Local Dealership Claims "Printing is Typically the 3rd Highest Business Expense"

OK......So....?????!!!!!!

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Printing is typically the third highest business expense behind rent and payroll.

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1-3% of corporate revenues are spent on document output

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OK......So....?????!!!!!!

These two statements are hilarious. Things must be a lot different in Canada

Cash Gap:

Just curious why do you disagree with those statements?

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Just curious why do you disagree with those statements?

The first is totally ridiculous. Perhaps a top ten expense, top five for document-intensive industries. For a print for pay, it's cost of goods sold, and so that's out of scope.

The second (1-3% of revenue!) is off substantially.

$1M company... $10,000 to $30,000 per YEAR on document output? Maybe $5,000 if they print a lot of color.

$100M company... $1 MILLION to $3 MILLION per YEAR on document output? Fire someone. Figure out who's selling your toner on eBay. $200k to $500k, again depending on color.

Exxon... $452.9 BILLION dollars. $5B to $15B per year on document output? That's multiples of the size of the entire document output industry, in one company.

Sounds like they got a spitball estimate from a couple of poorly run companies, padded it a bit, and ran with it. If it's repeated unchallenged enough, it will become mantra.

What's the revenue of your dealership? Drop two zeros. What's your typical CPP? Divide it into that number. How many more employees would you need to hire just to haul off that much output!!!

:0

1 million Dollar company
20 employees
Avg print/copy vol of 500 pages per employee

10,000 pages per month

5,000 B/W Mfp = 0.015 = $75
2,000 Color Mfp = .08 = $160
2,000 B/W Prints = 0.04 = $80
1,000 Color Prints = 0.15 = $15

Total $465
Lease $250
Printers =$280
20 Prnters at $500 each amoritized over 36 month
Outsourcing = $100
Total = $1,095 per month x 12 months = $13,,140

Simple math yes (1-3%)

You don't think a $1 million company spends $10,000 a year in output? You can spend that on one MFP before you even make a single copy or print. $10,000 is roughly 300 cases of paper. What about personel time loading paper, toner, PM kits, help desk calls, cost of equipment down-time, walking to and from devices to retreive prints...? The cost of output goes way beyond just the cpc of supplies. Do you think the cost of an employee is nothing more than their salary? Is the cost of an office building nothing more than the rent?

I believe the 1%-3% figure is from a Gartner study going on 10 years ago. Since then, the cost of equipment, costs per page for mono and color have gone down substantially, compatible/re-manufactured toner has grown in popularity/availability, & all devices have become increasingly energy-efficient. Additionally, companies acquire fewer devices, IT can now manage printers remotely via the network, & MPS has become a competitively-bid service in many instances. When you add up the various components, that figure may have been accurate when the study was released, but in most cases it's completely inaccurate. Is it still in every dealer's marketing materials in some way or another? YES. Are there some companies that still haven't addressed this? Perhaps. Is it accurate across the board, I doubt it.

Prove it. Sounds like gun control BS.

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Originally posted by txeagle24:
Is it accurate across the board, I doubt it.

Proof examples please. T

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Originally posted by Yoda:
1 million Dollar company
20 employees

The model diverges sharply from reality right there. Name a million dollar revenue business with 20 employees... We could stop, but so many flaws remain...

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10,000 pages per month

$1,000,000 of revenue, 120,000 pages per year. Every $8 in revenue requires a printed page?!?!? What business are these people in???

It's a $1,000,000 business (do you realize how small this is?) with not only 20 employees, but an MFP -and- 20 printers? They have the revenue per employee model of a flea market vendor but the printed output of a law firm.

Here's the bottom line. Everyone is free to quote a dated, self-serving, transparently ludicrously false statistic if they want. And support it with "Uh, I think it's from Gartner, or maybe BEI, or... I don't know, and I know it sounds ridiculous, but it's the truth!"

Then we'll move on to allocating some of the rent payment to output, since the MFP occupies floor space. And obviously the MFP increases cooling costs, so some of the air conditioning costs should be allocated to output. People walk to the MFP, wearing out the carpeting, so some of the building depreciation is really output. And combined with a little generous rounding, we might get to 1%, and feel better about a 1-3% generalization.

This is going to sound harsh, but we are putting the customer in the situation where they have to decide if we're lying or clueless. Neither is a conclusion that increases trust.

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Originally posted by Yoda:
Prove it. Sounds like gun control BS.

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Originally posted by txeagle24:
Is it accurate across the board, I doubt it.

Proof examples please. T

Ok. Perfect example. Last year I signed a client in a fairly paper-intensive business whose output environment had never been managed. They had outdated printer and copier hardware, no service agreements, were purchasing OEM supplies, paying $125 per hour for service calls plus whatever the service provider charged them for any necessary parts. In addition to the 10% of their time IT estimated they spent on printer-related issues, they were spending just under $5,000 per month ($60k/year) on output. This is a $100 million company with 800 employees. This equates to .06% (not 6%) of their annual revenue. Replacing the outdated hardware & placing the full fleet under an MPS Agreement we reduced that by 40%. This was a company that had NEVER had been under a traditional contract with anyone in our industry meaning they didn't know what the offering should cost & didn't make it a competitive situation. Is that a good enough example? There are plenty more.

"they were spending just under $5,000 per month ($60k/year) on output."

That comes to $0.31/employee/day. That's about 40 sheets of paper, if all you had to pay for was the paper!

In the world of copier rep misrepresentations, this one doesn't deserve this kind of scrutiny...No equipment has ever been bought or sold based on the 1-3% estimate, it's just a door opener. The point is that it is a very large, typically very unmanaged expense that deserves better attention.

If we wish to harp on salerep misrepresentations, how about "a typical B&W business document has 15% coverage, or "it's a zero interest lease" or "you should have a 50 ppm unit if you are going to do 10,000 a month" or "it's in your best interest to include maintenance in with your lease."

I know I'm scewering some sacred cows here.

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Originally posted by Old Glory:
In the world of copier rep misrepresentations, this one doesn't deserve this kind of scrutiny...No equipment has ever been bought or sold based on the 1-3% estimate, it's just a door opener.

Wow. Paraphrase "This is MINOR compared to some of the whoppers we trot out!".

I will remember "It's just a door opener" if I ever need to defend a made-up stat.

Anyway, I guess we agree the stat is bogus, we only disagree as to whether throwing out bogus stats is good or bad.

I apologize. I can see from my quote how you would think that I felt the stat was "bogus." That was not my intent.

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Originally posted by Old Glory:
I apologize. I can see from my quote how you would think that I felt the stat was "bogus." That was not my intent.

Understood. Well, I hope it has been THOROUGHLY discredited beyond any doubt, and whereas it may have been used in the past out of ignorance, if it's used tomorrow it's willful misdirection.

If that helps you sleep at night...