HP Just Launched Amplify—Is It a “Dear John” Letter to the Industry?
Recently HP announced a new marketing program called Amplify. It has some good benefits, but it also forces strict adherence to their requirements. The program got me to thinking, could an HP dealer transition away from this OEM? Should they?
One part I love about the new program is HP’s insistence that their partners have an e-commerce portal to purchase supplies and hardware. Of course I love it, I build e-commerce websites, and when an OEM says, “look, I can’t argue with you anymore channel, GET AN E-COMMERCE WEBSITE, ALREADY!” That’s great validation.
While this helps HP ensure fidelity, it is also a recognition that this is how people buy in 2020. It is table stakes to be in business today.
Arguing against this market reality makes you look like a luddite in the eyes of your employees and customers.
Where Amplify reaches is in its requirements to report on customers buying products. I’m not sure it is entirely legal, especially with GDPR regulations—let’s leave that for others to argue, but the market reality is that HP does sell directly. Not just to big organizations, but to pretty much anyone with a web browser. All OEMs do nowadays. It is not hard to see however, that if your business loses authorization in the future, your OEM partner now has all the data it needs to patriate the customer.
On top of all of this, the pricing of HP SKUs under “Big Deal” is a mess. There is no visible rhyme or reason to what pricing HP will give to what dealer and customer. They've created a pricing bingo game. As if that’s not bad enough, you need to track it and submit it to them regularly. With friends (partners) like these...
Going it alone—life without HP?
This is a bold step by HP, they are turning up the heat on partners. There is no way they would attempt this unless they felt they had the leverage. What else are you going to do, partner?
Well, let’s explore this.
From a business sense, Covid helps your case. Every business right now is being challenged to reduce costs. When it comes to office printing, that means printers and supplies. HP makes great printers and supplies, but their partners have plenty of options. Xerox, Lexmark and Epson are great options for the small office/home office market. Supply vendors like Clover, Xerox and NineStar have near complete product lines for supplies and parts. In almost all cases, the prices of these products are less than HP equivalents.
Less expensive alternatives THRIVE in times of economic hardship. It's not just our industry where this is the case: from food, to vacations, to clothing to technology, substituting out expensive products is already well underway. Is your business prepared for this? No? You should actually be proactive and prepare presentations of ways to reduce costs now.
HP is a great company, and they have been very good to our industry over the years, but this latest move is a head scratcher. It’s almost as if they have acted out a break up, before writing their “Dear John” letter.