I didn't get the order but.....

I have two questions here:

a. Are the rates you mention really so low it'd make the deal unprofitable for you? I'm based in Europe so don't know your cost differences, but here, although these rates will not be quoted for single unit sales, they have become quite typical for mid-range and larger deals in the last few years.

b. Even if the price increase is not clarified in the contract, would a dealership actually be able to increase pricing by however much they like without losing the customer? Here the max allowed price increase is in line with the price index, otherwise the customer can just cancel the contract without penalty. And even though this kind of price increase is allowed it is not at all common.

Just curious what the differences are on your side of the Atlantic.

@NickE  thanx for the reply.  I'm not a dealer owner but in sales and can only go so low on cost per page.  Thus not being a dealer owner I don't know who much margin those prices would return.  What I did figure out was the cost of the A3 color 50ppm kyocera to the client was a little more than $5K US.  My sales cost is much higher and I could never sell that low for a one-off.

In reference to the escalation agreement, yes there could be fear that you would lose the client with the escalation.  However the thought in the past is that there are always enough clients to go around in the past, thus there was no dear of losing a one-off from managements view.  Of course the sales person is concerned for all of the clients. The mentality of there is enough for everyone will not survive the post pandemic market place.

In NJ and from what I know there is no law that dictates our percentage of increase.  Thus it's more like the wild wild west and dealerships can low-ball the first year and drop higher escalations with subsequent years.

On an A3 Kyocera I would bet that the dealer's break even is $0.02 per page blended across all pages could be slightly lower as I'm looking at a different manufacturer.  Basically if the dealer is getting a high percentage of color clicks at $0.0387 they will still make money.  Not making good money but not losing.   That's the easiest way to explain it without diving into the math or having more details about the customer's usage.  You can bet they are not defaulting computers to print in B/W.

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