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Hey gents,

 

Pricing has been getting more and more competitive this year. Do you have a GP guide that you follow for each segment? I'm currently putting together an updated GP guide and could use your input filling in the blanks.

 

Commercial Target GP

A4 Devices: _____

A3 Devices (21 - 40ppm): _____

A3 Devices (45 - 65ppm): _____

Refurbished Models: _____

Software: _____

 

Major Account Target GP (3+ MFP's or Government/Education)

A4 Devices: _____

A3 Devices (21 - 40ppm): _____

A3 Devices (45 - 65ppm): _____

Refurbished Models: _____

Software: _____

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Czech, I got nothing for you, well, may have something.  Every opportunity is different, all depends on the time of the month, we're I'm at with revenue for the quarter or the month, if I can hold MSRP with a certain account.

 

I taken the position (Commercial), that all my A4 devices will be priced at MSRP.  A3 devices 21-40ppm would be 1,500 to 2,500, and 3,500 or more on everything else.  Just a guide line that I try and follow.

 

I'm not in the Major account business, maybe some other P4P'ers can chime in?


Art

Across the board, I probably average 12-15% margin above whatever markup management puts in before my "Sales Cost" is published.  For printers & desktop A4 devices, I just want to get a bunch of them in the field running pages & making money, so I sell most of them at my Sales Cost.  That recurring revenue stream & volume in numbers is more valuable than making a few extra dollars on the hardware.  

 

On larger A4 MFPs, I'll typically have a 20-25% margin, because I typically propose them as a less-expensive alternative to A3 devices.  On A3 devices, that's all over the map.  Existing customers, I'll be in at 10-25% margin depending on the account.  For new business, it's typically quite a bit below published cost (at least for Major Accounts with significant recurring revenue potential) & a max of 10% margin if I'm lucky in small accounts, because there are so many companies down here dropping their pants for every deal regardless of size.

The whore'ing of the machines is getting worse and worse. Eventually the stupid Japanese presidents of the brands are going to be sitting around in a room somewhere trying to figure out why this industry went to sh*t and what do they do to fix it. This win the business at any cost to keep the factory running has to stop at some point....I would think.

I know everyone is just ball-parking it here but these questions are really hard to get dependable answers for. Most sales reps do not know what the dealership markup is prior to establishing sales cost so a 20% markup might actually be 40% from cost. The other is the compensation package. If there is compensation based on clicks or a click incentive, GP becomes less important. My payplan changed this year from being GP based to being revenue based. Consequently, I just sold a 22 unit deal with no GP in it at all but the monthly, quarterly, and potential annual bonuses (as well as Ricoh points) makes the income on the deal worth it. My point is, one person's 20% may be totally different from another person's 20%.

Jason:

 

Take a look at the RBS quote that posted yesterday!  It states, their "best" price the first time.  In essence they are teaching their people to be just "order takers".  Even the Ricoh web site is no listing MSRP with lines drawn through the MSRP to indicate they are discounting. 

 

I have no problem with discounting, however there is no reason to put the MSRP on the site and then draw a line through it, the only reason that is done is to initiate a call to their in-line order taking department.

I heard it through the grapevine a while back that RBS (at least in DFW) is no longer sending field reps out unless opportunities are above a certain value, meaning they are handling the sales process via telephone and email from start to finish.  

 

I see this as being the way things will be done in the future.  From a business perspective, it makes sense if it allows dealers/direct to employ fewer sales people while generating close to the same revenue.  If there is no value in a transaction (solutions that solve business problems, unique points of differentiation, bringing simplicity to complex environments, etc.) there is no need for a salesperson.

 

I personally believe that in the future most transactions in our industry as part of a transactional business model (versus services such as MPS/MS) will be completed online the same way that the internet resellers such as CDW process transactions.  There will still be salespeople & account managers, but there will be far fewer of them which is a necessary evil as margins continue to slide & commoditization is perpetuated by lack of differentiation.

There are a lot more of those than there used to be.  That's why our industry has to change the way they add prospects to the pipeline.  They are going to have to actually start marketing for a change (spend dollars on marketing instead of salespeople) & do things to position themselves as a resource companies will contact when they need something versus salespeople throwing a million lines in the water hoping they get a bite. It's got to be all about generating in-bound leads and referrals.

 

It astonishes me that in major markets dealer principals rely on salespeople (typically with a low success/high turnover rate) to be the sole source of communication with their clients and potential clients.  There is often no company-supported marketing effort (whether via email, direct mail, radio/tv, billboards, etc.), so the only marketing is done in voicemails or emails to prospects that are increasingly more difficult to reach & less-receptive to salespeople.

tx I agree. Our owner, who happens to be my father, is  still trying to do things like its the 80's. We hold our own in a major market but we do not have the growth I want. It is tough to get him on board with anything new age as this is an industry he has made truck loads of money on doing it the same old way year after year.

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