Office Equipment Sales Good
KANSAS CITY — Nearly a third of office equipment resellers gross from $2 million to $5 million annually.
Roughly 20 percent have gross sales from $5 million to $10 million, while another 20 percent have sales that range from $1 million to $2 million each year. About 15 percent of resellers, however, reported that their gross sales top $10 million annually.
Whatever their annual sales figure might be, most seemed pleased with their position in the marketplace. Nearly three-quarters of all resellers said their dollar volume rose over the last three years, while only 7 percent reported that sales had fallen over that same timeframe.
These findings, and many more, come from the Business Technology Association (BTA) and its 2003-04 survey of member companies.
“Their business probably hasn’t increased as rapidly as it has in past years. The economic downturn has been a challenge for everybody. But people still need to replace their office equipment. Businesses can’t do without their printers, copiers, and facsimile machines,” said Robin Keller, BTA director of marketing, in a phone interview.
Keller explained that the growth BTA members have experienced was largely due to the advent of more efficient office products.
“Our industry has done a good job of presenting an integrated solution to their customer bases. So as the equipment has evolved into copy-print-scan technology all in one device, and actually saves their customers money with these new and integrated solutions,” she said.
The BTA, based in Kansas City, polled its 918 active resellers last fall and 299 of them took part in the survey for a response rate of 33 percent — a high participation level.
BTA members handle a wide range of merchandise. They sell copiers, fax machines, personal computers, mailing and shipping equipment, local area networks, general office equipment, office supplies, office furniture, document-imaging equipment and computer software. A reseller often specializes in one or two of those items.
Respondents overwhelmingly said digital copying machines were their biggest sellers, 63 percent reporting that the machines produced the largest portion of their annual revenue. In comparison, just 4 percent named faxes and only 1 percent cited personal computers as their biggest revenue generator.
“Because of the change in technology, analog machines are not being made any longer. Our core members, when they’re selling and servicing products, are typically selling digital and digital-connected products connected to a network,” said Keller of the copiers.
“Analog machines were workhorses, but not user friendly and capable of doing the types of finishing work that digital products now can do, obviously driven by the software.”
Although computers aren’t the money generators they once were, 53 percent of all the firms said they still sell PCs and PC products. Six of 10 office furniture resellers even said they sold computers.
In PC products, most resellers focus on hardware, networking services, peripherals and maintenance, followed by software and supplies.
Two-thirds said PC products and services account for 10 percent or less of their annual sales, while 15 percent said these sales were worth from 10 percent to 25 percent of their revenue.
Clones, HP, Dell and Compaq, in that order, were listed as the resellers’ preferred manufacturers.
Apple wasn’t named in the survey.
Slightly more than 40 percent of BTA members conduct business with small businesses, specifically those with 10 to 49 employees.
Only 7 percent reported that they serviced large companies with 100 to 999 employees, while just over 1 percent said their customers were corporations with at least 1,000 employees.
The ‘typical’ reseller has 51 full-time employees.
Those known as value-added resellers employed the most at 110, while those that sold general office equipment had the fewest at 14. Companies that sold digital copiers had the second-largest work force with an average of 63 on staff.
The average reseller employs nine sales representatives, 13 service technicians, three installers and two trainers.
The average BTA member has been around for a while, having established the business in 1971.
None of the respondents reported opening their doors after 1985, while five firms that sell office furniture said they had been in business the longest, all operating since 1939.