Canon Business Systems Pulling a Ricoh

Heard from a friend who is a Canon dealer.  That dealer states CBS is dumping machines to his existing base and selling in most cases for 20% less than his cost!! 

 

Also went on to state that CBS and Canon Dealers have no "Rule of Engagement" like Ricoh Americas.

 

I used "Pulling a Ricoh" due to many years ago, Ricoh Direct was attacking dealer accounts with the same tactic that I heard Canon is using. Personally, I lost some of my biggest accounts in the course of two years. 

 

Ricoh now has a "Rules of Engagement", that dealers and direct need to abide by.  For that, I'm happy, however it doesn't bring back those accounts that I lost.

 

Keep in mind it was the Dealers that signed on with the likes of Canon, Ricoh, Sharp, Toshiba, Mita, Konica, and Minolta back in the late seventies and eighties, that built the channel.  Today, at least in my territory,  I have pressure from every manufacturer from the Direct Channel. Mind you, I'm not complaining, competition is good to a certain extent.

 

Are other Canon dealers seeing this from CBS?

 

-=Good Selling=-

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This has been a great thread so far!

We're a mid size dealer in central pa and have most of the directs knocking around in our area.  TABS, KMBS, RBS, CSA, Xerox and now Global just bought a small dealership.  In addition we have quite a few other Indy dealers like us.  I whole heartedly agree with what some one said before about selling the value of your company, service and the relationships.  I've also told customers point blank I cannot compete with the directs price so if that's all that matters good luck!  Service and relationships are big in our area so we sell the fact that you're able to talk to a human and receive accurate and prompt service for a fair cost. 

In the few cases one of the directs has targeted our customers, there has been such a huge price discrepancy that the customer is leery as to why they're price is that low and what else will suffer.  I always pitch the local card, that you're not calling Jersey or Canada or India to report a service/support call that all of our employees know where your located. 

Unlike some of the others it seems like CSA doesn't have an ROE but the divide between canon USA reps/support and CSA is bitter, like they're on rival teams. 

Someone mentioned about a second line.  In addition to Canon we also sell Samsung.  They've been a great compliment to each other and Samsung since the new gear has come out is excellent.  Canons a stalwart and has come out with some great color boxes recently in the lower end A3 and the A4 segment that have helped us win a lot more deals. 

Last I'll say this, in my 8 or so years doing this, I've attended a lot of different shows/industry events/meetings.  What I've come to understand is that it depends on your geography for how the direct/wholly owned subsidiary groups operate.  In some areas they may be the only game in town for a wide area and they have a good reputation.  While these types of area are in the minority I'm sure, wouldn't it be nice if the manufacturers dumped that money into their Indy channels and helped grow our businesses.

You all have a great weekend!
Yes Keith has a branch in our area but we don't run into them that much.

Yes we stuck it out with Ricoh for as long as we could. We really took a hard look at the dealer/manufacturer relationship when the ikon merger happened and we saw pricing in our area that was worse than we see now. What broke the camels back was when we asked for support from Ricoh to gain some of the canon accounts that we had engaged and Ricoh told us point blank to walk away from the deals because we would never win them against the direct office. We had always told all the brands calling on us that we only wanted a single line and always turned them down. That was pretty much when we started to diversify. Another reason was that sharp was, at the time, very strong in our market and had A4 machines before Ricoh did and we were getting slaughtered on deals selling A3 to the same customers so we picked up SAMSUNG.
All sounds good. Bumped into Keith Allison last week. Is he in your area?? Anyhow sounds like you guys are well diversified . Re the tough prospect !! Perhaps an offer of a back up used copier could counter Ricoh 30% lower cost ? Try almost anything to get prospect on your side. Then next year inc price?? Maybe?? Lol
Larry I am in NC. Have been doing this about 10 years. It's all I've done since college. I love the industry, for the most part, and really am at a point I couldn't afford to leave it behind. We are a family dealer so running the company has always been my goal so I've neve freaky wanted to leave either.

