The Aston, Pennsylvania, dealership is speeding along on the road to recovery after the pandemic.
KDI Office Technology in Aston, Pennsylvania, like many office technology dealerships, is still finding its bearings after the COVID years. After seeing business tail off in 2020 and 2021, things began picking up last year, and this year the dealership is trending toward exceeding its pre-COVID revenues.
“I’ve told this to pretty much anybody I’ve talked to, we’re seeing deal sizes come down, meaning if they have 15 machines, they’re now buying 10,” observed Rick Salcedo, founder and president & CEO. “And the decision to pull the trigger has gone from an average of 20 to 25 days to 35 to 40 days. It’s really weird out there, but we’re holding our own.”
The dealership sells Canon and Ricoh. It’s mostly a 50-50 split, although whichever vendor offers the best incentives has an edge in any given month.
KDI Office Technology = A Family Business
KDI Office Technology is a family business with Salcedo at the helm and first-generation owner. His son Kevin is the general manager, and daughter Linda is KDI’s purchasing manager. His wife, Terry, is the company’s CFO. Two son-in-laws also work in the business as does another daughter’s significant other. Terry’s two sisters are also employed by KDI Office Technology.
The Salcedo family, Kevin, Rick, Terry, and Linda.
Kevin, who used to work in the warehouse and assist with deliveries while in high school and college, is poised to take over the business if Salcedo ever decides to step down. “As he puts it, he runs my business,” said Salcedo. “He’s pretty integral in what we do here and is involved in just about everything.”
Working together as a family hasn’t been a challenge, especially since each family member has a defined role, and there isn’t always a lot of daily interaction. “The beauty for us is it has kept us close as a family,” said Salcedo. “And we’re lucky that all of our kids live within a five-mile radius of us and are interested in and want to grow this business.”
Linda, Terry, Rick, and Kevin are all active in the KDI Cares Foundation, a registered non-profit that raises money for the community. Its largest event, Pink Ball, raises funds annually for The American Cancer Society’s Making
Strides Against Breast Cancer.
Salcedo and his team started KDI Cares Foundation, a registered nonprofit that serves the local community. The Foundation assists local charitable organizations in raising funds to support their causes through internal and external “fun” raisers, drives, auctions, and events. Its largest event, Pink Ball, raises funds annually for The American Cancer Society’s Making Strides Against Breast Cancer. In its fifth year this September.
Pink Ball was created to pay tribute to Salcedo’s late brother-in-law who was taken by this disease, while also bringing much-needed awareness to male breast cancer. Since 2018, the Foundation has raised more than $280,000 for Making Strides and has been honored as a Flagship Sponsor.
KDI Office Technology, The Early Years
Salcedo began his career with Savin Corporation in Plymouth Meeting, Pennsylvania, as a trainer and technical specialist. An opportunity to start his own business emerged when one of his accounts, a large accounting firm, wanted him to service their machines at night during tax season. After asking his boss’s permission, he was given the go-ahead to proceed since it was after hours. “Within the first two years, I was making more money during tax season than I was making the entire year working for Savin,” recalled Salcedo.
His next move was to leave Savin and start Tech Serve, a service-only company. Salcedo also had a small copy center in Drexel Hill, Pennsylvania which covered his overhead. Two and a half years after leaving Savin, the company approached him about becoming a Savin dealer because many Savin clients were calling him anyway to service their machines, and he was taking over many of those accounts. “Back then, Savin’s main focus wasn’t service, it was more of a marketing company,” noted Salcedo.
The million-dollar question for Salcedo was how does one transition from service technician and trainer to running an office technology dealership where sales are critical to the organization’s success?
“That was a struggle,” acknowledged Salcedo. “When it came to selling the equipment, I was probably losing 80% of the deals to somebody else. But typically, I got the account back because of the service.”
After connecting with a former Xerox sales rep who was also running a dealership and looking to get authorization to sell Savin, a partnership was formed, and a new company called ITS emerged. Together they grew that company from 5 to 75 employees in a little over 2½ years.
Unfortunately, that relationship didn’t pan out as their goals were different; his partner wanted to build the company as quickly as possible to sell it, while Salcedo had a long-term vision. This created friction between the two partners. “We were very big in the industry doing one billing where everything was included,” explained Salcedo. “Back then, the leasing companies would fund us for five years of service if we had five years of service in a deal. We’d be getting checks for $150,000, $200,000, and I’m trying to run a service department without recurring revenue because all money coming in was being used to grow the company.”
