Dr. David Cameron
It is no secret that color sales are driving the office equipment market and that the related service and supplies business is a bonanza for the industry and the channel. This was confirmed again last week in an impromptu discussion with a Canadian dealer about growing services revenue that was driven in part by a strong rise in color A4 MFP placements.
Another trend that is less discussed is the improving quality of remanufactured color cartridges (reman color) from leading vendors. Cameron Consulting Group (CCG) recently completed a five-month independent investigation that showed rising customer satisfaction and market acceptance for aftermarket color cartridges. The findings represented a significant breakthrough by the leading manufacturers in terms of improved quality, low cartridge return rates and positive sales outlook.
Cartridge return rates showed an improving trend converging on a one percent benchmark level, based on data reported by leading remanufacturers such as MSE, LMI, Katun, and InkCycle. This is a significant quality accomplishment that correlates well with increasing market acceptance found through an extensive market survey that was part of the study.
These trends taken together, i.e., rising color placements, improving reman color cartridge quality, and increasing market acceptance suggest a significant opportunity for mainstream dealers to boost their services line profitability. Reman color is viewed as a viable alternative to OEM supplies that also yields additional economic benefits (typically 2-3x margin improvement). Failure to act can be costly as more aggressive competition may move ahead and seize the advantage.
The recommended approach is to follow a balanced adoption strategy that builds confidence in the product as quality and manufacturing processes continue to mature. Nothing beats first-hand experience to understand adoption timing, application strong points and balanced usage as a viable alternative to OEM supplies.
The assessment of rising market acceptance and customer satisfaction with reman color quality and life was based on the findings of an extensive online survey with hundreds of inputs from independent dealers and resellers. Remanufacturer improvement in return rates was found though a series of non-sponsored onsite reviews of facilities, processes and technology. More information about the study findings and recommendations can be found at the CCG Website (www.ccg1.net).
About the Author: Dr. Cameron has more than 25 years of experience as an executive in the hardcopy industry. He specializes in helping OEMs, channel providers, software startups and other to create innovative business strategies that enable real growth based on a strong competitive position. He launched CCG to meet a market need for proprietary client advisory services, market research and executive consulting. His focus is on using market insight to grow business revenue and profitability by taking advantage in emerging opportunities and shifts in customer preferences. Examples of his current work include the 2012 Vendor Channel MPS Program Scorecard and the 2012 Color Reman Toner Readiness studies. Both can be accessed through his Website (www.ccg1.net). He can be reached at David.cameron@ccg1.net or (512) 638-1782.
