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Copier Service Contracts- Are They Really Necessary?

February 19, 2013 Leave a comment

If you already own a copier or are getting ready to buy one you no doubt have been offered a copier service agreement. These agreements go by many names. The most popular are: copier service agreement, copier service contract, copier maintenance agreement, copier maintenance contract.

Whatever your vendor or potential vendor calls them copier manintenace agreements can strike fear in the heart of copier buyers. No I’m not kidding. People really do get afraid and conflicted. Why? Simple. They don’t want to get ripped off. I don’t blame them. My industry is full of shady characters.

I’m really not sure if the copier industry has more shady characters than any other industry but it sure does seem so.

Recently I wrote a two part series called Copier Service Contracts- What You Really Need to Know. If you didn’t get a chance to read them I would take a moment now and give them a read. Here are the links:

Part 1-  http://wp.me/p23icE-2S

Part 2- http://wp.me/p23icE-6b

The series received a lot of attention but there was one question that kept coming back up in the feedback I recieved. It went something like this: thanks Ed for educating me on how not to get ripped off when I purchase a copier service contract, but do I really need one in the first place?

My answer to that is YES. Let me explain.

First of all I am NOT the kind of person who buys service agreements or extended warranty’s. I was at Best Buy a few weeks ago and bought a monitor for my computer and the guy ringing me up asked if I wanted an extended warranty. It was about an additional 15% more for the warranty. I turned it down. I always do and here’s why.

If you look at these extended warranty’s from a long term view, you as the consumer almost always lose. Why? Because odds are you’ll never need the warranty. They are highly profitable for the company. That’s why the salespeople always push them so hard.

But a copier is an exception to the rule. First let me say that although I sell copiers I make no compensation whatsoever on service agreements. I have no reason to care one way or the other except that I want my clients to be exceedingly happy with their purchase and for me that means that they get a service agreement.

Here are 5 reasons why you need a copier service agreement.

1) For what you get, they are very reasonably priced. As I stated in my previous posts a copier service agreement usually covers everything except your paper and staples. Toner, preventative maintenance, and all repairs including parts and labor.

At my company we don’t charge minimums, we just charge by the number of copies/prints used per month, quarter, or year. Depending on the model of the machine and the number of copies/prints used we charge anywhere from .005 (half a penny) per page on the low end to .008 on the higher end for black prints. Many companies are more expensive than we are but even if you’re paying a penny or a penny and a half in my opinion you are coming out ahead.

Remember this includes everything except paper and staples. Of course copier companies are making a profit even at these low numbers but we are all in business to make a profit right? As you can see with these numbers there can’t possibly be a lot of money made here. The money is made in the volume of pages copied and printed.

2) Preventative maintenance is scheduled and taken care and you don’t have to do a thing. In my opinion this is a really big deal. We are all very busy in our business lives and it’s too much to ask our customers remember at what intervals their copier needs preventative maintenance.

When you have a service agreement your copier company knows when you need a PM (preventative maintenance) call and they will do it automatically. You don’t have to remember anything. This is important because copiers are machines and just like other machines they need to be maintained.

If you think about all the things a modern copier does it’s amazing they don’t have more problems and break downs. One of the reasons they don’t is because many copier companies do a great job of maintaining the machines. It’s actually in their best interest to do so because if they don’t and the machine has a major issue due to wear and tear it will cost the copier company a lot more money than what they would’ve paid for a preventative maintenance. appointment.

3) It locks in your toner, maintenance and repair costs, with a reasonable increase, for the life of the contract. If you don’t have a service agreement the copier manufacturer or dealer can increase the cost of toner, preventative maintenance and repairs any time, and as much as they want.

Furthermore if your copier goes down and you don’t have an agreement the cost of a service call is around $150.00 per hour PLUS parts. If the copier has one serious issue the agreement can pay for itself very quickly.

4) If your copier is down, you are a high priority and should have a guaranteed response time built into your service agreement. This comes in handy because as we all know when the copier goes down a lot of work just can’t get done.

A guaranteed emergency response time may not written in the standard service agreement with all copier companies but you should request it. Read the fine print of the service agreement and if you don’t see anything about it request a guaranteed response time IN WRITING. Also, don’t forget to ask what the penalty is for the copier company if they don’t meet that response time.

For example at my copier company, Action Business Systems-Toshiba here in Baltimore, Maryland we have a guaranteed emergency response time of 4 hours. If we’re not there on time we will credit the customers next service invoice $100.00. It’s a strong guarantee and we stick to it. So should your copier company.