For the ones that are single source RFG, we use to be in the same boat. We added Samsung in 2009 so we have seen tej good and the really bad of SAMSUNG. We brought on Kyocera for a short time but dropped it due to quality of machines and lack of fulfillment of promises Kyocera made to us upon becoming a dealer. We added canon about 3 years ago now and that has been great. We picked up Lexmarks printers this year and we've sold more printers ytd than probably the last 5 years combined. Lastly we just picked up MURATEC. I'm extremely pleased with their line (Konica) and their support. It helps our rep lives about 5 mins from my office and he doesn't cover 30 states and 200 dealers like it seems most others do. He is one of the only reps I've see. Who will go
Out prospecting with our reps etc.
Sounds good. Years ago I was br. Mgr in loop for Savin.. Also had sharp/ Panasonic dealership nyc.. Business has changed but appears to be more lucrative nowadays . Kyocera may play out as good second line... Nice warranties for dealers.. Stay with it.. Where in Ill. Are you??
I would add a solid A4 lineup from Lexmark or Samsung.  They're aggressively priced, & Ricoh would likely still consider you a single source dealer. A3 placements are on the decline, & A4 is the only growing segment, plus the aftermarket revenues and profits are higher.
We're in Illinois. I have brought in my DSM/DBM and a Ricoh Solutions specialist when necessary didn't help in the last instance. When we see Xerox selling off the state contract they usually sell at below our US Communities cost. This is a broke ass state and price is often the only "value" they care about.Originally Posted by Larry Kirsch:
Price , as an objection has always been challenging. I use to spread difference over 5 yrs then load up on advantages which I could offer. Sometimes it worked sometimes it didn't. You seem to be seasoned at this.
If significant enough I brought DSM from Mfgr. That helped me get customers attn..
Usually mentioned to prospect longevity of rep from dealer vs. transition of direct contact if that helps. Let me know how you make out.. Again best wishes. What state are you in?

 

Just got off the phone with my DBM and OF COURSE Ricoh has one machine in the county system so I can't keep them out if the board wants to consolidate under one vendor. I'm thinking my days as a sole source RFG dealer are over. I could add Sharp, they call me every now and then but EVERYONE around here sells Sharp. Looked at Kyocera once but they wanted $65k buy in. Suggestions?

Price , as an objection has always been challenging. I use to spread difference over 5 yrs then load up on advantages which I could offer. Sometimes it worked sometimes it didn't. You seem to be seasoned at this.
If significant enough I brought DSM from Mfgr. That helped me get customers attn..
Usually mentioned to prospect longevity of rep from dealer vs. transition of direct contact if that helps. Let me know how you make out.. Again best wishes. What state are you in?
That's about all I can tell my reps is good luck. Your not going to beat the directs on price. If you can sell the value of a dealer/customer relationship that's the best bet. My post may have sounded a little Blount/direct towards you which wasn't intended. I just get fed up when I see my reps bring quotes back that we can't even touch without losing money.
It's difficult to sell dealer service and benefits when your pricing is 30% higher. That's a lot of value to add and if anyone thinks they can truly do that much value on a regular basis, I want them on my team.
I am dealing with this right now, my DBM is looking into it but I'm skeptical having lost two previous accounts to Ricoh Direct. One was a school district we had seven mfp's in Ricoh had one billable obsolete AF 650 so "technically" we weren't the incumbent.  Ricoh has a lot of ways to get around their rules.
 
Ricoh "says" the dealer cost is the same as direct but we see them sell at our cost all the time.
 
Originally Posted by txeagle24:

We've had issues with Ricoh finding (or try really hard to find) ways around Rules of Engagement.  One example I will use is a former customer I had that had all of their local Ricoh MFP placements with me but had a few old units from Xerox locally & several Ricoh units in a different market from RBS.  The customer was looking to upgrade a Ricoh machine that I had placed a few years earlier.  Ricoh went in and gave them pricing that was 25% lower than I could offer, & when we brought up ROE, we were told that ROE didn't apply, because RBS wasn't replacing my unit, they were replacing the Xerox & moving the Ricoh to where the Xerox used to be.  We were also told that it was a shared account due to the out-of-town placements, so it was fair game.

 

The other that we've seen is Ricoh going into an account in which we had the lion's share of the MIF (less a few owned competitive units), & Ricoh would go into the account claiming there was a Managed Network Services opportunity, even though they were in there trying to replace their MFP fleet.  As soon as they submit pricing, the damage is done.

