Growing Profits: A How-To Series For General Data Channel Partners

July 27, 2017

Growing Profits: A How-To Series For General Data Channel Partners

Issue #1: Razors and Razorblades

You’ve heard of the business model of “razors and razorblades.”  It’s an analogy that illustrates the concept that, in many scenarios, the real profits are in the recurring sales (the razorblades) that an initial sale (the razor) generates.

This model could not be more true than when applied to business-class printers used in industrial and office settings.  Supplies and consumables such as labels, ribbons, ink, toner - in addition to service contracts – will often exceed the initial cost of the printer in just one year.  If you are not selling all of the “razorblades” for the printers in your existing customers’ facilities – whether you sold them the printers or not – you may be missing out on significant opportunities for additional revenue.

Let’s take a look at a couple of examples:

1. Industrial Label Printer – cost $850
Used for printing product identification labels – 100,000 per year
Label specs: 3” x 1” thermal transfer paper, standard adhesive
You sell the razorblades:

  • Labels: $500 – yearly cost
  • Ribbons: $825 – yearly cost
  • Printer Onsite Annual Service Contract: $500 

2. Office Color Laser Printer – cost $750
Used for daily printing of documents in color – 20,000 pages per year
You sell the razorblades:

  • Toner: $2,100 – yearly cost
  • Printer Onsite Annual Service Contract: $425

As you can see in both examples, the yearly supplies and consumables costs exceed the cost of the printer.  That’s where the profits are, and that’s why you should make sure you walk your customer’s entire facility and make note of each and every printer throughout the building, whether you sold them that printer or not.  Then be sure to quote – and get – the “razorblades” business for those printers.

If you sold those printers to your customer, then you should have the inside track for selling the supplies and consumables.  If you didn’t, then now is the time to start a dialogue with your customer about you being the best source for all of their printer consumables and supplies needs.

And the best part is – you don’t have to be a printer supplies and consumables expert! Just contact your General Data channel sales and product expert – they can help you ask the right questions so you can spec, quote and win more printer supplies and consumables from your existing customer base.

 

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