Three dealers detail how Supplies Network has helped them expand their MPS footprint and improve margins.
As dealers offering managed print services (MPS) know, managing supplies is a key component to a successful relationship with customers. While many dealers opt to keep this operation in house, others are partnering with firms such as Supplies Network to streamline the process, make it more efficient, and improve margins. Supplies Network is a leading U.S. wholesale distributor that offers more than 8,000 products””including a comprehensive line of A3/A4 equipment and a comprehensive line of copier and printer supplies””to its reseller partners.
We spoke with three dealerships””Genesis Technologies, Edwards Business Systems, and RJ Young””about their relationships with Supplies Network to get a better sense of how these partnerships work. Each dealer is contracting Supplies Network to do the operational heavy lifting for their organizations, helping them refine their MPS strategies.
Genesis Technologies (Northeast Illinois)
For eight years Genesis Technologies, based in northeast Illinois, has worked closely with Supplies Network to develop its MPS capabilities.
“We can count on consistent, constant execution from them,” said Jon Kaiser, vice president of finance and operations for Genesis, which initially offered strictly A4 devices on a regional basis when the company launched in 1991. Today, Genesis offers its services to more than 200 customers, managing several thousand A4 devices. Eight years ago, Genesis added A3 devices to its product line. Hardware suppliers include Brother, Canon, HP, Kyocera, and Xerox. While most of the firm’s sales are in the Chicago area, approximately 20% of its business extends nationally, including approximately 10% in the greater Dallas area.
When it comes to managing print consumables and supplies, Kaiser says there are two age-old questions: Do you make or do you buy, and how much do you want do in-house?
“Our old model was an initial pain point,” said Kaiser. “We used to order toner and [other] supplies, which were driven to us in our private-label boxes.”
Unsatisfied with this cumbersome strategy, Genesis looked to go stockless and turned to Supplies Network to handle distribution.
“With the touchless model, the machine tells us when it needs stock,” said Kaiser. “We see it on the MPM [Supplies Network’s MyPrinterManager] portal in real time.”
MyPrinterManager, the online portal and mobile app developed by Supplies, provides dealers and their end-users assessments of printing environments and devices. The MPM portal allows dealers to view information at the device level about supply status, next expected shipment, and tracking of shipments, among other functionalities. Dealers can also launch and follow the status of break/fix service tickets.
“It helps give the customer comfort,” said Kaiser. “They can see if a device needs toner or not. It helps to take away the discussion of them “˜wanting’ more or “˜needing’ reserve supply stock. When we say, let the device tell us when it needs toner, it helps to have the ability to see that, to help overcome fears of running out.”
Last year, Kaiser estimates 75% of Genesis’ business was based on a cost-per-print pricing model, which the dealer implemented around 2005. Prior to that, customers were simply purchasing toner cartridges and other consumables whenever they thought they needed them. It was an inexact science with multiple people ordering supplies, which can result in over-shipping.
“Shipping too many supplies is not cost-effective and can get expensive,” Kaiser said, especially with the growing demand for color toner. The costs of over-shipment became apparent as some Genesis margins slipped away from historic numbers.
“Most [devices] are in the threshold of margins, but some got out of hand,” Kaiser reported. “We were shipping more supplies in terms of cost than we were bringing in revenue. Some [customers] were at half of intended margin.” Other accounts degraded further and had gone negative.”
When Genesis brought in Supplies Network and its MPM portal, Kaiser handed over Genesis’ 10 customers with the worst margins. With the help of Supplies Network, said Kaiser, margins for these customers began to rebound.
“Supplies Network has been spot-on with their days-till-empty concept,” he commented.
For its data collection agent, Genesis turned to partner with an outside source as well. Genesis uses ECi Solutions’ FM Audit, which is loaded on a customer’s network (usually a print server) that reports on all network devices, including printers and copiers, and machine information such as serial number, IP, MAC (media access control) address, model, and page counts.
“It’s all about having control,” said Kaiser. “We kept the front end and back end, and Supplies Network does everything in between. We use our FM Audit license to load a DCA software tool on the customer’s network rather than outsourcing that to Supplies Network as part of their service.”
With Supplies Network’s à la carte program, Genesis controls the DCA but points the information to Supplies, which, in turn, uses its proprietary software and algorithms to predict the days-till-empty estimate for when to ship toner.
That linked data is sent automatically to Genesis’ back-end software, ECi’s E-Automate, with no rekeying required.
“We then send, via E-Automate’s PO processor, an automated purchase order and get back an automated voucher, which again eliminates the rekeying of information,” explained Kaiser.
The fact that one person can handle alerts and key in orders is a notable value-added benefit for Genesis, or any dealer.
“Several of our people don’t need to learn the system, which means when the entry person calls in sick or goes on vacation, it’s not a major issue for us,” said Kaiser.
Next, Supplies Network ships the toner with its bright yellow SRL (supply routing label), including device and location information, on each cartridge to ensure it is delivered to the correct intended device.”¯Because Genesis handles the service calls on the device, it owns the initial step and the service, but the middle responsibilities belong to Supplies Network.
