Independent Dealers Go Shopping
Over the years
we’ve heard plenty of dealers vent about the issues and
challenges of working with their manufacturers. Despite the
venting, many usually reach a détente of sorts with those
manufacturers and maintain the status quo. After all, the
grass isn’t always greener on the other side, unless you’re
looking to add a second or third product line.
What does it take to inspire a dealer to look for another
vendor or an additional product line and what kind of due
diligence should a dealer do before making a final decision?
We interviewed five dealers who have gone shopping for another
product line, to get their opinions on this issue. One
preferred to give their statements off the record, the rest
had no problem being quoted.
Rich is a Panasonic dealer who last year found himself in the
market for a new primary copier vendor. Anyone familiar with
Panasonic and the change in direction they’re making on the
office technology front can understand why Rich was looking.
It turns out Rich didn’t have to go searching all that hard;
manufacturers were seeking him out.
“As soon as Panasonic announced they were no longer going to
be making A3 copiers, everyone was calling,” reports Rich. He
was approached by Kyocera, Copystar, Konica Minolta, Sharp,
“I had no interest in Sharp because I heard too many horror
stories from dealers who were using them,” says Rich, “and I
didn’t care for the Konica Minolta reps. It was like, ‘We’ll
do you a favor and give you the line.’ I don’t need favors.”
It didn’t help either that the Konica Minolta rep promised
he’d do something for Rich within a week, and then never
“So, it was, ‘I don’t care what you come up with now, you
can’t bring the line in here.’”
Ultimately it came down to two players, Kyocera and Toshiba.
He decided to go with Kyocera Mita because he felt more
confident in the line.
Rich was a loyal Panasonic dealer for years and had no
interest in shopping around even when other manufacturers came
“The only mistake I made was years and years ago,” he recalls.
“Canon offered us its C-version line, which they eventually
got rid of, but anyone who had the line was able to get the
rest of the Canon line after that. If I’d done that I probably
would have stayed Canon and that’s only because of the name.
The name buys a lot of things.”
The transition to Kyocera happened last April and so far so
“The products run, I’ll give them that much,” says Rich. “It’s
a strange way they do their pricing; we’re used to a different
system. They make you jump through hoops. But their support
people are excellent and they seem to be coming out with new
products left and right.”
Spectrum Business Centers, a Ricoh dealer in Huntington Beach,
California recently added Lexmark as a second line. Why?
“We felt we had a lot of holes in our product line,” says
Glenn Plank, systems engineer. “Our clientele seems to be more
small and medium size businesses and Ricoh seems to be
focusing on larger size companies, leaving us in the dust as
they were developing more enterprise level applications.”
Spectrum was looking for a vendor with products and
applications for customers who didn’t have tens of thousands
of dollars to sink into a solution and an IT staff to support
it. While Plank thinks Ricoh products are tops, he felt that
this smaller segment of the market is currently being ignored
by Ricoh. Over the years Spectrum filled the holes with
Panasonic and Muratec devices, but Plank isn’t as enthusiastic
about the product lines as he once was. So, when Lexmark
called, he and owner Leonard Mingoia were all ears.
Due diligence is important before committing to a new vendor
and Plank spoke with plenty of Ricoh dealers who have taken on
the product line, including competitive Ricoh dealers in
Spectrum’s own marketplace.
“They shared a lot of their experience. What the product is,
what it isn’t, what we should expect, and what we shouldn’t
expect,” says Plank. “That helped us feel we were going down
the right path.”
Since taking on Lexmark in July, Mingoia says it’s been a good
move for Spectrum. “Looking at the industry as a whole,
copying seems to be diminishing and printing increasing, and
one of the reasons we looked at Lexmark was because we could
actually sell this to the low end to medium marketplace and
not lose money and maybe even make some money,” says Mingoia.
“They’re awfully good printers.”
They also wanted a product line that wasn’t over distributed.
“I can’t make money selling a HP machine because it’s
distributed by everyone under the sun,” laments Plank.
While Spectrum filled some gaps with Lexmark, Mingoia remains
heavily invested in Ricoh.
“Our whole customer base is primarily Ricoh and even though
they haven’t treated us fairly, they haven’t treated us badly
either,” he says. “Over the years they’ve been good to us. It
really hurt me to go somewhere other than Ricoh, but I talked
to them about it and they said do whatever you have to do to
Plank offers kudos to Ricoh. “Out of all the companies we’ve
worked with, nobody does a better job than Ricoh at delivering
us parts, technical support, and quality manuals. That’s
important to us. Abandoning them wouldn’t make any sense.”
Chip Miceli, president of Des Plaines Office Equipment (DPOE)
in the Chicago area has been a loyal Sharp dealer since the
1970’s. Over the years, he’s done a fair amount of shopping
around for a second line when he needed products that Sharp
didn’t have in their line at the time. He’s also been courted
by his fair share of vendors with Canon hot on his tail right
now. When it comes to due diligence, Miceli starts with the
members of the Select Dealer Group (SDG), an organization of
independent dealers focused on best practices.
“I seek out dealers who have a product I’m interested in,”
says Miceli. “I ask them about the pros and cons of the
product and what issues they have with it and how successful
they are with it. I get input from other dealers because the
dealers I know through SDG will give me the straight scoop.”
