Lower Costs, Higher Revenues Make Auto-Replenishment a Win for Customers and Resellers

Auto-replenishment of printer supplies is one of those true win-win situations for both reseller and customer. On the consumer side, Amazon and HP have popularized the idea with their Dash and SureSupply Auto-Delivery services, respectively. For B2B, Dell began offering its Dell Toner Monitoring service in 2013, and last year Xerox announced its Enhanced Managed Supplies Service. If you are not offering auto-replenishment services already, then here’s why you should consider it.

The customer “wins” are convenience, lower costs, and predictability. Done correctly, auto-replenishment services monitor usage and anticipate when to ship new supplies based on usage history. The supplies arrive labeled for the machine needing replenishment. All the customer needs to do is unwrap the package and install the supplies.

Amazon Dash button for Tide Detergent

Cost benefits are tied directly to predictability. The more accurate an estimate of consumption, the easier it is to budget consumables and avoid overstocking. Customer savings also come from eliminating work stoppages and associated support overhead due to supplies running out.

Predictability also brings piece of mind to management and the in-house support staff–one less detail to worry about. Knowing your consumption rates also allows the customer to better anticipate the effect of large, out-of-the-ordinary jobs and make one-time adjustments to the auto-replenishment program.

Perhaps the biggest reseller win is a bigger, more predictable margin on a renewable revenue stream. Photizo Group estimates that channel partners can average a 25 percent margin on managed ink and supplies revenue. What drives that margin is the added value delivered to the customer and cost savings that naturally fall out of the auto-replenishment process.

When a customer runs out of supplies with no replacement, it’s disruptive for them and the supplier. And disruption is always costly for both parties. Eliminating supply outages reduces overhead associated with the supplies contract. Just as important, the predictability of auto-replenishment allows suppliers time to source products at the best price. Inventory can more easily be maintained at an ideal level.

Another benefit: Auto-replenishment can widen the market for managed services. Smaller companies–those with, say, 30 or fewer devices–often don’t see value in MPS. The value of auto-replenishment is much more clear and easier to sell.

Auto-replenishment will require an investment on the part of the supplier in terms of software and possibly support staff. These services are typically web-based and require a user interface or app at the client side and the management tool on the supplier side. Depending on the scale of services provided, a reseller might want to develop its own software or purchase off-the-shelf. Supporting the software might also require networking expertise on staff if it’s not already in place.

That might be a worthwhile investment when you consider the headaches that manual replenishment creates for both supplier and customer. For resellers, that investment could become necessary as competitors add and improve auto-replenishment services.