I’ve never considered myself a poetry buff, but I recently came upon a collection of
that were both understandable and stirring. This is more than I can say for most of the poems that were forced upon me back in school and given the recent emergence of the 140-character Twitter age, the six-word poem may enjoy a brighter mainstream future.
Although many of these poems are far too tragic and off-topic to make it onto the gap intelligence blog, I thought I would sum up a recent trend in the Copier-MFP space with my own attempt at a six-word poem.
“For Sale: barely used copiers, cheap”
During my daily correspondences with current or prospective members of the Gap Intelligence Dealer Partnership Program one major trend is becoming very clear. Now is as good a time as any to be in the used and refurbished copier business. Although well-connected dealers are still successfully selling respectable volumes of new systems, dealers’ response to the standard “how’s business” small talk commonly involves the strength of their refurbished MFP sales.
The recent growth of the refurbished copier market can be explained by basic supply and demand economic principals. In addition to the natural lease expirations that traditionally provided dealers with a stream of used models, loan defaults, company downsizing, and ongoing bankruptcies have helped to create a near-oversupply of lightly-used and low-cost copiers. Meanwhile, the “new frugality” and “eco-sustainability” ideals that have taken hold of the US consumer and corporate psyche has generated increased demand for refurbished systems from an even wider user base.
By many our of dealer partners’ accounts, the used systems that they receive have never been of higher quality or less expensive, while the demand for refurbished systems (vs. demand for new systems) has never been stronger.
Although dealers still have to push new systems to maintain their authorized status, many see little reason to resist this trend if their prospective clients are deterred by up-front costs and do not require next-generation technology. A dealer can acquire a lightly used Segment 2 monochrome system through an auction or wholesaler for roughly $1,000, refurbish it in house for under $300, and sell the same model for a gross margin that often surpasses 60 percent. On top of that, refurbished systems generally carry 20 to 40 percent higher maintenance and service costs than new models and often end up generating the same net revenue as a similarly-equipped new system after four years of use.
This is the Global Imaging sales and service business model on steroids! Used systems provide these dealers with low-priced differentiation from their extremely aggressive direct branch competitors, while guaranteeing a very respectable (and high margin) post sale revenue stream.
Although Canon and Oce have both expanded their roles within the refurbished markets, the increased relevance and improved status of refurbished copiers should be seen as very real a threat to sales of all vendor’s new models. Manufacturers can find solace in the belief that the eventual economic upturn will have a reverse effect on these same supply and demand factors.
However, below are a collection of six-word poems to consider in the mean time:
“Manufacturers should adjust production capacity accordingly”
“Make generational upgrades a must-have”
“Incentivize dealers to sell new systems”
“Follow Canon and Oce’s refurb lead”
