Some Dealer-Channel Digital Imaging Vendors Are Finally Coming Around To B2B—Who Is And Who Isn’t?

When Wirth Consulting decided to perform a comprehensive Head2Head Comparison Reporton entry-level monochrome network MFPs, we found that the category was more complicated than we initially thought. We define “entry level” as the lowest-priced monochrome MFP offered by each vendor, with network capability, as we believe networking capability is essential in any shared office environment. And of course, we only selected models available through the retail channel.We did our research and came up with 10 models that qualified from Brother, Canon, Dell, Hewlett-Packard, Konica Minolta, OKI Data, Panasonic, and Xerox.  Prices for these systems range from $189 to $399. However, once we began our evaluation, we noted that there were two classes of devices within this group that were not readily noticeable.

We determined that the four devices that cost in excess of $300 had a considerably lower Cost Per Page (CPP) and that some could be upgraded to a larger media capacity. Consequently, we determined that it was not realistic to compare Total Cost of Ownership (TCO) between low-cost/moderate-to-high CPP devices and high-cost/low-to-moderate CPP devices. We also noticed that these four devices were available from vendors that primarily support the office-dealer channel: Konica Minolta, OKI, Ricoh, and Xerox. Consequently, we decided to split this group in two.

Here are the Best in Class Winners for the two groups:

Entry-Level B/W Network MFPs Under $300 Entry-Level B/W Network MFPs Over $300
08_30_10_Best_In_Class 09_01_10_Best_In_Class
Panasonic KX-MB2030 – $189 Ricoh Aficio SP 3400SF – $399

Note that in spite of a $210 price difference and a considerably lower CPP, the TCO of the Ricoh Aficio SP 3400SF was lower than that of the Panasonic KX-MB2030 at monthly printing volumes above 250 page per month, and the feature set of the Aficio SP 3400SF made it more suitable for higher monthly print volumes.

The moral of the story is this:

Wirth Consulting has been studying the B2B and retail channels for printers and MFPs for several years now.  The Head2Head Comparison Reports just described mark the first time that we’ve seen devices from vendors devoted primarily to the dealer channel out-perform devices from vendors who supply the B2B channel.

Several key findings about the products from vendors who primarily supply the dealer channel stood out:

  • Cost Per Page and Total Cost of Ownership is considerably lower for dealer-channel MFPs.
  • The dealer-channel MFPs’ overall feature set is highly competitive and expansion options are available
  • While previously, the dealer-channel vendors typically watered-down the business-class feature set of their A4 B2B MFPs (presumably for fear of eroding sales of their more lucrative A3 MFPs), this current class of devices (B/W monochrome MFPs) for the most part provide business-class features such as color scan to network folders, scan to e-mail servers, etc.

While the vendors that primarily serve the dealer channel still have a way to go with B2B products that provide color, duplexing and finishing, the results of our study are encouraging.  We understand that said vendors feel they must protect the sales of their dealer products, but some of them recognize the scope of the B2B marketplace, and have the foresight and guts to be proactive about it, while others are still in denial.

Dealer Channel Vendors – B2B Scorecard

Note that the following table uses Hewlett-Packard as the benchmark.  Clearly HP is “King of the B2B Channel” and rightly has many cross-hairs focused on them.  How does Wirth Consulting rate HP’s B2B lineup?

  1. Officejet product line – Business class feature set and low CPP and TCO,
  2. LaserJet product line – Business/enterprise class feature set and high CPP and TCO.

Clearly, HP can do better with the LaserJet product line, simply by lowering the cost of the supplies.  This would really lower the boom on the dealer-channel vendors that compete with HP all day in the trenches, primarily by selling devices with a considerably lower CPP and TCO.  This one move would be far easier than revamping the entire LaserJet product line, and it would other vendors off at the pass.  Can it really be that simple?  Does HP have the fortitude to go for it?

Vendor B2B Offerings And Strategy

Vendor Ink Jet B/W Color Business
Feature Set
Enterprise Feature Set Comments
Canon Yes Yes Yes No No Intriguing products with moderate-to-high CPP and TCO, but Canon U.S.A.’s heart really isn’t into B2B with second-rate product information on its Web site (note, there has been a recent improvement).
Konica Minolta No Yes Yes Yes Yes Low CPP and TCO.  Could use revamped color MFPs.
Kyocera Mita No No No Has no products available via the B2B/retail channel.
Océ No No No Has no pretensions.  Océ has always been a production-printing oriented company and always will be.
OKI No Yes Yes Yes Has several attractive offerings, albeit most with comparatively high CPP and TCO.
Panasonic No Yes No Yes No Attractive B/W offerings with moderate CPP/TCO.  Needs color products.
Ricoh Yes Yes Yes Yes Yes The sleeper in this group, Ricoh has quietly developed a strong lineup of “SP” Aficio B2B products.  GelSprinter ink-jet printers/MFPs are strong performers but CPP and TCO can be comparatively high.
Sharp No Yes No Sharp has a three flavors of a single B/W monochrome laser MPF engine available and needs to make a decision on whether they want to pursue the B2B channel in force.
Toshiba No No No Toshiba does not sell any B2B products but has a program for its dealers that enables them to service and sell supplies for HP B2B devices.
Xerox No (does market solid-ink devices though) Yes Yes Yes Yes Xerox has a strong lineup of B2B laser printers and MFPs with low CPP and TCO ,but Phaser solid- ink printers have comparatively higher acquisition prices compared to competitive ink-jet systems.  An interesting side note is that just this week, Xerox removed the “Small Office” section from their Web site and now only features “Office” and “Production” sections.

In summary, it’s clear to us that some vendors “get it” that the B2B/SMB marketplace is lucrative and some do not.  It’s also clear that some are dedicated to their dealers to the point of no return.  How much longer do they think that offices will be willing to spend two- to three-times as much for a dealer-channel A3 product, whether they need A3 output or not?

Many office dealers also seem to be firmly convinced that they need to only sell devices that require periodic maintenance and service contracts.  Why can’t they simply be content to sell relatively maintenance-free B2B products and sit back and profit from supply sales?  And yes, these devices will eventually break and require service.

The answer to this is that dealers have invested in a huge service infrastructure that is profitable and costly to maintain and hence are unwilling to see the forest through the trees.  Meanwhile, page volume and supply sales are being continually eroded away by competitors who offer the best lineup of B2B (A4) products.

Categories: Opinions

2 replies

  1. Just had a little coapmny bring in a new Sharp MX-3110N. Within 2 hours of initial setup at the office, a fuser roller’s sleeve self-destructed. That was *after* the Sharp-prescribed method of adding the MX-3110N via Apple’s Mac OS 10.6.x Snow Leopard System Preferences Printing IPP proved to *not* work. On a hunch, the LPD method of installation did work; and Bonjour also worked; so eventually printing in color and on both sides REAL DUPLEX was achieved! Yet, the more frustrating feature, or not a feature(?), is the failure of the Address Book in the LCD display when you select it, you *do not* see a list of the contacts / entries that you have entered by way of using an Internet browser connected over your office LAN to the MX-3110N. That’s correct; the entries show in the Internet browser, but not in the Sharp’s LCD display go figure. It’s June 2011, and we are hoping that some firmware update will resolve that, sometime this summer.

    • Thanks for the report! The address book feature is dessigned to work with network address books only. Most netork printers do not play nice with Web mail and you have to build an address book manually on the device either from the control panel or embedded web server.

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