good rule is to service printers that are 30
pages per minute and faster. Printers that are slower than this are typically
small office or home office printers. If you service printers below 30 ppm, keep
the service simple—meaning pick up rollers, separation pads, transfer rollers,
and fusers. If it looks like a main logic board problem, it’s best to get the
customer to sign off on a bench fee first because odds are they won’t want to
pay to repair it.


Nearly everyone at the ITEX show said no to inkjets. One gentleman, however,
explained how he repaired a $100 inkjet for a customer when the repair cost
$150. Why would a customer want this? In this case, the customer had purchased
over $300 worth of ink cartridges for that printer. In essence, this wasn’t a
$100 inkjet printer awaiting repair—it was a $400 inkjet. What appears obvious
isn’t always, so don’t make assumptions.

As with low-end laser printers, inkjets of all makes and models should have a
bench fee in order to check the customer’s interest. This includes business
inkjets, which have been a promising product line, but never seem to catch on.
Business inkjets are getting to the point

where they have a lower cost per page than laser, and produce higher quality
prints. However, they are still slower than laser printers.


MFPs should definitely be serviced by dealers. After all, these lines of laser
and inkjet printers should be pretty similar to what you’re already working on,
but on a lower-end scale. I think they are worth addressing as most inkjet MFPs
are still expensive enough that customers will choose to repair them. To the
customer, this is a more complicated machine and not a throw away.

The others

Other types of printers to repair include dot matrix. They are still around and
necessary in many environments. Thermal printers, which seem to be dying off,
are also still around. About one-third of the attendee’s at the ITEX seminar
were servicing them. Thermal isn’t just the old thermal paper type printers of
long ago, but are now found in cash registers and similar quick print out type
machines. Next time you’re at the store, check your receipt to see if it’s

Plotters, more specifically the HP DesignJet line, are becoming very popular in
places such as architecture companies, graphic arts businesses and government
agencies. These units have been called inkjets on steroids due to how similar
they are to their smaller cousins. While it’s true they are similar, there are
differences, especially on machines that run from $1,500-$30,000 per unit. Parts
are available as well as manuals and there are good margins to be made on
servicing them.

Who services these machines?

The answer to this: it depends. In talking to some of the companies that were
succeeding in printer service, they had a hand full of printer technicians who
did nothing but address printer issues. They let the digital copier, color and
fax guys do their stuff. This allows techs to improve in certain aspects of

Other companies trained all their people to troubleshoot at least the basics.
Taking note of image defects, paper path problems and error codes, they can at
least call back to the office or technical support for help if they need it.
These companies had people who were stronger in printer service, but that was
not their sole responsibility. Looking at these two scenarios, why would anyone
choose the second?

The first group with the printer-specific service technicians had smaller
service areas. They serviced within a city and didn’t need

to travel far. The second group provided printer service to a whole state or
region. It didn’t make sense to have printer-specific technicians driving from
one side of the state to the other and then back again to service printers. So
much of this can be decided on your service area.

To be or not to be?

So, should you become OEM authorized or not? There are positives and negatives
to both. In some cases, it’s not a choice, but a necessity. These are the
previously stated cases when the only way you can get parts, manuals and
information is directly from the OEM. If the OEM has a closed parts model, and
you have a lot of customers with that brand of printers, this may be your only

Another choice could be to partner up with another business that is authorized,
but the risk is you could lose the business to them. Also, if your business
takes off, as it should, the business partner may not be able to keep up with
the demand and that could be a risk to your business.

Let’s look at some of the positives and negatives of becoming OEM authorized:

● Able to do warranty work for your customers

● Access to OEM service information

● Can legally advertise your authorization

● Warranty rates are low – you’re not going to get rich doing warranty work

● OEM’s often require minimum annual parts purchases at a higher cost than using
a parts distributor

The positives make a good case to become authorized. Many dealers I spoke with
had two or three printer authorizations. No one really expects to get rich doing
warranty work, it’s a service you provide to get future and other post-warranty
work. Most dealers I spoke to felt the trade off was well worth it.

These are just three of the eight steps to creating a profitable laser printer
service department. Next month, I will cover one huge issue—pricing—and the four
remaining steps in the third and final part of this three-part series.

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