Renting Copier, Fax Machines and Printers-Part III    
By Larry McGinnis

Installation and Protecting Yourself

We‘ve reviewed the methods of getting started and pricing rental equipment. The next most asked question: “How do I protect myself from the rental customer who just takes off with my machine?” In 20 years of renting hundreds of copiers, fax machines, and printers in a major metropolitan area, I can honestly say that it only happened to me four or five times. My money loses were minimal, but I did take some precautions.

RULE #5: ALWAYS CHARGE FOR INSTALLATION, AND NEVER LET THE CUSTOMER PICK UP THE EQUIPMENT
                                                             

One would think that this rule would be automatic--not so. It’s surprising to me how many newcomers to the copier, fax, and printer renting business allow the customer to take a copier or a fax machine with them. Let’s look at charging for installation. Installation is an expense item; anything costing extra should be charged for. And the installation charge is a necessary ingredient to building a rental program. Even if you do the installation yourself, it’s important to charge for it. It cost you to install the equipment-- it cost you as far as an auto expense and in terms of your time. I include, at the time of installation, full paper cassettes and an extra toner/image cartridge. I also include a copy of the user manual (never the original).

I also view the installation charge as a profit center. It’s important to sell the installation charge just as hard as you sell the monthly rental. I only remember one incidence when a prospect wouldn’t pay an installation charge. The amount I charge for installation varies with the size and type of the equipment and the location of the installation. The base charge is $79 to $279. I add extra charges for distance and degree of difficulty. For example, I add $20 for each 20 miles outside of the normal 20 mile radius, and I add $50 for taking a machine up a flight of stairs, with an additional $20 for each flight after the first. The $79 charge is for a small, low-volume machine; but if I have to get it up a flight of stairs, the cost would go up to $129.

The last item in pricing a rental is toner/image cartridges and paper. I don’t include toner/image cartridges or paper in the rental. I've tried it both ways, and I've learned that if you include paper, the customer will expect you to pay for letterhead and specialty papers. Paper has never been at a lower price than it is now, and it just doesn't pay to stock it. If you include paper in your rental, you’ll be expected to stock and deliver it. As for toner/image cartridges, they provide a nice profit center for me, and if they’re included as part of the rental, that factor is removed. When I’ve included toner/image cartridges in my rentals, I ended up with a tremendous stock of toner/image cartridges that I owned, but are in the customer’s office. I've had customers give toner/image cartridges away to friends and then blame me if the cartridges didn’t work in the machines that their friends had. Including toner/image cartridges and paper just adds to the cost of the rental with no real gain. If you want to include these items as part of your rental program, be sure to build the cost into both your monthly base and your overage charges.

I charge top dollar for toner/image cartridges, and I get it. If the customer shops around and finds a better price for them, I’ll make an effort to recapture his toner/image cartridges business. But, if he’s buying the toner/image cartridges so low that I can't make a profit on it, I just let it pass.

Your rental contract should have a clause in it that protects you from the damage that can be caused by the customer using poor-quality toner/image cartridges or using the wrong toner/image cartridges.

I find that most customers would rather have you take care of everything, including furnishing the toner/image cartridges.

Next month we’ll look at selling and prospecting for rental customers.

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Larry Breed is the president of Office Automation Consultants, Inc., a consulting firm specializing in Sales Force Automation, Sales Business Process Outsourcing, Relationship Marketing, and Lead Generation. Contact Larry or visit OAC, Inc.’s website. Tel: 800-875-7599, Fax: 253-830-1631, Email: lbreed@oacinc.com, Website: http://www.oacinc.com .