I always enjoy answering e-mails and today I was able to send this reply to a Print4Pay Hotel Member that asked me these questions:
A friend of mine and myself are potentially looking to partner together to start an unauthorized copier dealership. We want to tap into the niche market of customers who prefer reliable, refurbished equipment for the cost savings. Do you have any advice for us in terms of what we need, challenges we’ll face, and anything else you can offer? How does leasing the equipment through a 3rd party leasing company work?
My response:
I could probably write for a few days about the pitfalls of selling used and or refurbished equipment without technical support from a manufacturer.
I had an authorized dealership for Adler Royal, Towa, and Copystar, and we were able to get support from the manufacturer when we couldn’t figure something out. What was the imaging industry then and what is the imaging industry now offers many opportunities for the enterprising entrepreneur.
The Web has changed the way we do business, and looking back the only resource we had for support was from the manufacturers in the middle 80’s. If you have the time to do the research who can get almost anything you want at Alice’s Restaurant (the Internet). I would suppose that if you wanted to start a copier business without being “authorized” you would have an easier go of it now than 30 years ago.
What I can tell you is that guys like me relish hearing that the competitor that we are selling against is not “Authorized” and is selling used, off lease or refurbished equipment. That, my friend, can put you on the defense early and often.
I’ll admit there is a niche market for used, off lease and refurbished, however, my pitch line to customers that may be considering used, off lease and or refurbished is “you can never second guess your purchase if you purchased a new system and you will always second guess your investment if the used, off lease or refurbished equipment does not perform properly.
If I was thinking of going out on my own and I wanted to capture that used, off lease and refurbished market, I would at least partner (get authorized) from one manufacturer that would not tie you down with a quarterly or yearly quota for hardware. Doing this would enable me to back pedal to new hardware if needed and would also enable me to get support from that manufacturer for their hardware.
Let’s take someone like Muratec; they have various imaging systems from various manufacturers that they have relabeled with their brand name. I believe their A3 lineup is OEM’d by Konica Minolta and has been for a few years ( I could be wrong, and is suggest you do your own investigation here). You could then concentrate on buying those used, off lease and refurbished systems that you would be able to get support on. Doing something like this would probably make you sleep better at night and also give you the opportunity to sell new and used.
Existing dealers are diversifying because clicks are eroding, and I don’t think anyone starting a copier business now can be successful with just selling used, off lease of refurbished copiers. Ask yourself, would you open up an ice cream store and just sell vanilla ice cream?
Don’t get me wrong I’m not telling you NOT TO DO IT, I’m telling you TO DO IT, but do it in a way that makes good business sense to acquire as many accounts as possible. Those existing accounts will be your goldmine. After the sale you can then go back to them and sell them additional services because they trust you.
You also need to partner with a leasing company that will provide the financing options you are looking for. Keep in mind that most leasing companies will not offer FMV (Fair Market Value) with used, off lease or refurbished imaging equipment. You’ll also want to read all of the T&C’s of the lease contract and see if you can amend them to meet your needs for some of the end of lease clauses. I always recommend Lease Corporation of America since they are a valued partner here with the Print4Pay Hotel.
One other item, I know how good you are, don’t limit yourself to just copiers.
Hope this helps.