 

I call complete bull **** on that. I am dealing with a customer right now whose quote from csa is 20% less than we can buy it for with all programs etc. the directs are blaming the dealers for running the industry into the ground? That's hilarious And I've heard that from Ricoh direct as well. Let's not forget who decided to bring out the A4 machines and drive the hardware revenues down to nothing and then start doing service at cost so the factory could continue to run. Those branches are going to close or be sold for pennies on the dollar and the Manufacturers will be pleading witht the dealers to keep them.

Originally Posted by Art Post: Whoa there Art....  I've been with Canon (CSA) for 20 years.  We have thousands of well satisfied customers.  Not everyone everywhere is going to be happy but, to the chagrin of our competitors, most are.  If they aren't, they will leave.  You know it and I know it.  We have ROE's that are rigidly enforced where I do business, we are not out to buy the business and the competition from Canon's own dealers often force prices to rock bottom margins. 
 
You've been at this a long time.  Me too.  I started right out of college in 1982.  When all of us take care of our customers, we tend to keep them.  When we don't, we tend to lose them.  We all know that.  There isn't anything anywhere where someone won't come along and paint something as identical, better, more economical, etc. and sell it cheaper...and it ends up being the same thing.  We all need to sell the value and attributes of our own company -- not the lack of attributes of someone else's organization. 
Originally Posted by TML:
CSA operates under a lawless abandon.  Their number one goal is to move boxes even at a loss.  While they didn't lose as much this past year, they still didn't turn a profit for CUSA (canon USA) and no one at the top seemed to care.  Having met some of the top tier dealers in the northeast, the sore in every single independent dealers side is canon solutions america / canon business solutions.

  We all know competition is out there, but to have to explain why us as a canon independent dealer is a better route than CSA to a customer gets a little sticky.  I had a 4 unit deal at a current 15 year old customer in 2014 where I wasn't marked up too heavy and I was around $49-50k.  The CSA rep came in, apples to apples, and was quoting them at $37k!?!!  I brought it to our CUSA representation and all they said to do was sell value.  Essentially we were handcuffed but sold the hell out of value and won the deal.

There's a place for the direct outfits, but it's not in america.  Let the boxes get sold through the independent dealers where value and relationships can be built and nurtured.

WOW, I can sell value with the best of them, but when the difference is $12k, well that's kind of tough. 

 

Hey, we all know their support and service is suspect and sometimes downright horrible.  But, how do you explain that to a customer that knows SH&T from Shiola?  Most if they have not done business with Direct perceive them as the best choice. I hate to sling mud...

 

Frankly in my experiences the vendor (oem) will try to obtain the business , then negotiate with the dealer if they are unsuccessful going direct. Sounds like the game plan they employ.. Suggest working those things out prior to channel conflict. Long range consequence tends to upset customer who then selects another manufacturer altogether. Best wishes to those who encounter these circumstances... Try settling before not after..

We've had issues with Ricoh finding (or try really hard to find) ways around Rules of Engagement.  One example I will use is a former customer I had that had all of their local Ricoh MFP placements with me but had a few old units from Xerox locally & several Ricoh units in a different market from RBS.  The customer was looking to upgrade a Ricoh machine that I had placed a few years earlier.  Ricoh went in and gave them pricing that was 25% lower than I could offer, & when we brought up ROE, we were told that ROE didn't apply, because RBS wasn't replacing my unit, they were replacing the Xerox & moving the Ricoh to where the Xerox used to be.  We were also told that it was a shared account due to the out-of-town placements, so it was fair game.

 

The other that we've seen is Ricoh going into an account in which we had the lion's share of the MIF (less a few owned competitive units), & Ricoh would go into the account claiming there was a Managed Network Services opportunity, even though they were in there trying to replace their MFP fleet.  As soon as they submit pricing, the damage is done.

Originally Posted by Christi:
Art,

Yes, Ricoh's ROE is serious business. If you're not seeing that in your territory, you need to contact their MVP, or even Mr. Brodigan himself, immediately. I've seen him take the matters into his hands personally. When you are moving half our gear a year, you hold more cards then you think. How Canon can afford not to is beyond me. I guess that's why we're seeing more Canon dealerships starting to carry our product.

