Many years ago while I was on my way to sales call, I would travel south on Broad Street in Red Bank, New Jersey. Located on the northbound side was a copy center, and every day when I passed that shop, I eyed a purple neon sign that touted “Copies for 3 cents per page”. Geesh, I thought, how the heck can that shop make money at 3 cents per page?
Back then, I was a novice in the copier industry and fully didn’t understand the total cost per page. You know when you factor in the lease cost of the copier (if any) and then the cost of service and supplies? This particular shop was smoking with volume and I remember that volume to be somewhere between 200-300K per month. If we take 300,000 and multiply by .03 cents, the shop was generating $9,000 per month just selling copies. How much money did they make? Honestly, I have no clue, but I do know that this shop was in business for many years.
Recently, I did a review for a company that had a late model color system from another vendor. They did not have a contract for maintenance and supplies. Thus, anything and everything needed for the copier was time and materials.
I offered to do a cost analysis for that prospect, thinking that the maintenance/supply agreement would produce value. The prospect agreed and gave me all of the bills for maintenance, parts and supplies for the last three and a half years. The prospect averaged just about, 4,100 pages per month in color and 2,500 per month in black. The total of the invoices amounted to $5,800 or so. The monthly cost was about $141 per month. When I matched the prospect’s volume to the maintenance/supply agreement pricing I was stunned. The cost for all inclusive maintenance and supplies would cost them $143 more per month than what they were already spending!
All of this got me thinking, that maybe the time maybe right to charge the same cost per page for black and color pages. I would tend to think that this model could be popular and have many selling and accounting advantages. I’m thinking along the lines of 3 cents for color and for black. This would eliminate the complicated billing process of charging different prices for color and black. In addition, the invoicing to the end user would be simplified with one meter read and one cost per page charge.
Now, some may say, no one will pay 3 cents per page, and I would say, well who the heck wants to pay 7 or 8 cents a page for color? The additional profit on the black would offset the lower cost in color. Could this be a model for every customer? I doubt it, however, could it be a plan that could be offered for many customers? I think so.
We need to perpetuate the cost per page model, we want customers to use our systems to make prints, copies and fax. Would it be obscene to think we might see an increase in the amount of color and black pages if the model is adopted? Could we even adopt a model for two cents per page?
Plenty of things to think about.
Good selling!
