October 2012

Convergence: Print, Copy, Fax, Scan.

Is It a Printer that Copies or a Copier that Prints? How the Convergence of Copy/Print/Fax/Scan has Blurred the Lines.

By: Kevin Gumpp for Market Point

Whether you call them copiers, printers or MFPs, the convergence of copy/print/fax/scan has created a blur in our use of the terms. Today, most people use “copier” when they are really talking about a multi-function printing device (MFP) that does copy, but also prints, faxes and scans.

OEMs who started out in the traditional copier market, such as Xerox, Ricoh, and others, and the companies that sell and service those brands, refer to them as copiers. They are the “office machines” businesses who have traditionally sold to office managers, purchasers, etc.

OEMs who started out in the laser printer business, such as HP and Lexmark, and the companies that sell and service those brands refer to them as printers or MFPs. They are the “printer” companies who have traditionally sold to IT departments.
Those lines are now blurred. Copiers print and printers copy. For the sake of clarity in this article, we’ll refer to them all as “copiers”.

Why don’t we see many HP MFPs in the market place?
While HP probably makes one of the strongest, most durable machines available, you don’t see very many companies using them as their main copier. I believe the majority of companies are using Ricoh, Toshiba, Sharp, Konica, or Xerox brands as their main copier.

I wondered why, since I often hear customers say, “I never have my HP printer serviced but I have my copier serviced all the time.”

So let’s explore that question – why haven’t HP and Lexmark become more dominant in the traditional copier market like they have in the printer market?

Anatomy of the Sales Organization
Copier dealers pay sales personnel by commission. Most traditional copier dealers specialize in models like Sharp, Konica, Toshiba, etc. because these manufacturers only sell specific models to dealers, making it hard to find them anywhere else at a decent price. And because the dealer specializes in these specific machines, they sell a lot more and, therefore, they get special pricing from the manufacturer.

On the other hand, anyone can purchase HP machines just about anywhere, so there really is no margin for mark-up and, therefore, not a lot of incentive for the sales person inside a dealer to sell them. You might think that HP partners would get good discounts from HP, but I know the discounts given to copier dealers and there is no comparison between that and what HP gives to its partners. A copier sales rep can sell, for example, one Konica copier and make the same commission they could get from selling 5 to 10 HP machines. So copier sales reps will always try to sell another brand over HP.

You can call just about any local service company to have your HP or Lexmark machine serviced. Parts for these machines are sold everywhere on the internet or locally. So, as with the machines, there is very little room for mark-up on parts.

However, if a copier dealer sells you a Sharp or Toshiba, for example, you generally only have one or two choices of where to get your copier serviced….from a dealer, making the cost of service parts pretty high, unless the machine is under contract.

The theory behind this selling strategy is that if your copier breaks you will most likely have to go back to the dealer that sold you the machine because they are one of the few people around that will service it. Again, an incentive for your sales rep to guide you into one of the models that provides a better margin for their company (and commission for themselves).

HP machines tend to break less frequently than other manufacturer’s machines. I just serviced an HP M5035 that is over three years old, had never been previously serviced, and had over 200,000 copies on it. Good luck finding any other manufacturer’s copier that will go 100,000 copies and has never been serviced. It just doesn’t happen. Most drums and developers on copiers are only rated between 80,000 and 120,000 copies and require a service call.

One of the main comments I get from customers is, “I’ve had this HP machine for five years and this is the first time I’ve had it serviced. The copier technician is here every 3 or 4 weeks working on our copier”.

Back to the sales angle for a minute — Renewing a service contract on an HP machine will be a hard sell. It’s not easy to convince a customer to sign a new service contract on a machine that they never need serviced. However, after seeing the copier guy seven to eight times a year that same customer will be quick to renew a service contract on the copier because they just see dollar signs if they have a repair person out that many times and the copier is not under contract.

Quality Issues with HP
I will say I’ve never been impressed with HPs copier / scanner modules. For example, if you open up a Konica or Sharp’s ADF and look through the flat bed glass you will see lots of sensors and moving parts. While more complicated, these parts allow the copier module to have more features and make it more durable. Obviously HP makes a better print engine but they have a long way to go when it comes to building a proper copy module.