5) Finally, if the copier has a major issue and is down for more than a few business days as part of your service agreement you should get a free loaner, you just pay for the toner used.

Here at my company our guarantee is that if the copier is down for more than two business days we’ll bring in a loaner. You may be thinking there’s not way you could live without your copier for two days but let me reassure you, this pretty much never happens. Most copier break downs can be resolved in a matter of minutes or a few hours at the max.

If you don’t have a service agreement no copier company is going to give you a loaner for free. They may rent you a copier but it’s going to cost you because you’ll pay a rental fee plus a fee for how much toner you have used. Again the free loaner may not be written into the standard service agreement from your copier company but you should negotiate to have it added.

All of the reasons I have listed above and many more add up to three words, PEACE OF MIND. When you purchase a service agreement everything is taken care of and for a very reasonable price. That;s why I think they’re a good idea.

I hope this was helpful. If you have any questions feel free to shoot me an email, give me a call or fill out the easy form below. 443-570-0414 If you’re in the Baltimore Maryland, Washington DC or Northern Virginia area I would be happy to give you a competitive quote on your next copier, printer, scanner, commercial document shredder as well as all types of document management software. Thanks for stopping by and I hope you have a fun day!

 

Do you really need a color copier?

January 31, 2013 Leave a comment

Recently I was working with a prospective client  in Owings Mills, Maryland who was purchasing a new Toshiba copier from me.

As I was asking him questions about his copying and printing needs he got a concerned look on his face. Obviously I knew something was troubling him so I asked what was on his mind.

He said “Ed, do I need a color copier?”. This certainly wasn’t the first time a client or prospective client has asked me this question. As a matter of fact, I get the color copier question all the time. I think it’s a reflection of the tough economy were in here in America. People want to be very sure that the extra expense of a color copier over a black copier is worth it to their business or professional practice.

One of the first questions I ask in this situation is “how are you handling color copies and prints now?”. Typically my small business/small practice clients are doing one of two things: 1) they outsource their color printing to Staples, Office Depot or a local printer or 2) they print them out on a desktop color printer.

Once I have established what they are doing now my next questions is “how many color copies or prints are you doing per month and year?” Many times my customers don’t really know their true volume so we have to do a little investigative work.

One helpful strategy is listing out on a piece of paper all the different types of color copies and prints they do throughout a year and then listing beside each project the approximate number they do for that project per month and year.

I think it’s important to look at this annually because many times there are printing projects that are only done once or twice a year and the customer tends to forget about those projects if we are only thinking in a monthly context.

In the case of this customer once we listed out all of his annual color printing needs he only did about 500 color prints per year. I consider this a very low color volume.

I advised him that this didn’t justify purchasing a color machine and he should continue to send those jobs out to a printer.

I did also find out that he was sending his jobs mostly to Office Depot. OUCH!! can you say expensive.  I advised him to find a locally owned print shop or go online where in either case the prices would be significantly less than Office Depot or Staples.

In the situation of a company doing thousands of color copies and prints per month I would recommend considering a color copier.

It comes down to doing the math. How many color prints and copies do you do per year times what you pay per copy/print at a local print shop versus what you would pay to do them in house on your own color copier.

Once you know these numbers you have to consider the added cost of a color copier versus a black copier. Your purchase price or lease payment will surely be higher for a color copier than a standard black copier but in many cases it’s worth it.

Another consideration is the time involved in calling a printer, driving there to drop off artwork if necessary and then driving back to the printer to pick up the job. As we all know during the business day Monday-Friday our time is money and I feel this is a legitimate consideration when deciding to buy a color copier or a black copier.

When it comes to local printers I have seen color copies/prints done in the range of 15 to 35 cents each. This is just my experience and your local printer may do them for less.

With a Toshiba copier (which is the brand I sell) you can make a color copy or print for anywhere from 5-10 cents each. Where you would fall in this range depends on what size color copier we are speaking of.

I hope this helps. Please contact me with any copier/printer related questions or to get a competitive quote. I’m always happy to help. You can call me, email me or fill out the easy form below. Thanks for stopping by!

Copier Service Contracts- What You Really Need to Know- Part 2

January 15, 2013 Leave a comment

Hey it’s Ed Worthington from Action Business Systems-Toshiba Copiers. We are a copier company in Maryland serving the Maryland, Washington DC and Northern Virginia area but this blog is relevant to anyone in the world who buys copiers.

