Email from Canon P4P'er "Ricoh Direct Pricing"

It seems like this is going on all over the country!!

I wonder what the new president of Ricoh would say or if he even cares. Ricoh is very good product but would sell themsleves to the devil to get a deal.

I don't think they care, its all about the boxes. Personally, I think they have no idea what Direct is doing in the field.

I have mentioned before that all resources are being invested in IKON / RBS and support (field and financial) is being scaled back on the Dealer side at Ricoh. Just wait until April 2009! The current Ricoh leadership would applaud this situation and toast to it with an expensive glass of red wine.

What happens in April 2009 besides Aprils Fool Day!

Local IKON office has tried the same garbage, we've made inroads and won three of the last four deals by simply being different. Packaging evrything together as a solution. FaxPress, Alchemy Document Management Software. Identifying how we can help them not just today but to formulate a document managemet strategy that will take them through the next five years.

quote:

Originally posted by Art Post:
What happens in April 2009 besides Aprils Fool Day!

I'm not sure what else happens, but I do know that Ricoh hasn't implemented any structural changes in IKON and April 2009 is when they plan to do those.

Here in Dallas, we've been seeing plenty of low-ball deals from the local Ricoh branch & IKON, particularly over the past 2-3 weeks. Our guess is that it is due to the fact that March is the end of Ricoh USA's fiscal year, so they are just moving boxes for next to nothing.

I agree with Neal being different by just paying attention to the client works. Direct's game plan is to turn everything to a price deal. Peel the onion back and we all uncover a wealth of opportunity to beat direct. It takes time but you have to know where to play and where to back away.

What kind of structural canges do you think they are going to implement? Does anyone have any insider info?

At this point I do not believe a word that anybody at Ricoh has to say. If any changes are made I would be hard-pressed they would stick to any of them. Personally, Ricoh Corporate is full of hot-air. They should be thankful there is the dealer channel as we pay attention to the bottom line and our clients.

RUMOR has it that Ricoh will change the name of the company to IKON Americas Corporation, effective August 1, 2009. RBS will fold into IKON, with several offices closing across the country. This new IKON direct organization will be the only distribution channel selling 'Ricoh' brand products, while the remaining "strong" Independent Dealers can sell Lanier and Savin (for a limited time) at an approximate 20% higher price than IKON will enjoy. RFG Dual Line Dealers will be requested to drop their other manufacturer's product line, in order to receive that pricing! They are preparing to replace the Ricoh logo on the headquarters building in New Jersey, yet Ricoh University will remain unchanged. Top RFG (Lanier and Savin brand) no longer have the ability to win a Dealer Trip, yet they can join the IKON National Trip to Venezuela next year. April Fool's! Oh sorry, it's only 3/25/09.

Good one, that was a nice read.

GMAN:


You should have waited for April 1st, I'm sure this post would have sent a ripple throughout corporate!!

I agree that was a great Post. I hope someone from Ricoh Corporate signs up in P4P.

There's a few on the site, however no high level execs, they need to be aware of what goes on in the field. Not that they would change anything, but maybe it will clue them into to why RBS loses millions of dollars each year instead of making profit!

Yup, I agree should have waited for the 1st, then you could have led us on for a couple of hours

The sad thing it, 95% of it was believable.

Rest assured Art and all, that just like I found this web-site back in 2004 and have watched almost daily since and posted some, the folks you want to be reading this, ARE.

I personally don't see this to be very believeable. Financially it doesn't make sense to destroy Ricoh's independent community which if you read this, every independent selling RFG would immediately drop them and pick up another manufacturer (we have already). If they went forward with this they would know that they would immediately loose a large percentage of their distribution and more importantly of that percentage it is the most with decent margins, as we all know that IKON/RBS and not making money by giving equipment away. In today's economic times it just doesn't make sense. Of course what they are currently doing doesn't make sense either, but I have to believe that they wouldn't commit suicide???

