When a copier dealer replaces a competitor’s machine they usually also pick up a supply of surplus toner that is stored at the customer’s site. These supplies in many cases get discarded or sold wholesale. While this is good for the dealer installing the new equipment, it is an unnecessary expense for the previous vendor.
When examining why service profitability is suffering, problems with supply expenses may not surface. This can result in pressure on technicians for more productivity and to reduce parts costs.
Why it Matters
Toner control affects two issues. One is the need for capital, and the other is dealer profitability. From the capital perspective, if the average toner costs the dealer $30, and they have 10,000 units in the field, and the average unit has two extra cartridges, that is tying up $600,000 of capital.
From a profitability standpoint, that same $600,000 has been written off and would show up as an unneeded expense. This could have an impact on a dealer’s credit line or available credit. You only have to look on eBay to see the number of individuals selling supplies to know that misappropriation is a concern as well.
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