Christian Pepper, President
Channel Partner Division,
LD Products Inc.
When Christian Pepper came up with the idea of the GOLD LINE Challenge, the president of LD Products Channel Partner Division wasn’t looking for a gimmick to move new-build cartridges. He was seeking a forum on the question that has been debated, kicked around and, indeed, scoffed at by many industry observers, and that is the notion that new-build products can be manufactured to a standard that is superior in quality and less expensive than remanufactured cartridges.
The Challenge is a fun idea. For about five minutes of a visitor’s time, they can answer a set of five questions that are most commonly asked on the subject of new-build versus reman. At the end, the reader than can ask a question that still may be puzzling them, and the upshot is an entry for a cruise for two, a putter or driver from TaylorMade, and a Yeti cooler. The grand prize drawing will be held at the December BTA Capture the Magic event in Las Vegas.
But the true payoff, Pepper hopes, is dealers opening their eyes to the possibility of a new and better source of cartridges that he feels can last longer and be more rewarding to a dealer’s business, long after that golf club has snapped in half.
“The overarching goal of GOLD LINE Challenge is to say: you’ve heard about new-builds in the past, and they’ve been junk. Now there a premium, OEM-equivalent, quality new-build that you haven’t tried yet,” Pepper states. “It’s given the people who have come on board with us a quality standard that they’ve never seen before.”
Background
For years, the knock against new-build cartridges was their lack of quality. They were criticized as being low-yield alternatives that would be better suited for transactional environments, plus there were IP considerations/OEM compliance issues. But with the growth of MPS agreements, new-builds were inefficient for dealers who were selling by the page as opposed to the cartridge. Such a cartridge, Pepper notes, would destroy a dealer’s profitability calculations.
There has been a shift toward new-build, and Pepper notes the misfortunes of several popular reman providers bear that out. Several years ago, Pepper sat down with a number of engineers to learn why there was such a quality discrepancy between the two and found that it was the components, and not the shell, that spelled the difference. Though reman shells could leak if not rebuilt properly, it was their high-quality components that made them ideal in an MPS environment.
That started Pepper down the road of finding a vehicle for a new-build cartridge that didn’t use a recycled core and contained high-caliber components. He found a like-minded partner in LD Products CEO Aaron Leon, who he found to be entrepreneurial, had built a fast-growing and very successful business. LD Products also employs an automated pick-and-pack infrastructure for distribution, which would also reduce shipping mistakes. The genesis of developing Gold Line was May 2017, and LD Products began shipping cartridges this past January.
Cost Differentiator
The key to constructing a less expensive but greater quality product, according to Pepper, can be found in the numbers. For reman cartridges, Pepper notes that upwards of 30 to 40 percent of the production cost lies in the recycling process of cores: collecting, disassembling, cleaning, rejecting damaged units and reassembling. That is not a factor for new-build, providing more budget space to spend on quality components.
“Once we started testing the product and brought it over to the United States, that’s when we realized our product was 20 percent cheaper than the equivalent remanufactured cartridge because we didn’t have the costs associated with the recycling process,” Pepper said.
The Challenge
Pepper came up with the idea of the challenge to dispel some of the popular conceptions surrounding new-build versus remanufactured. In order to provide a non-partisan viewpoint to the questions, the answers have been validated by third-party organizations such as Actionable Intelligence and RT Media. They address (among other things) the trend in cartridge use, the question of quality and intellectual property issues.
On the third count, Pepper points out that much of the litigation to this point has been aimed at remans, and even if LD Products’ Gold Line was to be targeted by an OEM for a patent violation, his company provides written indemnification protecting dealers. LD Products itself is, in turn, backed up by its manufacturing partners, several of whom are giant public companies. One of the current suits being levied targets less than 10 SKUs out of roughly 2,500 on the market and LD Products already has a redesign that would address an unlikely verdict against this small core of SKUs.
Early Feedback
Challenge-takers who have responded with written questions are baffled by the thought that a new-build cartridge can be of higher quality and cheaper than the reman equivalent, according to Pepper. But he points out that with almost every recycled product on the market, such as paper, the price is more expensive than a new product due to the process and costs involved in recycling. And while an OEM can make a cartridge at a fraction of the cost of a remanufactured equivalent, the manufacturer needs to recover the costs necessary in bringing a copier/MFP to market. They must fund R&D and distribution channels, and still make a profit on supplies, Pepper adds. The new-build, meanwhile, has none of the aforementioned costs associated with either the OEM or the reman.
Conclusion
It is Pepper’s belief that the GOLD LINE Challenge is only the start of the conversation of new-build versus reman. He doesn’t want dealers to just take his word for it; he invites them to look at the data, do their own research, and ask any questions they may have about the findings. Dealers are also invited to try samples of the Gold Line, free of charge for as long as they need to reach a conclusion on its performance. Pepper can be reached at (866) 780-9385.
ENX Magazine does not endorse or represent any manufacturer, supplier, product or sourcing method. The magazine always welcomes opposing or ancillary viewpoints to the ideas expressed within ENX Magazine or its weekly e-newsletter, The Week in Imaging.
