As dealers ponder whether a certain ancillary product offering is a good fit for their particular client and geography base, there are several obvious checklist items to consider. Cost to entry, degree of training required, the need for subject-matter experts and possible monthly recurring revenue opportunities are just a few.
There’s one interesting question to consider. How much of a role does market penetration/saturation play in your decision? If you were to offer furniture, for example, are there already several dealers within your markets that already sell it? There’s penetration, and then there’s saturation, and somewhere in between may be the catalyst to sell or not to sell.
Some dealers may scoff at the notion, believing they can go wider within existing accounts and add incremental profit, regardless of what the competition is doing. The industry’s top performers tend to dictate, not be dictated to, but a solid market assessment can provide intel as to how a dealer may want to approach a given geographic market.
Among the trend setters is Pacific Office Automation (POA) of Beaverton, Oregon. POA was an early adopter of electric vehicle (EV) chargers and accessories, an offering that isn’t in danger of becoming overly-saturated anytime soon. Still, vendors and manufacturers alike are jockeying for position, notes Scott Brenton, director of mailing, security cameras and EV charging stations services for POA.
“The competition is high with many devices being white-labeled and online offerings,” he said. “We have also seen consolidation in the market from manufacturer trying to grab market share through acquisition. Blink Charging’s acquisition of SemaConnect is an example. We are seeing opportunities from both current customers and net new opportunities.”
Crowded, Not Crowded
At the other end of the spectrum is VoIP phone systems. There are still ample opportunities to bring clients into the cloud phone era, and dealer newcomers to the offering such as Wisconsin Document Imaging (WDI) of Green Bay are finding fertile ground within existing accounts.
“VOIP phone systems have been around for quite some time and there is quite a bit of competition in the area,” notes WDI President Cory Spice. “However, for the most part we have stuck with our already present client base for this offering and are finding demand is there and increasing quickly as our team learns how to ask the right questions and uncover those opportunities. It’s very natural for clients that already rely on WDI for office equipment or managed IT needs to have trust in us offering a strong solution for their phone and communication needs.”
One dealer that has solidified its market standing for a diversification item is Offix of Gainesville, Virginia. President Stephen Valenta embarked on postal equipment eight years ago and that experience, bolstered by the acquisition of Frank Jones Mailing, has produced a sound offering led by a specialist. With a full-fledged mailing division and dedicated account reps soon to become a reality, Valenta is offering incentives for traditional copier reps who ferret out leads.
Net-new is always a goal, but there are ample opportunities within current accounts. “We’ve got some cool things in place; our marketing team is working on vertical campaigns exclusively for mailing and for print,” he said. “We want to get all of our reps calling and hitting each and every one of those customers.”
OEM Pushback
While Joe Blatchford has some heavy-hitter dealers in his back yard, the president of Image 2000 in Valencia, California, doesn’t see a great deal of competition for mailing equipment. The lack of significant MRR might explain it to a degree, but there are some markets where the manufacturers tend to be somewhat aggressive.
“A certain manufacturer has been pushing back in one of our markets, and they’re squeezing the profits out of these deals,” Blatchford noted. “That’s where some dealers will just say it’s not worth it to them to be in those competitive situations.”
While Blatchford feels it’s important to hit upon existing customers first, he suggests using the 2024 postal changes as a teaching tool in marketing campaigns. “Each month, we’ll vary our marketing with three or four different topics,” he said. “The meter change topic has received the highest response, because not everyone is aware of the regulations. It represents a great opportunity for us.”