 

I too have seen personally very high management within Ricoh deal with the local branch in our area in regards to this. There was one account of ours they wouldn't leave alone and our President, and several Ricoh management had a conference call with the sales rep and  the local branch manager and it was set in stone that the rep would be fired if he were to do anything in that account. We never had another issue with that customer being targeted by RBS

Art,

Yes, Ricoh's ROE is serious business. If you're not seeing that in your territory, you need to contact their MVP, or even Mr. Brodigan himself, immediately. I've seen him take the matters into his hands personally. When you are moving half our gear a year, you hold more cards then you think. How Canon can afford not to is beyond me. I guess that's why we're seeing more Canon dealerships starting to carry our product.

I was employeed by CBS (now CSA).  I moved my family back to the east coast after working for 6 years in the Portland OR area for CBS as a production print specialist.  Perhaps things have changed since I left CBS 2 years ago to come back to a Canon dealer... I was beaten and battered (related to my cost) when I was at CBS by all 5 local dealers.  I now manage a sales team for a Canon dealer.  We have never lost to CSA in the 3 years that I've in this position. In fact, I had a promo running for my team that simply found CSA/OCE serviced products in their territories. For those who are losing to CSA, are you using every available CSMP dollarwhere you can?  CUSA has a tremdous number of buying programs that dealers can take advantage of.  Please feel free to reach out to me. 

Originally Posted by TML:
CSA operates under a lawless abandon.  Their number one goal is to move boxes even at a loss.  While they didn't lose as much this past year, they still didn't turn a profit for CUSA (canon USA) and no one at the top seemed to care.  Having met some of the top tier dealers in the northeast, the sore in every single independent dealers side is canon solutions america / canon business solutions.

  We all know competition is out there, but to have to explain why us as a canon independent dealer is a better route than CSA to a customer gets a little sticky.  I had a 4 unit deal at a current 15 year old customer in 2014 where I wasn't marked up too heavy and I was around $49-50k.  The CSA rep came in, apples to apples, and was quoting them at $37k!?!!  I brought it to our CUSA representation and all they said to do was sell value.  Essentially we were handcuffed but sold the hell out of value and won the deal.

There's a place for the direct outfits, but it's not in america.  Let the boxes get sold through the independent dealers where value and relationships can be built and nurtured.

WOW, I can sell value with the best of them, but when the difference is $12k, well that's kind of tough. 

 

Hey, we all know their support and service is suspect and sometimes downright horrible.  But, how do you explain that to a customer that knows SH&T from Shiola?  Most if they have not done business with Direct perceive them as the best choice. I hate to sling mud...

CSA operates under a lawless abandon.  Their number one goal is to move boxes even at a loss.  While they didn't lose as much this past year, they still didn't turn a profit for CUSA (canon USA) and no one at the top seemed to care.  Having met some of the top tier dealers in the northeast, the sore in every single independent dealers side is canon solutions america / canon business solutions.

  We all know competition is out there, but to have to explain why us as a canon independent dealer is a better route than CSA to a customer gets a little sticky.  I had a 4 unit deal at a current 15 year old customer in 2014 where I wasn't marked up too heavy and I was around $49-50k.  The CSA rep came in, apples to apples, and was quoting them at $37k!?!!  I brought it to our CUSA representation and all they said to do was sell value.  Essentially we were handcuffed but sold the hell out of value and won the deal.

There's a place for the direct outfits, but it's not in america.  Let the boxes get sold through the independent dealers where value and relationships can be built and nurtured.
Had a deal recently that we were the incumbent and CSA came in and placed the exact same machine as we tried. Customer gave us the quote and our true cost was around 14,000 or 15,000 and they sold it to them around $9,000.00. Anytime CSA is in a deal there is a very small chance of winning. The only thing we have going for us is their service is very lousy so after the lost sale we usually pick up a service agreement at some point.

Ricoh has been good about enforcing the rules of engagement in our market but Canon has none that I am aware of. There have been several deals our DSM has had them walk away before any pricing was given and we were able to hold our margins.

I was just told the other day that CSA has to be and is, profitable now. Sounds like the same BS I hear all the time from Ricoh about RBS.

I personally think all these branches will be sold for pennies on the dollar at some point like in the past.
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