In today’s installment of my Copier Service Contracts series I’d like to talk with you about another thing you really need to know about copier service/maintenance contracts: Automatic Increases.

When I say automatic increases what I mean is that ALL copier service agreements contain in the terms and conditions the ability for the company to increase the cost of the service in specific time increments.

For example the agreement may state that the service fee can go up as much as 5% per year each year. Some people may think that’s too much and some may think that’s reasonable.

My main purpose of this post is to make you aware of the fact that these increases exist in the fine print and to let you know that YOU NEED TO READ THAT FINE PRINT SO YOU DON’T GET RIPPED OFF.

This is particularly relevant to me right now because there is a company I am working with right now whose current copier vendor has a 10% per quarter increase built in. Yes I said 10% per quarter. OUTRAGEOUS!!

This company also just received a check in the tens of thousands of dollars from their current copier company because I exposed that fact that they were being ripped off.

The current vendor not only charged them the 10% per quarter but much more. Can you say SHADY!

You may ask yourself how a copier company can get away with overcharging a small business so badly.

Well I’ll tell you how and it happens all the time. It is because the business Owner/Controller/CFO doesn’t pay attention to the service bill from the copier company and they increase it slowly. They don’t increase it by 30% all at once. But maybe by 5-6% every quarter.

It really starts to add up!

So the first ACTION POINT here is before you sign a copier maintenance agreement read the fine print and if you don’t like what you see, negotiate.

The second action point is to read your copier service bill carefully and watch for increases.

This advice could save you a lot of money in the long run.

If you have any questions about copier service agreements or anything else copier/document management related feel free to call me or fill out the form below and I’ll get right back to you. 443-570-0414 Thanks for stopping by.

Copier Service Contracts- What You Really Need to Know- Part 1

December 7, 2012 Leave a comment

When it comes to copier service contracts there are some things you really should be aware of so you’re not caught off guard after you sign a contract. One of the most important is that most copier service contracts have a built-in minimum amount of copies/prints per month and charge overage charges if you go over that minimum.

When a copier company comes out to meet with you to give you a quote many times they will ask you how many copies/prints you are doing per month now. The reason they ask this question is because when they prepare a quote for you they’re going to quote you a price for the machine (cash or lease price) and they’re also going to quote you on a service contract for that machine.

Just to be clear the terminology may vary depending on what part of the country you are in but typically the contract will be called a service or maintenance contract/agreement.

The quoted price usually includes toner, repairs (parts & labor), preventative maintenance, and any consumables. Basically everything except your paper and staples.

In case you’re not aware a copier service agreement usually consists of 2 components. A monthly minimum number of copies at a set price and then a per copy/print price for “overages”. For example your agreement many be for 10,000 black copies/prints per month for $100.00 (1 cent per copy/print) and then any “overages” will be billed at an increased rate say, 1.5 cents per copy/print.

I’ve never really understood the overage thing and it truly baffles me. In what other business does a company penalize you for buying more of their product? In other words in the above example as part of your monthly “minimum” 10,000 copies you are billed at 1 cent each but magically after the 10,000 copies/prints per month the price goes up to 1.5 cents. Why? I really can’t tell you. Does it cost the copier company any more for the toner at the 10,001st copy than the 10,000th copy. I think we know the answer to that.

On top of this mystery there is another mystery I can’t seem to solve about my industry. If you do less than the “minimum” number of copies/prints per month (again 10,000 in our example) than you are still charged for the 10,000. Why? Again, no clue.

I would agree that in some cases where a business or professional practice does a very low volume per month/year there does need to be an annual dollar minimum. At my copier company in Baltimore, Maryland we have a minimum of $300.00 per year for the service agreement. I think this is very reasonable due to the fact that the service agreement covers repairs and toner. In other words if your copier goes down and we have to send a technician to your location and you bill less than $300.00  for an entire year than you can see how the company can easily start losing money. When your copier goes down they/we have to pay the technician, gas, parts, ect. Again keep in mind that the $300.00 minimum includes toner.

So in summary if you go over your “minimum” monthly copies/prints the cost per copy goes up and if you go below your minimum you still would be charged for the 10,000 copies/prints. Sounds like a lose/lose proposition for the customer to me.

Here at Action Business Systems I write my service agreements very differently. For example, I have a company interested in a new copier in Towson, Maryland. The way I quoted their agreement is the way I quote them all.

