Archive for November, 2016


HP has a real opportunity with the Samsung MFDs, I hope they don’t screw it up.

November 9, 2016

I have been in the Industry for 30 Years. 25 of them I have spent at NECS which has been in business for 50 Years. This gives me a unique perspective of our industry. I was invited by HP to go Idaho with a fellow SE (Bill Peacan) many, many years ago to take a look at the Mopia and  to see if our dealership wanted to take it on. HP has a great name in the Printer industry. IT people love HP, and while we REALLY liked the idea of having the HP name on our Business cards, we did not take on the Mopier, because it was clearly not ready for prime time (it was a scanner mounted to the top of a printer connected by wires but not really integrated. Our neighbor to the North decided to take on the Mopier and their “challenges” with the product proved to us that our decision to gracefully decline was the correct decision. I will say HP treated us very well during our visit to their Headquarters.

When I first heard that Samsung sold their Printer Division (including MFDs) to HP I was upset with Samsung. They came in with a roar, and much pomp and circumstance, talking about how they planned on being #5 in 3 years, and #3 in 5 years. But Samsung became impatient. Our industry has a way of doing that to companies that think they will bend it to their will. I remember one manufacturer setting up shop (Direct Sales _BS Branch) in our back yard and directly competing with one of their largest dealers in the country. They also came in bragging that they would crush NECS and take our business as well as the Canon market share that IKON and Danka had. Not so much! Why? Because MFDs require support after the sale. When I say support I mean good service and network and solutions support. The Direct Sales offices have never been good at supporting what they sell. They have one good line “We are the Manufacturer, why would you want to buy from a Dealer when you could buy from the Manufacturer?” To which I reply “Who do you know that buys a car directly from GM or Ford?” Why don’t they? Because a car like an MFD needs service after the sale. That is how the large regional dealers have NOT ONLY SURVIVED, BUT THRIVED during the rise and fall of IKON, DANKA & GLOBAL, as well as the rise of the Direct Sales (_BS) Branches. Because they have shown that they CANNOT do what we do. All they can do is be cheaper. And I don’t know anyone who goes out to buy the cheapest Suit, or the cheapest Car, or the cheapest TV that they can find. When it comes to their personal life they demand value. It seems like even some purchasing departments are starting to look beyond who is the cheapest price. Because the sweet taste of a cheap price soon turns bitter in the face of bad service and support. How long is our lease (3, 4, please don’t tell me we have to put up with this terrible service for 5 years).

But what does all this have to do with HP buying Samsung? Perspective! Having seen HP struggle time and time again trying to gain a foothold into the MFD market only to fail time and time again. If you work for HP and you are reading this please don’t get offended as I am simple recounting the facts from the Mopier to the Edgeline to re labeling actual MFDs you have to admit that HP has struggled in this space. Again you ask why? Because HP’s model is a drop ship model. It works great for Printers and you can survive on slim margins because you don’t have to do much of anything when you drop ship a product. MFDs do not lend themselves to a drop ship model. MFDs require infrastructure. You might have 6 to 9 Printers for every one MFD. If a printer goes down, no problem, you simply print to the next closest printer, and you can wait a couple of days or a week to get it fixed. Maybe it is a throw away printer (cheap) and you swap it for a new one rather than fix it. Of course the new one takes different toner and supplies so you end up with a closet full of orphaned supplies. But when your MFD goes down, and you can’t scan, fax, copy or Print in Color the office goes into a panic. That is why MFD dealers have to commit to a 4 hour response time. Those that constantly miss this goal are typically replaced no matter if they are the “cheapest” price next time around.

HP can get something that they wanted when they tried to sell the Mopier, that they have never really had; and independent dealer network to sell and support the Samsung / HP MFD. Their was a time that HP saw the value in this. I fear that they will let the arrogance that has been their hallmark in all their dealings with the Independent Dealer community push them to cut their nose off to spite their face. Samsung has done a good job putting together a National Dealer network. HP could leverage that to continue to sell and support the Samsung / HP MFDs. But they have to do a better job working with the Independent Dealers. HP needs to see it as a symbiotic relationship and not look at the dealers as subservient to the great HP. We are not. We have been successful for decades without you, and we will be successful if HP decides to take the Samsung / HP MFD away from these dealerships. But you know who won’t be successful; HP. Not without a National Dealer Network who can and has done a terrific job supporting MFDs after the sale. HP is another manufacturer or in this case a reseller of a product that the Dealers have had success and growth with. We have done it already and well done is better than well said.

I am not saying that HP couldn’t also sell this product but if they try to do it exclusively like they have done in the pass, and cut off the dealer network well….. Those who don’t learn from the past are doomed to repeat it. I understand that this may be a bitter pill for HP to swallow. But Pride goes before a fall and a haughty spirit before destruction. If they understand that there could be a great relationship between the current Samsung MFD Dealer network and HP and we could work together to help make each other more successful than either of could be on our own. We would have common ground to move forward on. But if they stay true to form, they will try to be heavy handed with the INDEPENDENT Dealers and they will lose their support and market share. The choice is yours HP. Chose wisely!

What would an Independent Dealer like to see from HP? First hire some “Copier People” to handle this channel. Maybe keep the Samsung people and allow them to keep working this channel for you. Secondly, what would be IDEAL for HP and the Dealers is to allow the Independent Dealers to continue to sell the Samsung MFDs (with their Android OS and large Touch Screen unchanged. If HP wants to add their own interface and OS to make it more compatible to the rest of their HP line that’s fine for their sales channel, but allow the DEALER network (Which could be HPs MFD Dealer Network) to keep selling the Samsung either as Samsung (to differentiate themselves, dealers LOVE to differentiate themselves) or if you MUST relabel them as HP (we could live with that) as long as you leave the OS and the Large Touch Screen in place for these dealers. This Independent Dealer network has been successful and will continue to grow IF, and only IF HP embraces the Independent Dealer channel for what it is, a Partner. The ball is in your court HP, don’t screw this up!

That’s my $0.02
Vince McHugh