The company had also made three acquisitions in Delaware, which eventually was a way out of the partnership for Salcedo. The two partners agreed to split the company, with Salcedo running ITS in Delaware and his partner running ITS in Pennsylvania. It was a tumultuous time, and the relationship ended when Salcedo’s partner sold his portion of the business to Danka. Salcedo then moved back to Pennsylvania to operate what was called Keystone Digital Imaging (now KDI). When that partner, who had a 10% stake in the company, retired early, Salcedo bought him out.
Salcedo admits that to this day, he’s still not comfortable selling. That’s why he has always had talented salespeople working with him.
“My philosophy is to surround yourself with the best people you possibly can, and then support the [heck] out of them,” he said. “I’m proud we have built an exceptional team in all facets of this business, and we couldn’t do what we do today without them.” His current president of sales, Don Schatzman, is an industry veteran who excels at sales. “We’re fortunate, our average tenure in sales is 12-15 years,” observed Salcedo. “We don’t have a lot of turnover.”
President of Sales Dan Schatzman with Salcedo.
That doesn’t mean KDI Office Technology isn’t always looking to hire sales talent, but it is a struggle; sales reps with industry experience are difficult to come by because of non-competes. “Most reps don’t want to move because of that,” lamented Salcedo. “You’re stuck with getting ‘greenies’ and training them. We’ve had good luck in that regard, though. My son-in-law’s doing really well. He’s working out of our Delaware office.
“My youngest daughter’s boyfriend is working in our Horsham office, and he’s doing really well too. We haven’t had to hire because we’ve been able to grow the business with our existing reps. I have no problem compensating our reps more if they’re going to work more and continue to bring in the numbers we need.”
KDI Office Technology has six locations in Pennsylvania, including IMR Digital in West Hazleton, Pennsylvania. This was originally a 35-year-old, back-file scanning company that converted paper documents to microfilm and microfiche. Its primary customers were municipalities. “We’re doing a lot of that same business for the same clients, taking that microfilm and microfiche to digital and placing it in the cloud,” said Salcedo. “We advertised that business heavily during the pandemic.”
Another solid segment of the business is managed services, which KDI has been offering since 2000. The dealership has its own NOC (Network Operations Center) that can handle level one and two calls. It also has six reps doing field service. Some of those reps also serve as the IT department for a dozen or so clients.
KDI Office Technology’s NOC handles level one and two service calls. The dealership has been offering managed services since 2000.
Although Salcedo describes this business as substantial, he admits it’s not as big as he’d like. “I acquired an IT company in late 1999, so, we’ve been doing it for a long time. Back then, it was mostly blocks of time. Customers would buy 15 hours of service, and whenever they needed service, they would call or login, and we’d do the break-fix. We do more monitoring now.”
MPS is another thriving segment of the business, as is document management/ECM. DocuWare is KDI Office Technology’s mid-range document management/ECM solution, while Square 9 is its low-end offering. On the high end, KDI uses Canon’s document management solution, Canon MDS.
For the past 12 years, KDI Office Technologyhas partnered with Lexmark for A4. “I like their people and how they do business,” said Salcedo. When Lexmark started recruiting dealers, Salcedo told them, “If you are going to do this, you have to jump in with both feet. You can’t have one foot in the BTA channel and the other in the direct channel as some manufacturers do.”
With a solid infrastructure in place to support dealers and a willingness to listen to its dealer partners, the Lexmark relationship has turned out well and continues to thrive, and KDI Office Technology is one of the top three Lexmark dealers in its region.
The Future of KDI Office Technology
In this era of acquisitions, KDI Office Technology is an entity with plenty of suitors, especially since it carries Ricoh, Canon, and Lexmark. However, with Salcedo still enjoying what he’s doing and family playing integral roles in the business, selling is not an option.
“The only way I’d ever sell would be if I felt that was the natural next step for the company,” said Salcedo. “If we get to the point where I can’t be effective enough in growing the company, and Kevin doesn’t want to do that, and my daughter doesn’t want to do that, that would be the only situation where we would consider selling.”
Meanwhile, business continues to improve. As of mid-June, KDI Office Technology was ahead of plan for the year. “We’re running somewhere between 4 to 5% above last year,” revealed Salcedo. “We’re in good shape. We’re very profitable. We’re looking to grow. Our normal growth rate prior to the pandemic was 6 to 8% a year. Obviously, the pandemic took that back. Last year, we finished about 90% of what we were prior to the pandemic. This year, we’ll return to pre-pandemic numbers or be over by 2 to 2½%.”
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