OEM Vendors like Microsoft and Adobe are Bypassing the Channel. Could Print Vendors Be Next?
My credit card statements tell the tale. Subscriptions. Microsoft, Google, HubSpot, Shopify, Zoom, Adobe, Amazon, Avast. All of these monthly payments are direct to the manufacturer. OEM vendors are eliminating the (middle man) channel. For years manufacturers have exchanged significant margin for the personal relationships channel resellers have. The supposed product expertise. The unbiased advice. More and more OEMs will go directly with business customers through subscriptions. Here's why.
Many of the examples I use here are the result of the value-added reseller channel losing the “value-added” part of their name. If a customer knows they need Microsoft or Adobe licenses, what value does the channel add to the transaction? A few other entities like Amazon and Google grew up in the internet age where its competitors, HP and Microsoft, already dominated the channel, so they just plowed ahead and made their own way. The results speak for themselves—they are trillion dollar companies today.
So, do office print resellers still add value? If they do, how?
Two things that offer less and less value are service and equipment finance. On the service side, we are quickly reaching the point that if your hardware needs constant service, maybe it's not built properly. The A4 revolution is not about paper size, it’s about “service-less printing”—many devices capable of printing 7-8,000 pages per month require zero service apart from replacing the supplies every few months.
In many cases, remote triage and then sending out a next business day replacement is better than a field technician with a 4-hour response time and a 60% “First Call Effectiveness Rate”.
If you are promoting your service response time in 2020, the question asked might be, how bad is your hardware? Two vendors that have begun to realize this are Brother and Epson. They don’t have national service, they simply warranty and replace hardware.
Equipment finance goes hand in hand with the service model. Ironically, many larger devices are engineered expecting technical failures that require on-site service. Those large devices are expensive, and resellers offer them on monthly payment programs. Monthly payment programs are great! My credit card statements attest to their appeal, but that’s the rub:
- Stop invoicing me and requesting I send you back a check.
- Stop giving me a monthly bill with 2-3 different CPP rates.
- Stop escalating my costs every year.
- Stop prescribing me hardware that’s far more than I need.
Where can you add value, then?
Start to build programs that leverage the internet for what it is—a tool to help businesses work smarter. Simplify your model:
- Package your print services in a new way.
- Let customers rent hardware from you that includes supplies, parts, and if needed, service.
- Help customers to get out from under burdensome contracts, even if you created them.
- Let them buy supplies and printers from you online.
Your business model is loaded down with sales and service departments that have massive costs. They are from a bygone era. You need to evolve your product offering. Speaking of evolution, here's a quote that's as valuable today as it was almost 200 years ago.