Exhibits 1.12-2.19
We ask dealers to rate their primary A3 MFP suppliers as “Excellent,” “Very Good,” “Good,” “Fair,” or “Poor.” Five points are then awarded for “Excellent,” four points for “Very Good,” three points for “Good,” two points for “Fair,” and one point for “Poor.” We then divide the total by the number of dealers participating from that manufacturer to determine the rating.
Two years ago, the overall ratings for the Big Six A3 OEMs plummeted to their lowest ever (4.0), which we attributed to fallout from the pandemic and supply chain issues. Despite lingering supply chain challenges in 2022, dealers were more forgiving of their OEMs’ challenges when rating them in the past two Surveys as the overall rating rose from 4.0 to 4.2 to 4.3 (Exhibit 2.18).
The OEMs with the highest ratings in this year’s Survey were Toshiba (4.6) and Sharp (4.5). Until this year, Sharp had been the highest-ranked OEM with ratings of 4.7 (2020), 4.5 (2021), 4.6 (2022), and 4.7 (2023), followed by Toshiba at 4.6 (2020), 4.5 (2021 and 2022), and 4.6 (2023). With Sharp declining from 4.7 to 4.5 and Toshiba holding steady at 4.6, Toshiba secured the highest rating in this year’s Survey. If there is anything consistent in our Survey, it is dealers’ favorable ratings for both companies.
Outside of Sharp, which still had a highly favorable rating, the other Big Six OEMs either received higher ratings than the previous year or remained the same. The two most notable year-over-year improvements were Konica Minolta (4.1 from 3.8) and Kyocera (4.3 from 4.0). We believe those higher ratings are significant. After receiving the lowest rating ever in the history of our Survey two years ago (3.0) because of supply chain issues, Konica Minolta has been on an upward trajectory. The supply chain issues have been alleviated, and dealers seem to have embraced the management changes over the past four years and the company’s current messaging.
Similarly, Kyocera dealers view their OEM more favorably after getting over the uncertainty around some of the personnel changes taking place at Kyocera and having more time to get to know CEO Oscar Sanchez and better understand his vision for the company. Ironically, despite seeing their ratings improve, Konica Minolta and Kyocera were the only OEMs to receive a “Poor” rating from their dealers.
For the past five years, we have presented comments shared by dealers representing each of the Big Six OEMs to explain their ratings. These dealer comments are enlightening, insightful, amusing, and often contradictory.
Canon
Excellent: “Excellent product and support from the manufacturer, customers willing to pay a premium, market leader.”
Excellent: “Canon is the best partner we’ve ever had. They do everything right and have an amazing product.”
Excellent: “Their hardware is second to none in quality, but Canon has to get back to supporting all dealers, not just the big ones. Their level of dealer support has dropped significantly.”
Very Good: “Support is very good, but there is a constant battle over pricing.”
Fair: “Canon has lost its ability to build relationships with the dealers.”
Konica Minolta
Excellent: “They are very supportive. If there is a problem, they don’t try to blame us. They jump in and help solve the problem. They offer excellent products, great sales training, and great service support.”
Excellent: “Reliable, acts like a partner, helps us win opportunities.”
Good: “Quality is not what it used to be. We service brand new Konica Minolta machines more than old ones.”
Fair: “Machines are good, but the current lineup is over four years old. Some things we’ve experienced lately make me feel like they are going downhill.”
Poor: “They still have inventory issues, even in a new release model. They have been playing games with toner numbers since COVID. They are not representing me with coverage. I haven’t had a manufacturer’s service rep assigned to my territory for over a year. They don’t reciprocate our loyalty of being a single-line dealer. I constantly find OEM supply items for less money from tier 1 distributors with little to zero freight. I save 10-20% most days.”
Kyocera
Excellent: “Extremely easy to do business with and great support.”
Excellent: “Kyocera is a reliable product with leading consumable life that pairs great with their warranty program and technical service.”
Very Good: “Kyocera is about 80% of our fleet. They are good except for constantly raising targets and lowering rebates, which makes rebates harder to hit.”
Good: “Too many quotas. Structure favors large dealers.”
Poor: “Kyocera has changed their model and is not dealer friendly. They continue to cut benefits to the dealers yet increase quotas and tie in ways to punish the dealer without rewarding dealers who are growing with them.”
Ricoh
Excellent: “Ricoh manufactures high-quality products. Their marketing support is excellent, and acquiring DocuWare has helped us move more software.”
Excellent: “Ricoh is easy to work with and dealer channel-centric in their approach. True partners and looking to invest in their dealers.”
Excellent: “Ricoh is an exceptional manufacturing and distribution organization.”
Very Good: “I did not give them an ‘Excellent’ score because they are not as price competitive as other brands.”
Fair: “Ricoh is not helping smaller dealers. It is too busy kissing the larger dealers to see those same dealers are abusing Ricoh.”
Sharp
Excellent: “Sharp is always looking for ways to help, and they keep us updated on what’s going on in the industry.”
Excellent: “Quality products and incredible leadership engagement.”
Excellent: “Sharp has gone above and beyond during these unprecedented times. They have overcome enormous challenges in our industry and keep coming out ahead.”
Very Good: “Sharp has a very solid, reliable product line.”
Good: “Great products and programs. Consistent communication is a struggle.”
Toshiba
Excellent: “Toshiba’s commitment to quality, both in manufacturing and in marketing, helps us feel confident in the products we represent.”
Excellent: “Great product and best people to partner with for growing your business. Great support from the top down to help grow your business and maintain profitability. Toshiba looks out for the dealer’s best interests like no other manufacturer.”
Excellent: “Toshiba is a true partnership. You can go straight to Larry White and he will make it happen. They are a great company.”
Good: “When they need something, they will call us; if we need something, we wait to hear back from them. There was a recent changeover in their field rep. They went five months without a representative, and there was very little communication from the vendor.”
Fair: “Lack of response and support.”
