Full article “Adjacent Opportunities” was written by Brent Hoskins and published in Office Technology Magazine in May, 2019.
As an office technology dealer, are you actively looking to add to your core product offering? With customers’ needs changing dynamically, product diversification has become increasingly integral for businesses over the years. As a business, it’s important to adapt products and solutions to fit new customer needs. In the office technology industry copier dealers have an adjacent opportunity to add mailing products to their existing offering.
Adjacent Opportunities – FP Mailing Solutions [excerpt from article]
Office technology dealers are accustomed to providing products and solutions for printing, copying and managing documents in the workplace, but what about those documents headed out of the workplace? “Dealer’s customers are printing and copying information; it’s going somewhere,” says Carl Amacker, CEO of FP Mailing Solutions (FP). “There’s a high likelihood that it will end up in an envelope. From the point that it’s printed to the point that it gets into the mail stream, we provide the products and services that allow customers to do that.”
For many, FP may be solely associated with postage meters, which, incidentally, must be rented (the meter itself; not the mailing machine that houses it), rather than sold. Why is that? “Because it prints money [postage],” Amacker says, emphasizing that “billions of dollars” go through postage meters annually. “The government would like to make sure that we have a chain of command – so that we know where the meters are, how they are reset and who is using them. Because of that, they prefer that we own them and not the customer.”
However, as Amacker noted, FP provides many products and services beyond the postage meter that can be sold, including mailing machines, inserters, address printers and software products. “We help with envelope design; so, we have software that starts there,” he says. “We then follow it all the way to where we put it in the mail stream. We can help from the point that you insert it, as well as getting the addressing, bar codes and pricing right – all of the programs put in place by the USPS [United States Postal Service] in order to save money. We make it a lot easier for a customer to maximize what is ordinarily a pretty big expense – postage.”
Amacker emphasizes that the mailing business is lucrative for FP dealers. “We have a very generous program on rebates and bonuses for hitting thresholds, plus, they are going to make decent margins on equipment and supplies,” he says, noting that dealers can claim all service plan revenue, since FP does not have a field service organization. “Their technicians don’t have to go visit these customers much [given the reliability of products]; perhaps once a year. So, this industry offers very high-margin maintenance contracts.”
Like with MFPs, for the most part, the postage meter business is a replacement business. That is, most FP meters are installed as replacements of competitive meters. “If you have 1,000 customers, 900 of them probably have Pitney Bowes or Neopost meters,” Amacker says, addressing BTA Channel dealers. “So why aren’t you talking to them about their meters?”
In most dealers’ markets, in all likelihood competitive office technology dealers are not installing postage meters and the related equipment and software, Amacker says. He notes that a good place to start is with existing customers, but that dealers can also “go to competitors’ customers with a new angle, building relationships with new customers based on mailing, rather that always fighting over copiers or printers.”
About Office Technology Magazine
Office Technology is published monthly by the Business Technology Association (BTA). It provides insight and guidance to office technology dealers regarding the latest opportunities in the industry. In addition, the magazine features coverage of industry manufacturer meetings and provides information about BTA events, as well as details on membership benefits.