Jamie Luety
There’s a reputation to uphold when you’re considered the second largest print cartridge manufacturer in America, especially as you’re implementing a new business model. That’s the challenge facing RPT Toner today as it looks to make inroads in the dealer channel after successfully serving the wholesale channel since 2008.
For those not familiar with RPT Toner, the company is engineer owned and operated and has a reputation for being one of the first to market with HP color builds as well as niche products such as Lexmark, Dell, and Xerox. The company likes to refer to itself as “The Kings of Color” and recently extended its distribution to Southern California as part of its new business model.
Jamie Luety, vice president of sales & marketing for the Chicago-based company, is well aware of the challenge of implementing a new business model, having been in the office products industry since 2000, the toner business since 2003, and with RPT Toner since its inception seven years ago. Last week I spoke with him RPT Toner’s latest initiatives and how the company expects to make an impact in the dealer channel.
It’s been a busy year for RPT Toner, why don’t you tell us about it?
Luety: It has. I feel like we’re getting ready to throw a party. We’ve been busy preparing marketing materials, growing our sales team, increasing our distribution footprint. I feel that our industry is ready for a new brand, especially given all of the recent M&A activity.
Why the change in strategy?
Luety: RPT has had some wonderful opportunities since 2008 to help our wholesale partner’s build private label brand equity but we’ve never had the opportunity to produce an entire product range for our customers. Developing our own brand, the Reliance brand, allows RPT to pursue opportunities that we’re not previously available to us. It’s exciting.
That explains the new sales hires too, doesn’t it?
Luety: Absolutely. The majority of dealers in our industry have never heard of RPT Toner. As a company we have a pretty cool story and we’ve been fortunate to earn opportunities building product for some of the biggest names in the industry.
As you expand into the dealer channel, I understand you’re expanding distribution to better serve that channel?
Luety: We’re currently in the process of shipping inventory to a distribution center in Los Angeles which will have one- and two-day lead time for the majority of the West Coast. Obviously, being in Chicago we have a good reach throughout the Midwest and parts of the East Coast.
RPT Toner likes to say they’re “The Kings of Color,” so you have a lot banking on that segment of the market; what do you see as the biggest challenge of selling color toner from a reman perspective?
Luety: We do. I came up with the “Kings of Color” tagline while I was putting our marketing efforts together. I think we have a ways to go before we can officially claim the crown, but we are making progress all the time.
As far as the biggest challenge in selling color product today, it’s our collective past as an industry. It’s every angry customer and irate phone call a dealer has had to endure. You can literally see some dealers cringe when the conversation turns to selling color product. And I don’t blame them. A lot of promises have been made but the results haven’t always lived up to the pitch. Still, the color opportunity is real and I think perspective is always helpful.
The great thing about the folks in our industry is that they have been in this business for a long time; these people have long memories. Let’s look at remanufactured mono. Think about the mid-1990s, late-1990s, maybe even the early-1990s. Remanufactured mono was hot garbage. It was drill and fill and components weren’t replaced. In some cases components didn’t even exist! In time companies line Static and Mitsubishi began investing in technology and the science of print. The result was the availability of the components needed to build a quality product. Look at the monochrome cartridge market today. Remanufactured product is now about 40 percent of the total market vs. 60 percent to the OEM. Our industry overcame the mono quality problem with science and technology. If that approach was successful for mono, then the same is true for color. Remanufacturers didn’t solve the quality issue alone, we can only control the remanufacturing process. Collaboration between remanufacturers and the companies that engineer components, like Static Control, Mitsubishi, and Uninet are how we make remanufactured color product credible to the consumer.
Last year Static Control released Color Control components and to us that was a first true step towards the evolution of high-quality color print.
But you’ve still got some obstacles to overcome with the perception of reman color toner?
Luety: People are [still] afraid to try color. I’ve had people tell me they don’t want to risk their monochrome business by selling a new color product. It’s 2015. We need to be able to sell a color solution as an industry. Selling 78A’s for $6.23 is only going to get us so far.
How do you get around that fear of risking their monochrome business?
Luety: Again you talk about perspective; go back and remind the dealer what a long, tough road it was to get mono remanufactured product credible with the end user. I feel like we take that for granted as an industry because the quality for mono has become commonplace. You also have to be willing to discuss the advances made in color print at the component level. It’s not exactly a titillating conversation to have but we have to start with the investment in components. The investment is real and so is the opportunity to take color market share from the OEM’s.
So you don’t think price should be part of the discussion?
Luety: I talk about quality first and price last. From what we’re seeing, progressive dealers want to have the “quality” conversation. There are dealers growing their color business and they are the ones embracing the color opportunity. It’s a risk. I get it. The conversation about color print requires patience and requires time so dealers can be confident when they go to market. For a dealer to tell an end user a color product works because I say it works is a big thing. A lot of dealers have local or regional business models and we consider the importance of their individual reputations when we make these statements.
Are the challenges of remanufacturing toner cartridges the same as they’ve ever been or are you seeing new challenges?
Luety: I’m seeing more opportunities than challenges. The OEM’s are releasing a lot of tough, technical builds right now, and that is where our engineering skillset best serves the industry. Being first to market is sacrosanct for RPT. Think about it. RPT Toner started building product in 2008. I can’t really think of why the world needed another cartridge remanufacturer in 2008 other than to say that there was a void in product quality and product assortment and as a company RPT Toner provided some really innovative solutions for both challenges. In that regard the challenges remain the same but perhaps an empty broker, component manufacturer or dealer will see new and different challenges.
What’s your take on the monochrome reman business?
Luety: It certainly varies by OEM brand but it’s a tough place to compete in general. The price compression is just so severe across the entire channel. Manufacturer, wholesaler, dealer, it doesn’t matter. I often ask dealers what’s more important, what you can buy a cartridge for or what you can sell a cartridge for? The diminishing returns in selling mono reman are a great opportunity to lead the conversation back to color. A well trained sales team armed with good ideas and a product they are confident in creates enormous potential.
What trends are you keeping an eye on that could have an impact on your business?
Luety: We’re keeping a close eye on the programs the OEM’s have been introducing to the dealer community. The OEMs are obviously making a big effort to get closer to the end user and putting out some pretty sweet deals and opportunities for the dealer’s in exchange for that information. There are exciting, new technologies for extended yield cartridges being engineered for MPS providers too. We’ll be talking about that a lot in 2016.
What’s the one or two things someone who isn’t doing business with you or even someone who is would be surprised to hear about RPT toner?
Luety: I don’t know if anyone would find a particular attribute of our business surprising, per se. I will say that our people, and Shantu Patel (one of RPT’s owners) in particular, are very approachable and always willing to share technical information with our customers; especially the remanufacturers who outsource through RPT. We’re an open book and people find that refreshing.
Also, it’s easy to do business with RPT Toner. Our salespeople are empowered to make decisions and trained to be attentive to our reseller’s needs. It’s a fact that we’re all doing more with less these days; having questions answered quickly and accurately helps business owners and product managers keep their minds focused on growth, not wondering whether an order has shipped or if a new product is available.
What can we expect to see from RPT Toner in 2016?
Luety: Increased distribution, new relationships and a lot of first to market solutions for new OEM product releases.
