Cost per copy all-inclusive agreements

[coolbeer]

Looking for feed back on those of you who supply cost per copy all inclusive service agreements.
Prices seem to becoming increasingly unrealistic, we supply colour Ricoh colour mfp & printer products and are finding toner & pcu prices rising rapidly but customers are being offered contracts at 3 - 4p colour & 0.5p black/white on low volume monthly contracts ( 1 -2k prints ). Also machines being offered at little upfront profit. Surely this has to end in tears !!!
We have tried compatible toners, although initially much cheaper, longer term we find the saving is eaten up by less reliability from machines and shorter pcu & dev life.

Interested in your findings.

[fixthecopier]

Re: Cost per copy all-inclusive agreements

Yes it sucks out there. I had a contract that had machines in 5 different groups. The largest machines were 60 pages a minute and they paid for 20,000 prints at 1.5 cents a page. The smallest machines were 20 pages a minute, and they bought 2000 a month at 4 cents a print. My competitor bid against us offering machines at cost per print with no minimum. We lost the contract because Konica had not perfected their card reader to government specs. When my competitor found that out, they jacked their cost per copy to 4 cents and color to 8.9 cents on their Ricoh machines, with no minimum amounts. If a copier does 100 copies this month, they get $4. They have between 1,000 to 1,200 machines total and use about 4 or 5 techs and a field supervisor to manage it. My boss is sure they are loosing their ass.The Ricoh card reader has a lot of flaws, and it was not long before most of them were disconnected. That outrageous 4 cents a page is more of your government tax dollars hard at work. Our bid for the contract was a flat 2.2 cents across the board with the monthly minimum amounts, but no overage charges.

The best thing you can do to keep business, is make your customers remember you and like you. When customers like you they are more forgiving of machine problems. My competitor is the only authorized HP repair center in my county. Lots of their copier customers still call me to repair their printers and I love nothing more than putting my sticker on a printer sitting next to their copier.

[mjarbar]

Re: Cost per copy all-inclusive agreements

We have also come across Ricoh offering the machines for 0.4p Mono / 4p colour and as we are supplying Canon machines find it very hard going to compete on price. One way we are doing it is on the customer service front by offering reduced call out times etc. but at the end of the day the cost will always tell.

We are using compat toners and so far the servicing hasn't been affected any more than usual but we did do extensive testing before using them and certain customers we have "ring fenced" to use originals only.

[Simons]

Re: Cost per copy all-inclusive agreements

Which Canoncolor toners are working for you? The Katun Canon stuff? What color models?

[mjarbar]

Re: Cost per copy all-inclusive agreements

Which Canoncolor toners are working for you? The Katun Canon stuff? What color models?

Katun business or performance irc2880 toners mainly, we also use the 3200 and 4080 toners but these are only for customers that need office based colour. Our customers that are in the graphics business and estate agents have a choice but mainly we keep them on originals.

Of all things we have had more trouble with is the iRxx70/30xx range of mono toner knocking out dev. cylinders early, mainly the access toner but the performance seems to be a bit better. Saying this though I have to go look at an iR3570 tomorrow that has fading down one side of the page. I'm hoping it is the drum due for a change but you never know till you get there!

[cccjjn]

Re: Cost per copy all-inclusive agreements

I recently saw one from Ricoh direct that was a Ricoh Pro 907 series production machine on a 48 month cost per page lease including the hardware, all service and supplies for $0.0097 at a school doing roughly 750K per year. Basically giving away the machine. My cost for that configuration was over $28K for the hardware alone.

[kingpd@businessprints.net]

Re: Cost per copy all-inclusive agreements

We've been focusing on placing more used/off-lease machines than new ones so the profit on the machine is much higher. The major downside is always having the right machine available for the customer.

[kingpd@businessprints.net]

Re: Cost per copy all-inclusive agreements

I'm going to add this thought since I think it would solve a lot of problems. Why shouldn't we try and switch customers over to buying their own toner? We could do a CPC program that includes everything but paper and toner. That solves all of the cpc issues such as high toner coverage and density.

I know it's going completely against the reality of what we and our predecessors have done to get us all in this predicament but it seems fair to me.

[mjarbar]

Re: Cost per copy all-inclusive agreements

I'm going to add this thought since I think it would solve a lot of problems. Why shouldn't we try and switch customers over to buying their own toner? We could do a CPC program that includes everything but paper and toner. That solves all of the cpc issues such as high toner coverage and density.

I know it's going completely against the reality of what we and our predecessors have done to get us all in this predicament but it seems fair to me.

We already do this, we have a standard cpc which includes toner, drums, parts and labour (rate of which is dependant on the machine). We then have variations on this with various bits taken out to suite the customers needs.

However the problem with this is that it gives no loyalty to the company as the customer is then free to shop around, and doing this the first person to offer a machine at a cheaper rate and the customer is off down the road. The only exception, we have found, is where the machine is on a T&M basis but the toner and drums are included.

There are a lot of financing options out there which should mean that somewhere there is an all inclusive deal that both the supplier and the customer can live with, add to this the best customer service you can give means that you build a loyal partnership with your customer that keeps them coming back time and again.