INDUSTRY
THE BIG ASK
Counting the costs
Costs are rising for dealers across the board – from products, to fuel, to utilities. What effect is this having on their businesses’, their prices and their customers? People from across the sector tell us what they think
Nick Munton, managing
The managed print market has seen many trying to win that
director, DEOS Group
race to the bottom for a number of years in the hope of growing
The biggest challenges currently,
their mif sufficiently to the point that the sheer volume of devices
not surprisingly, are the ones that we
allows them to become profitable. The impact of COVID, the
cannot control - the price increases
repayment of CBILS, reduced print volumes and the low prices
from the manufacturers who supply
that they pitched at initially puts them in a predicament – they
us and the forecourt prices for fuel for
have to make profit to survive, but the very low margins they
our fleet of drivers and technicians.
secured the business at initially are now completely eroded so,
We have implemented some additional practices to help reduce
do they pitch the client with a 25% increase, or continue to lose
deliveries and some of our clients, particularly the SMBs, have
money and hope that the tide turns?
been understanding and accommodating of our requests to provide weekly deliveries rather than ad hoc ones.
It gives me no pleasure to say that I think we will undoubtedly see casualties this year. While the acquisitions market might be a
Unfortunately, we are a client-driven business, and those
way out for some – it is certainly buoyant at the moment with talks
clients who will not consider weekly deliveries for office supplies,
- some people are, understandably, still hoping to attract the kind
for example, can always find someone who will supply them
of exit price that they saw their business valued at pre-COVID
tomorrow if needed.
and, clearly, those values are no longer achievable for many.
Many of our clients are in similar positions, no matter their
We have been fortunate to secure the additional stock we
sector, so the increased cost conversation is not that difficult to
need to fulfil the wins from those dealers who have none, which
have. If you are at the right level within the business, then the
is a positive, but it also brings with it the challenge of manpower
knowledge, understanding and personal experience from their
for fulfilment. We are lucky enough to have some good partners
own business means that pragmatic negotiations are achievable.
for hardware deliveries for our excess deliveries, but their costs
The hardware and consumable manufacturers continue
are increasing as well, which results in further costs for us upon
to apply increases and when you combine this with the stock
installation so even positives have to be managed for their true
shortages – specifically on hardware – then there is a very
costs. I think the takeaway is that internal cost management
clear market being created that will ultimately create financial
and remaining profitable are even more key this year than they
challenges for the less robust dealers.
are normally.
[12] SUMMER 2022
www.dealersupport.co.uk