First, we agree on a per copy/print cost. In this case we were at $.007 (less than one penny) per copy. This amount varies depending on the type of copier you buy due to the toner efficiency of each machine.

Then, once the copier is delivered we wait until their first month is over and bill them for the exact amount of copies they did in that month. Then we do the same for every month thereafter. There is no lose/lose situation with minimums and overages. This is the most fair way to bill a customer for their copies/prints.

So in the example of the Towson, Maryland customer above if they do 20,000 copies/prints per month we just multiply that by .007 for a total of $140.00 for that month and we send them an invoice for that amount. Simple and fair.

You may have trouble finding a copier dealer in your area willing to do business this way but if you insist on it you may just get it.

If you’re business or professional practice is located in Baltimore, Maryland, Washington DC or Northern Virginia area I would be happy to give you a simple and fair quote on a new copier and copier service agreement. Just shoot me a call or email. In the month of December 2012 we are giving away a free Toshiba Laptop, Toshiba Thrive Tablet or Toshiba flat screen TV with every new copier purchased or leased. Contact me, Ed Worthington at 443-570-0414   ed@edworthington.com or just fill out the form below.

How Fast Does My Copier Really Need To Be?

November 11, 2012 Leave a comment

One of the questions I get the most and probably the first question you should ask yourself when purchasing a copier is, “how fast does my copier need to be?”.

The speed of the copier you select should be based on the number of copies and prints you will do per month.

Buyer Beware! When reading the manufactures literature they tend to overinflate the number of pages per month that their copiers can handle.

So in order to help with this question I have copied the information below ( how to determine your monthly output and the maximum duty chart) from BLI’s (Buyers Laboratory) website.

BLI is an excellent source of unbiased information for anyone in the process of buying a copier or printer. At the end of this post I have included information on who Buyers Lab is and how to contact them.

How do you determine your monthly output volume?

  • Bills for your service agreement and print shop provide a good snapshot of your current usage; so does a look at your current copier’s meter.
  • Some copier companies use network management utilities that can tell you all the prints, copies, faxes and/or scans sent from the network to your copier or printer.
  • Many dealers also use devices that audit your volume. However, audit tools can sometimes miss devices such as small printers.

The chart below compares the average manufacturers maximum monthly page output vs. what Buyers Lab recommends so you don’t  send your copier to an early grave.

Manufacturers’ Maximum Monthly Duty Cycle vs. BLI’s Optimum Monthly Volume

Monochrome Average Maximum Monthly Duty Cycle BLI’s Optimum Monthly Volume
Up to 20 ppm 19,094 3,600
21 to 30 ppm 50,983 9,000
31 to 40 ppm 123,140 17,000
41 to 49 ppm 145,141 26,500
50 to 59 ppm 259,070 37,250
60 to 69 ppm 314,865 55,000
70 to 79 ppm 347,059 82,000
80 to 89 ppm 530,000 135,000
90 to 99 ppm 750,000 175,000
Color* Average Maximum Monthly Duty Cycle BLI’s Optimum Monthly Volume
16 to 25 ppm 85,879 13,500
26 to 36 ppm 113,101 15,000
37 to 46 ppm 153,278 28,000
46+ ppm 225,306 36,500

* For color models that a have a different speed for color and black modes, the speeds listed are the black speeds.

Hope this helps!

Come back next month when I’ll cover the question, “Should I lease or buy a copier?”.

If you have any copier buying questions please feel free to contact me.

If your business is located in Baltimore, Maryland,  Washington, DC or Northern Virgina and you are in the market for a new or used copier please contact me for a NO OBLIGATION, ABSOLUTELY NO PRESSURE quote.

Ed Worthington- Senior Account Executive

Action Business Systems-Toshiba

ed@edworthington.com

443-570-0414

Buyer Lab Info:

For over 45 years, Buyers Laboratory (BLI) has been the leading source for unbiased and reliable intelligence for the imaging industry. BLI was founded in 1961 by the late Arthur Kallet, the co-founder and 20-year head of Consumers Union, the publisher of the highly respected Consumer Reports magazine (BLI is not affiliated with Consumers Union). In February 2004, BLI was acquired by publishing industry veterans Michael Danziger and Mark Lerch, the current Chief Executive Officer and Chief Operating Officer of BLI, respectively. In 2005, BLI launched its international division with offices in Hong Kong and London.

You can reach Buyer Lab on the web at http://www.buyerslab.com