MPS opinions on margins, business models. What say you?

I'm curious to know feedback from around the horn around MPS agreements. I'll throw this sample agreement on the table:

400 mixed devices (lets say 75% HP), spread across 50 locations within a 50 mile radius, producing 250,000 mono pages per month, 15,000 colour pages. You would be responsible for providing all labour, parts & consumables associated with the operation of all devices, software monitoring, & 48-hour to resolution SLA.

What would your cost to be, as a per page cost, to provide such service and at what rate would you present your solution to the client? Would 2 cents per mono page be a profitable deal? 3 cents? 3.5 cents? 15/16/17 cents per color page? How much margin would be enough to help you sleep with the variable risks associated with these contracts?

Generally speaking what are you folks seeing and charging per page for these deals out in the marketplace?

Not looking for your trade secrets just looking to understand how everyone else is looking at this business.

2/20/1411:32 AM

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fisherMaven VIP

The truth is you need to be $0.02++ but someone will go in and low ball it somewhere near $0.01just to get the business then give them sheety service and supplies.

2/27/144:54 PM

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David WhittenDocusultant P4P'er

There are a few factors that should be considered:

1. What is the mixture of printer models?

2. Are the devices currently being serviced properly?

3. What are current fill rates? (and does the business require MICR Toner?)

As part of our Go-To-Market strategy for MPS, we take into consideration HOW the volume is being produced and WHERE the volume is produced. Identify High Volume devices, aged devices, and even opportunities to leverage their existing technology by eliminating under used assets in favor of more efficient workgroup printers already deployed. Not only does this reduce cost immediately, it eliminates a footprint and everything associated with operating another device. Favoring the volume towards the lowest TCO printers will also help your profit margin and allow you to offer a more competitive rate.

If this fleet is currently 80%+ Networked, you may also consider a fleet management tool for meter collection and supplies replenishment. This is a tool that could be invaluable to your company in allocating your own resources with this account.

Good Luck

5/2/1412:42 PM

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