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I've noticed an increasing number of Ricoh's public sector contracts have shifted to a "Committed Both" CPC structure for office color MFPs, requiring a volume commitment for both monochrome and color prints within the same plan.

I am familiar with this structure, but I wanted to confirm the CPC methodology since this may result in significantly inflated committed per-click costs depending on how CPCs are calculated.

For example, I just saw the 28-ppm Aficio MP 2800 in a contract with a $138 monthly maintenance fee, a 3,500-page BW monthly allowance, and a 1,500-page monthly color allowance.

If you divide each of these volumes from the monthly base, like you would in a single-volume committed plan, you would get a BW CPC of $0.0394 and a CLR CPC of $0.092 (both very high). The overage CPCs make much more sense at $0.0111 for BW and $0.066 for CLR.

That said, if a customer printed the exact BW and color volumes that are allowed in this plan, the value of the clicks would be double the monthly charge ($0.0394 x 3,500) + ($0.092 x 1,500=$138)=$276.

Does anyone know if there is a methodology involved when presenting this pricing structure so that the committed CPCs are justifiable compared to standard plans?

Has anyone else noticed that these types of contracts are being pushed more often? If so, why do you think they are?

thanks
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quote:
Originally posted by Art Post:
are you stating they are charging $138 for comitted color and $138 for committed black?

If so, I've never seen anything like this, the numbers make sense if the base charge is for color and black.


They are charging a single monthly fee ($138), but setting two monthly volume commitments. One for BW (3.5k) and one for color (1.5k). I guess from what you are saying, this is not abnormal...

Do you have an opinion on why this structure is becoming more common. Its now the only option for many of Ricoh's color MFP models on GSA and WSCA. But I'm having a hard time coming up with accurate way to divide the committed volumes by the monthly base fee to come up with accurate committed CPCs.

$0.0394 for BW and $0.092 for CLR don't really make alot of sense for this or any 28-ppm A3 model.
I know alot of dealers and branches that will make you commit to a minimum black volume and a minimum color volume. So will get the meter monthly and other quarterly. Monthly reads would make the dealer or branch more profit if the customer DID NOT hit mimimum volumes, the quarterly read is better since meters are read only once per quarter, thus giving the customer more time to met the minimums.

This shift started awhile ago, and is very nice profit when customer DO NOT hit the monthly or quarterly minimums.

The overages are the committed cpc here:

quote:
They are charging a single monthly fee ($138), but setting two monthly volume commitments.


Black @ 3,500 x.0111 = $38.50. Color 1,500 x .066 (very low) = #99.00. $99. + $38.50 = $137.50 per month.

Am I missing something?
We do this all the time. 3500 B/w @ .011= $38.50 and 1500 Color @ $.066=$99 w/a Total count of $137.50...

By doing this you lock the customer in with you for a lease when the lease comes up for the next term the competitor has to buyout the maintenance portion as well.

As you all know.... This goes on all the time.

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