With its proprietary technology, Supplies Network can help dealers to streamline remote meter collection and billing, supply reorder processing, service deployment, purchasing, and managed print services assessment and proposals. Supplies Network has established web-service connections with all the major data collection tools, including PrintFleet, FMAudit, Print Audit, Print Tracker, NDD Print, Netaphor, and XDA. Supplies Network also hosts PrintFleet and FM Audit for partners who don’t have their own data-collection tools.
“Partners can share data with us on the accounts where they would like to use our program,” said Custer.
For Kaiser, Genesis’ MPS economics are better with Supplies Network in the equation.
“SN helps us be more efficient,” said Kaiser. “It’s true that margins have improved over the years, and extended yields play into profitability, too. There’s more capacity per cartridge because they’re not getting pulled prematurely.”
Edwards Business Systems (Pennsylvania & Virginia)
Based in Pennsylvania and Virginia, Edwards Business Systems had been bound to a local footprint before partnering with Supplies Network.
“We didn’t have the technicians or resources to go outside of Pennsylvania and Virginia,” said Nicole Behn, director of managed services and solutions at Edwards Business Systems, which sells Konica Minolta, Lexmark, and Xerox products. However, when the joined forces with Supplies Network in 2009, its network began expanding to a national level. Today, the dealership taps Supplies Network to handle supplies for approximately 400 MFPs and twice as many printers.
“It’s their overall business knowledge,” said Behn about working with Supplies Network. “The entire program is a truly comprehensive offering, and they work with us on our go-to-market strategies.”
Beyond Supplies Network’s turnkey offerings for consumables such as toner and HP-authorized parts, Behn also appreciates its diagnostic and analytic capabilities, including Supplies Network’s MPM portal that delivers a snapshot of Edwards’ overall fleet “health,” including supply ratios.
“Having access to this information allows us to be more inclusive and run our business and output more efficiently,” stated Behn. “It tells us things like our top 10 over- or under-performing pieces of equipment and which are the most environmentally friendly.”
While profitability is a primary benefit of Edwards’ relationship with Supplies Network, improved customer access is another.
“It’s more about gaining access to places we could not traditionally penetrate,” Behn explained. “For example, Edwards now approaches prospects with office-technology contracts whose leases aren’t up for another three to five years, allowing our sales reps to walk in and participate with a different offering, growing horizontally within an account.”
According to Behn, Edwards’ office technology segment now represents about 25% of the firm’s business, up from 10% in previous years.
“The industry still views single-function laser printers separately from workgroup MFDs, copiers, and other office technology [products],” said Behn, who sees an opportunity to educate prospects. “Printers are not on people’s radars of fixed costs.”
Unmanaged costs are dangerous for business, of course, yet Behn estimates as many as 20% of its prospects do not have a managed-print contract or plan.
“That’s a lowball percentage,” Behn asserted. “Many simply do not know. They don’t manage their print volumes.”
Behn said it’s also safe to assume these same prospects also don’t ask when it’s best to print to a single-function laser device versus a multifunction device. From Behn’s perspective, this is where Supplies Network comes in, by pointing out volume and where it can be shifted for reproduction.
RJ Young (Nashville, Tennessee)
RJ Young, with operations in the southeastern U.S., has partnered with Supplies Network for eight years. The company has 2,199 devices under some sort of services, and offers products from several vendors, including Canon, HP, Lexmark, Mimaki, Océ, and Ricoh. Like Edwards, Supplies Network enables RJ Young to serve customers outside its regional footprint.
“We can’t service them directly,” said Stephen McKim, MPS manager at RJ Young, which previously relied on other local dealers to provide that service. “With Supplies Network, we are able to get accounts we typically were not able to get, but everything customer-facing is still all us.”
For RJ Young, contracting with Supplies Network is more beneficial than housing toner inventory. Over the past 12 to 18 months, the dealer has deployed Supplies Network and its low-toner notifications on
some larger-fleet accounts, which has alleviated RJ Young from being the “middle man.” Auto-fill, as opposed to drop-ship service, has reduced waste as well since cartridges are no longer being disposed of with toner still in them.
In the past, toner replenishment had been left up to customers.
“Cartridges tend to stack up,” noted McKim. “I think it’s a comfort thing, keep an extra on hand, have one in your drawer. Supplies Network removes the gut feeling of the end-user just to order at will. Customers don’t have to call and order with auto-fulfill. This has alleviated a stress point for the internal RJ Young team because we don’t have to manage so many SKUs of toner.”
Reducing costs has been another benefit.
“The IT guys realized that they were spending more money than they needed to,” McKim noted. “It was a win-win for all sides. Our expenses have gone down as a result of our partnership.”
At the beginning of 2019, RJ Young tapped Supplies Network to service some of its mega accounts with large printer fleets, including a hospital with approximately 1,200 devices and a home-decorating retail chain with more than 40 stores.
“We tested SN hard out of the gate this year,” said McKim, who is more than satisfied with the results. “It was a physically grueling process for everyone involved. We’ve pulled the reports, and profit margins are trending in the right direction.”
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