I’ve been told by one of my vendors that HP holds 75% of the market place in printer purchases. So like any other high demand manufacturer they set their prices based on the name. HP machines tend to cost a lot more than other brands. If you’re reading this article you would think that the price might be worth it. The thing is, most purchasing agents are looking at the bottom line, which to them is the purchase price. Their logic goes something like this….”If I spend $2000 less here, that’s $2000 I have to buy four new printers here or two computers there.” They don’t take into account the lifetime cost of the purchase for parts and service.

Also, most copiers come with a contract making it easier for the accounting department. They pay one bill a month for the usage and any repairs or toners needed are covered under the contract. Accounting sees added expense for the next three years. Again, they don’t realize that in the long run they’re probably paying more. They just don’t have to worry about an expensive repair bill out of the blue. Plus contract customers typically get priority over other service calls.

Below I’ve listed some of the benefits of HP and the other manufactures. Basically, if I list it as a benefit for one brand then it would be a strike against the others. Here’s an example: HP’s are easy to configure. Generally other manufacturer’s machines are more difficult to install and usually require somebody who is familiar with the product’s software to have any success in getting it setup right.

Keep in mind, I’m being general here. These circumstances are not always the case. As always, do your research and don’t take the first offer you see. Also, these might be questions to keep in mind when you’re thinking about making your next copier purchase.

Benefits of HP Copiers

  • Easy to Configure – HP has been in the computer software market a lot longer than copier dealers so they understand how to make software a customer can easily figure out.
  • Preventive Maintenance (PM) parts are easily replaced – Drums and developers are in the toner cartridge so imaging products get replaced without the need for a repair person. Fusers, PM kits, rollers, and ADF kits come with instructions and can be replaced easily if you follow the instructions. You can even do it if you’re illiterate because they have pictures!! LOL!
  • Built to Last- Putting 1 million to 2 million copies on a machine like a MFP 9050 will not be a problem.
  • Easy to find service and parts – Everybody repairs HP’s and everybody sells parts. If you’re unhappy with your current provider it’s easy to call around and find somebody else.

Benefits of Other Manufacturer’s Copiers

  • Have more copier features – They’ve been in the copier industry a lot longer than HP so they have more specialized copy features. Sometimes the difference in selling a machine can be its specialized features. And they usually have a lower cost per page than HPs.
  • More options – Additional trays, finishers, sorters, staplers. Each machine can be uniquely built for specific features.
  • Cheaper and typically more options as far as maintenance contracts, leasing, or outright purchase.

Really, there is no right or wrong way to go. While I believe HP machines, like the 4730 and 9050 MFP’s are some of the best machines out there, it’s a lot more profitable in our field to service other equipment. I just wanted to share why there are not a lot of HP copiers in the market place.

I don’t really think HP has ever pushed the issue. They must have decided a while back that they would market their own product and not give special deals to dealers because they know they are going to get the business anyway.

Copier dealers have been around for a lot longer than HP and its sales model. Customers are used to copier contracts. It’s just a part of doing business for most companies. You have a copier, it’s under contract, so you call the copier guy when it breaks.
The main thing I would like to point out is that you shouldn’t just take the first copier recommendation that comes in your door. Do your homework. I see customers all the time who tell me what a great deal they just got on their new machine. I say “good for you, glad it all worked out”, when I have a customer I talked to yesterday who just got there for a lot less from somebody else.

Of course, I’m also thinking that I could have sold them something a lot cheaper, at a lower cost per page, if they only would have let me know they were looking!

While it might be nice to one day see HP more predominant in the copier marketplace I believe HP would have to restructure how they price and sell these machines. Until it’s more profitable for dealers, it’s going to be hard to convince them to sell these machines. Add to that the fact that most copier manufacturers go out of their way to make dealers feel special and needed; something HP really needs to focus on but that’s a whole other article (or maybe a book). I just thank my lucky stars I only have to fix their equipment

Please read November’s issue of PowerSource Online Magaizne to understand this topic from the Lexmark perspective.

About the Author
Kevin Gumpp is a certified printer technician and freelance writer for Market Point. If you have a question regarding this topic or have any other printer repair related questions or topics for which you would like more information, please send an email to maryp@marketpoint.com.