The End Of The Day With Ray! Data Points Don’t Lie

@Ray Stasiezcko posted:

Anon, other than the obvious product print in Seg.6-8 which is around 2% of all print equipment placements. There are very few A3's which run too much volume for an A4. The important part of the conversation is that when a dealer losses this large percentage of equipment the remaining isn't enough to sustain the dealers as they were. The outdated model must be replace by the channel or the channel can wait for the disruptors. 

Riddle me this then, what is too much volume for an A4 MFP for a monthly volume?

@Anon posted:

Ray there is no way 90% of A3s can be replaced by A4s! The data is averaged which means there are many A3s doing very low volume, many at medium and many at high volume. I would not argue if you stated 40-60% but you’re way off the mark with 90%

Anon, other than the obvious product print in Seg.6-8 which is around 2% of all print equipment placements. There are very few A3's which run too much volume for an A4. The important part of the conversation is that when a dealer losses this large percentage of equipment the remaining isn't enough to sustain the dealers as they were. The outdated model must be replace by the channel or the channel can wait for the disruptors. 

I am sure you are correct Ray,  You have access to way more big data than I have.

Also, the copier manufacturers are starting to get into their 2nd and 3rd generation of A4 product  which is much more reliable with lower TCO.

Print volumes can now only decrease at a faster rate as corporations offer their workers full time work from home.  As you said, COVID-19 pushed the industry five years into the future in a few months and people like that future and will not go back to the old way.

I am getting my head around the "IT stack" and how I can better prepare for that new reality.

Ray there is no way 90% of A3s can be replaced by A4s! The data is averaged which means there are many A3s doing very low volume, many at medium and many at high volume. I would not argue if you stated 40-60% but you’re way off the mark with 90%

SalesServiceGuy, Not an accurate argument unfortunately 50% of the service calls on the A3 are generated by the technician. A3 equipment takes longer to service and has way more parts. The increase in volume from A4 average to the A3 average would not increase calls. There is data to prove that as well. We could have spent 5 hours on a video.

The bottomline dealers need to look at global data not one offs. A4 could easily replace 90% or more of all A3's  in the market. The higher cost of hardware and the insanity in premature buyouts cost end-users more than toner to produce between 2-6 thousand pages a month. Also that average 6 k a month in pages will begin declining even faster as businesses ramp up their digitalization. 

Something to consider,  I don't expect too many dealers to modify as needed. The disruption to the majority of A3 current placements will come from those dealers who move into IT services and some outsiders who will change the processess for the current industry's customers in getting print equipment and its services. These processess will align much closer to the realities of the market. 

This weekend Hertz filed bankruptcy their failure wasn't caused by a rental car competitor beating them. Hertz failed because an outside industry called the Rideshare Industry took away the majority of their customers as the business traveler opted for a better experience.

The copier dealer industry as it was in 2000 is going to be defeated in the way Hertz was. An innovator who changes the processess to a large enough percentage of their customers the oversold A3 customers. A process with a much better experience. 

A4 is easier to ship, install, fix, and has way less parts. In this video i also mentioned that print equipment and its services, supplies and parts don't exceed 2% of a businesses IT spend. The customers want convince and reliability. Data proves that A4 is way more convent and way more reliable. 

At around the 4:00 min mark, Wes says the average A3 volume is 6,788 per month and the average A4 volume is 2,000 per month or 29.5% of the A3 volume per month.

This would partially explain why the onsite service call outs on an A4 MFP is approx one third of an A3 MFP.

Clearly,  the A3 MFPs are being used much harder therefore the higher labour and parts costs.

Many manufacturers only sell expensive entire assemblies for A4 parts while they offer much less expensive individual parts for A3 MFPs.

The typical A4 MFP has a higher cpc break even charge than an A3 MFP, so the TCO does not always make $ sense for an A4.