Time will tell. Not a very long time, either.

Hey, I agree, but when you see that type of pricing without competition, what is everyone to think??? I've seen new wide format fully loaded at 8K, and MP C5000's that were reselling at 2% above dmap 6.

If I may be so bold, I truly believe that the head honchos have no clue what's going on in the street, plus even if they did they have no way of stopping it. They need the boxes placed in order to keep the factories running, more boxes placed equals more supply clicks.

They just don't care, and it's probably the same with every other MFP manufacturer that has a Direct Branh, they are all fighting for survival and only the strongest will survive.

How many players do we have now....let's see Ricoh, Xerox, Canon, KonicaMinolta, OCE, Sharp, Kyocera, Toshiba, Muratec and Panasonic.

Panasonic seems to have thrown in the towel with thier dealer network, and Muratec remains strong as a secondary source. Who would have to believe that three of these companies will retire from the MFP market place in a few years. Rumors were rampant a few weeks ago that Toshiba was going to sell it's MFP division to Canon, until Mark Mathews, President and COO, Toshiba America Business Solutions announced that this was not true and they have never engaged anyone. However two weeks ago Norio Saskai was announced as the new President and CEO of Toshiba Corporate.

Toshiba seems like they are betting the ranch Mirco Nuclear Reactors. I don't think we've seen the last of this.

Rumors have also been rampant that Kyocera has or will sign an OEM agreement with Canon for thier segment 6 systems. Let's be real, there are some great Kyocera Dealers out there, however how many really have the sales force and the bucks to play in that market. I see Kyocera's future as a dominating force for Global Solar Panels, you read more press releases about thier solar technology than thier MFP technology.

Sharp, your guess is as good as mine, they release some fantastic boxes, trying to play in Print Production and then they pass on the "On Demand Show" in Phili.

So, that leaves us with the 5 CORE copier companies, Ricoh, Xerox, KonicaMinolta, Canon and OCE (rumors here with OCE that KonicaMinolta may make a move), these are my bets for who will make the final cut.

The big congolmerates such as Panasonic, Toshiba, Sharp and Kyocera may have bigger roads to hoe than MFP's.

quote:

So, that leaves us with the 5 CORE copier companies, Ricoh, Xerox, KonicaMinolta, Canon and OCE (rumors here with OCE that KonicaMinolta may make a move), these are my bets for who will make the final cut.

All of the above have very good Products.

It is the immediate direction that each entity is going to take, which will determine future success.

I, myself, will bet on the 'core copier company' that supports and invests in their Independent Dealers, as critical and important distribution partners.

It is sad that Ricoh has laid open the market and is allowing the direct reps to compete in current RFG business. The direct operation for Konica Minolta has been put on notice that if they walk into a current KM customer, then they are to turn around and walk out the door. That's from tRick Taylor himself. That doesn't mean if you're a duel line dealer and have non Konica Minolta equipment in there, then it's fair game, but KM is trying to protect its dealer side.

Great point, Neal. Very true.

Ricoh has issued similar statements that have been posted on the P4P. Recently they were in aN AEC account and were told not to quote, and it was honored.

Art,

I work in a Ricoh Direct (Lanier legacy) office located in an area where there are three local RFG competitors in our market. We have explicit instructions to disengage (turn around and walk out) if it's an IKON account or one belonging to the two other RFG dealers. Except for IKON, the dealers can compete against our MIFs and do so with no qualms. They kill us on price, too, which seems to be a different situation than is occurring in other parts of the country. As an example, a coworker is losing an account that was 1.5 years into a 3-year lease. They're "saving them money" by extending the lease out to 63 months, throwing in a dozen desktops and replacing the current fleet with essentially the same boxes that are in there. My guess is that the $30K + buyout doesn't matter to them because they can keep the machines and resell them used for a profit.

