The Big Crunch Through An Independent Lens

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I have been in the "copier" industry for 25 years, and blogging about it for about 4 years now. I have been a trainee, a technician, a troubleshooter, a field service manager, Systems Engineer, Systems Support Manager, Pre Sales Solutions Engineer, and now an Executive. I have worked for two major corporations (3M & RICOH) and one large Independent Regional Dealer (NECS). Life is different at an Independent Dealer than it is at a Direct Branch. The priorities, the mind set, and how we do things are different. I was recently invited to blog for the Copier Network, and feel that I can bring the Independent Dealer perspective to the forum.

I'd like to talk about the big crunch, the great consolidation of the copier industry that we are currently experiencing. But first a little history; In the 80s the Independent dealer was large and in charge. There were few other distribution options for manufacturers of Copy Machines during that decade. Then during the 90s & 00s the mega-dealers came on the scene (Ikon, Danka, & Global) gobbling up Independent dealers like Pac-Man. If I had a nickel every time one of these 3 "mega dealers" said that they were going to buy my dealership, or that NECS was going out of business, I would be wealthy enough to retire.

In the last decade the landscape of the copier industry has changed dramatically again. Not only was Ikon bought by Ricoh, and Danka by Konica Minolta, but Global was purchased by Xerox, and most recently Canon acquired Oce. To top it off most of the copier manufacturers have opened up Direct Sales Branches to compete against their own Dealers. Most of these direct branches end with... Business Systems or Business Solutions name (CBS, RBS, KMBS, and TABS), so please forgive me if I refer to them as the _BS branch. In light of full disclosure, I worked for one (RBS) for a little over two years. And I am proud of what "we" accomplished during that time. At the end of two years we had hit our 'triple crown" numbers. Our branch was the only RBS branch out of 13 in the USA to hit those numbers that year, and the branch had never done it before. But at the end of the second year, Ricoh merged RBS with Lanier, and Ricoh Corporate management dismantled what we had worked so hard to build. I can't respect management who asks you to accomplish difficult tasks and when you do they refuse to acknowledge them. So I accepted an offer from the dealership that I had previously worked for, as the Vice President of Network Solutions, a position which I have held for the past 5 years.

In fairness to the copier manufacturers, I understand why they opened up direct sales branches. I believe that Canon alone lost 60% of their distribution when the big three (Ikon, Danka, & Global) were purchased. And distribution is crucial to manufacturers. The problem is itís not as easy as they thought it would be. And they are struggling to turn a profit, and in my humble opinion, they are "dumping" their products and service on the market place, giving it away to buy market share.

Add all of the above to a terrible economy and you get unrelenting rumors of Sharp's imminent demise, the _BS branches losing millions of dollars, and Independent Dealers selling off their businesses to Manufacturers. It looks a little like "The Lord of the Flies", where only the strong survive. Itís clear that our industry is contracting, and maybe that isn't as bad as it sounds (unless you work for or sell Sharp). Maybe itís a part of the business evolution, and we are just culling the herd. Unfortunately, the MFD has become a commodity. It is the value that you add to it that will separate you from your competitors. If all you have to say to a customer is that I have a good product, and I am a nice guy who works for a fine company, then you BETTER BE THE CHEAPEST! But even that won't be enough if you are up against someone who knows how to bring added value to the table.

That's My $0.02,

Vince McHugh

[Vince McHugh is VP of Network Solutions for New England Copy Specialists, Inc.]
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