enx magazine

It’s getting ugly out there. If you’re an independent office equipment dealer in a major market or even a secondary market, you don’t need us spelling it out to you here in black and white the impact direct competition has had on your business. Manufacturers are looking to protect their turf by expanding their reach and clawing for market share at all costs as they toss fiscal responsibility and ethical business behavior out the window. How else can you describe manufacturer’s sales reps quoting hardware prices well below dealer costs or quoting outrageous pricing even in circumstances where they have no competition for that business? That’s the harsh reality of today’s office equipment world.  

Field of Screams

Des Plaines Office Equipment (DPOE) in Elk Grove Village, Ill. is no stranger to competition from direct branches although most of those branches represent product lines that DPOE does not. For Chip Miceli, president and CEO of DPOE, it’s business as usual. “We’ve always had that issue because we have direct branches from Ricoh, Canon, Konica Minolta, Savin, and at one time, Lanier. We live with that here in Chicago.” 

Still, it does get hairy from time to time on the pricing front. “The end of the year is the worst because they’re all looking to make their numbers and they lower their CPCs down to 5 mils and they lower their machines down to where I don’t even know if they make any money on them,” says Miceli. 

Ray Belanger, president of Bay Copy, a Konica Minolta dealer in Rockland, Mass., is also in the middle of these price wars. “To Konica Minolta’s credit, they’re trying to clean that up,” he says. “I don’t think I’ve been affected by that recently, but going back a year, they had some definite holes in their pricing programs and when you ran into them, you saw some really ridiculous pricing.”  

He finds these pricing disparities create credibility problems for the dealer and the brand. “The problem isn’t just losing that account, which is bad enough, but you start to lose your credibility. So someone like us who has built a business over the past 35 years and represented Konica Minolta for 20+ years, if you have that going on widespread it really undermines all the good will you’ve developed with the brand over the years.” 

Andrew Ritschel, president of Electronic Office Systems, is smack dab in the middle of the Wild West environment that direct competition has created in Northern New Jersey. “Their branches are decimating us in the field. They come in 10-15 percent below our wholesale costs when selling to the end-user.”