You Can Profit From Printer Sales

VARs can earn from 3% to 15% margins on printers, depending upon the vendor and the price, according to two vendor executives. But too many VARs ignore the after-market, where they could increase profits.

Dale Foster is the president of Promark Technology, a 30-person company with $16 million in gross sales last year. The company is located in Laurel, MD and deals primarily with imaging VARs. Fred Miller is senior marketing manager of network printers for Okidata, located in Mount Laurel, NJ. Okidata has over 6,000 employees worldwide.

Printers Are Popular, Easier To Sell
Both executives agree that, due to customer demand, printers are increasingly popular. Customers are increasingly astute about what printers can do and are demanding changes to meet the customers' own requirements. Speeds, for example, are increasing for both color and monochrome printers. With the growing popularity of document imaging, some printers are printing the file formats, such as TIF, which imaging people work with. And with the increasing prices for paper, some customers are demanding duplexing, or printing on both sides of a sheet. Finally, in some cases, the prices of printers are coming down. In most other cases, printer prices remain the same, but include improved capabilities and more features. So the opportunities for VARs to sell printers are certainly out there. The question is, "How can VARs maximize their profit potential when selling printers?"

The Answer: "Concentrate On After-Market Service Contracts And Consumables."
Both Foster and Miller stress the importance of VARs' offering additional services after the sale. Both agree that many VARs virtually ignore the after-service market. Miller suggests that VARs customize their document management applications to include appropriate printers. He also urges VARs to include printers in after-market service contracts.

Foster agrees, commenting that the consumables, such as paper and toner, used by higher speed printers can translate into steady income. Miller mentions that printer engines are now very reliable, but that changes are occurring regularly in printer software. Alert VARs can capitalize on selling software updates, as well.

More Changes Anticipated In Future
Promark's Foster predicts a new breed of mid-range, high-speed, (30 to 90 pages-per-minute), printers will soon enter the market. These will replace printers on each individual's desk. He believes the most common application of the new printers will be as network cluster printers.

In cluster printing, each department (e.g. accounting or sales) has its own printer and everyone on the departmental network uses that printer. The printing cost per page will be less than half the current cost, using these new printers. Okidata's Miller predicts that, in addition to software changes, printer hardware will offer better connectivity, so that managers can monitor printers from their own desktops.