I read the large format proposal you posted the other day, went into our system and configured the machine (a W2400, I believe) exactly as your example. I was astonished to see that the quote was 32% below standard commission cost. Up to that point, I was having a hard time believing the rants on this list but I see your points now.

The odd thing is that all the training I received was based on selling value - digging in and trying to match the workflow and documents created to the appropriate machine. The whole notion of "slinging boxes" is looked down upon.

I'm new to the industry (6 months) and am hardly a threat to any of you who've been doing this for a long time. I've learned a lot, though, and have enjoyed this forum and what I've read on it.

quote:

Originally posted by JLS:
I read the large format proposal you posted the other day, went into our system and configured the machine (a W2400, I believe) exactly as your example. I was astonished to see that the quote was 32% below standard commission cost. Up to that point, I was having a hard time believing the rants on this list but I see your points now.

I don't understand standard commission cost. Does that mean you automatically get paid commission if you sell at a certain price to your end user? What about getting paid on GP - gross profit?

SO, if that is correct, then, who benefits from the 32% below "standard commission cost"? Do you still have some built-in compensation from this type of transaction?

I have to ask because I have only worked for my company and I, like Art, can only assume and extrapolate what pay structures must be like elsewhere.

quote:

Originally posted by JLS:
Art,

I work in a Ricoh Direct (Lanier legacy) office located in an area where there are three local RFG competitors in our market. We have explicit instructions to disengage (turn around and walk out) if it's an IKON account or one belonging to the two other RFG dealers. Except for IKON, the dealers can compete against our MIFs and do so with no qualms. They kill us on price, too, which seems to be a different situation than is occurring in other parts of the country. As an example, a coworker is losing an account that was 1.5 years into a 3-year lease. They're "saving them money" by extending the lease out to 63 months, throwing in a dozen desktops and replacing the current fleet with essentially the same boxes that are in there. My guess is that the $30K + buyout doesn't matter to them because they can keep the machines and resell them used for a profit.

I read the large format proposal you posted the other day, went into our system and configured the machine (a W2400, I believe) exactly as your example. I was astonished to see that the quote was 32% below standard commission cost. Up to that point, I was having a hard time believing the rants on this list but I see your points now.

The odd thing is that all the training I received was based on selling value - digging in and trying to match the workflow and documents created to the appropriate machine. The whole notion of "slinging boxes" is looked down upon.

I'm new to the industry (6 months) and am hardly a threat to any of you who've been doing this for a long time. I've learned a lot, though, and have enjoyed this forum and what I've read on it.

Thanx for the input, most of us were taught the same way as you, although back in the old days were used features on the copier to figure out how a customer could save time with certain copy jobs.

I'm sure different parts of the country depending upon Market area use different pricing. It's a mess but we all have to live with it (RFG), however all of us as sales people should try to get more dollars out of our systems and solutions because we have the best hardware systems and solutions out on the market today. I have been told that most RFG reps are heads and tails above other mfg reps in the field. Mind you there are some vg reps out there that are with other mfg's, however when you consider the whole, I believe RFG people are still ahead of the curve.

Art

quote:

Originally posted by CopyFax Jax:
I don't understand standard commission cost. Does that mean you automatically get paid commission if you sell at a certain price to your end user? What about getting paid on GP - gross profit?

I'm pretty sure "commission cost" referenced here is the same as "cost" or "rep cost" meaning the cost you have, before you add GP.

quote:

Originally posted by CopyFax Jax:
SO, if that is correct, then, who benefits from the 32% below "standard commission cost"?

I took his post to be agreeing that there is nothing beneficial about this situation, i.e., he was agreeing with us.

JasonR said: "I took his post to be agreeing that there is nothing beneficial about this situation, i.e., he was agreeing with us."

I definitely was agreeing with you. It's a race to the bottom if you're not connecting customer needs to features or are not providing solutions to their problems.

In this economy, however, it's effective to a lot of mom & pop establishments because they have only the most basic of needs. At least that's the case here in the Southern Appalachians!