This may sound obvious, but due diligence means trying to get
the straight scoop from any manufacturers who he’s speaking
“You have to ask them about their plans for the future,” says
Miceli. “Right now everything is print management and if the
organization you’re talking to isn’t looking in that
direction, or they feel it will hinder their down-the-street
business, that’s probably not an organization whose products
you’d be wanting to take on.”
Shopping for another vendor is not something to be taken
“To change vendors or take on another line is a costly
endeavor,” says Miceli. “Some people think they can do it for
ten bucks. I’ve investigated this and it costs you a lot of
money to get yourself rolling with another product line if you
plan on doing them justice.”
He cautions dealers about taking on another product line just
to have a ‘me too’ product or a couple of machines from the
product line. “If you do that, you’re not going to be
successful with it. You have to spend some money. A lot of
people don’t have the money or want to spend the money and
they don’t do well with it.”
Ray Belanger, president of Bay Copy in Massachusetts, is one
content Konica Minolta dealer, but that doesn’t mean he’s
always been content. Even though he continues to be successful
selling the Konica Minolta line, he’s a prime target for other
“We have everybody knocking on our doors now and have talked
to a number over the past couple of years,” says Belanger.
In addition to Konica Minolta, Bay Copy sells Muratec and
Lexmark devices. Belanger admits he’s looked around
periodically when he was unhappy or just to see what was
available. The reasons are reasons any dealer can identify
“If you’re not getting a good deal from your manufacturer or
if your relationship isn’t that great,” says Belanger.
He offers his take on what’s going on with dealers who carry
“Most dealers have multiple lines now,” he says. “The reason
you used to have multiple lines in the old days was product
driven because some manufacturers had better products than
others and you could pick and choose. Now it’s more about
trying to leverage the suppliers to make sure you have good
pricing and programs. Some of the lines might be better than
others, but all the major players have decent lines.”
Belanger concedes it’s difficult to bring in another line,
although things typically are rosy from the get go. “At least
initially you can be a star because the business you’re
bringing to them is all new and incremental.”
That’s also a good time to receive enticing programs and
pricing, but he says you’ll also be under a lot of pressure to
transition more of business to your new vendor.
Belanger believes in due diligence even though he’s been with
Konica Minolta for 20+ years. That involves talking to other
dealers, particularly through the Select Dealer Group.
“I know dealers who carry all the other lines so I can talk to
them about who has good programs,” says Belanger.
Naturally a conversation with the vendor is part of his due
diligence with the focus being how they handle weaknesses,
perceived and otherwise, new opportunities, distribution
plans, and what other dealers in his area are carrying the
line, as well as plans for direct distribution vs. independent
“A lot of this is driven by programs,” he says. “What are you
going to do for me if we take on your line? How will you help
us get started? What type of pricing are we going to get? Are
there any special marketing funds or programs available to
Asked if the grass is always greener on the other side,
Belanger replies, “Sometimes it looks greener, but I’m not
convinced it is. I don’t think any of them are perfect. It’s
more, ‘What have you done for me lately?’ If you’ve done good
for them lately, you’re probably getting treated real well, if
not, probably not so much.”
Mike Arnold, president of CPO Limited in Santa Clara,
California is a multi-line dealer, carrying Konica Minolta,
Sharp, and Muratec. Arnold added Sharp in 2004 because of
uncertainty around the Konica and Minolta merger. He also felt
that the Sharp line allowed CPO to approach a different breed
of prospects—those interested in lower end devices. Another
factor was Sharp didn’t have any branch operations at the
time, something that Konica did.
“It was kind of a hedge of what might happen with KM and we
also bought a local Sharp dealer,” says Arnold. “That was a
consideration at the beginning of having to compete with a
branch and quite honestly having our butts kicked most of the
Sharp made the decision easy by providing CPO at the outset
with inventory, parts, and preferred pricing for a period of
It’s not easy making a transition to another vendor. CPO found
that out in the 1990s when they switched from Mita Copystar to
Konica because Mita was behind the curve on the move to
digital. Notifying customers of a switch can be a little
“You have to consider the customer base and what kind of brand
loyalty there is to your current products,” he says. “You’ve
been telling them all about the positives and nothing about
the negatives of the line, and then when taking on another
line, you have to switch gears and talk about the negatives
and why they should switch to another brand.”
Arnold admits that Konica Minolta wasn’t thrilled about the
addition of Sharp, but he explained CPO wasn’t going to take
business away from Konica Minolta with the line, but place it
in situations where they couldn’t sell Konica Minolta.
“If we’re in a bid situation with a Konica branch, we know we
don’t have a chance of getting that so we go in with Sharp and
get better pricing and have a better chance of getting the
deal,” notes Arnold.
That strategy has worked out well.
“Most of our Sharp biz has been net new business,” says
Asked if he has any advice for dealers thinking of taking on
an additional line, Arnold ponders the question for a moment,
then replies, “It’s a big commitment. It changes all your
reporting, and you’re going to be carrying twice as much
inventory on parts and supplies and equipment in terms of your
showroom. I wouldn’t add another line unless there was a
specific need to.”
Scott Cullen has been writing about the office technology
industry since 1986.