Managed Print Services (MPS) is the second-highest source of revenue, accounting for 13.2% of overall revenue. However, several office technology dealers integrate MPS in their overall A3 and A4 financials, so the actual percentage is probably higher. Taken together, the MPS and A3/ A4 (65.7%) revenue percentages add up to 78.9%.
OFFICE TECHNOLOGY COMMENTARY
The A3/A4 and MPS revenue when combined (79%) is proof of the profitability challenges that lie ahead for so many office technology dealerships. “As MPS margins thin and renewal pricing pressures mount, too many dealers continue to lean heavily on legacy or traditional revenue streams and are not broadening their portfolio of offerings as the market for A3 and A4 print products shrinks,” Cannata contends.
Offering more expansive products and services allows dealers to get their proverbial foot in the door at different account prospects.
“Consultative sales strategies are nothing new,” CJ continues. “It’s still all about trying to sell more A3/A4 business by stealing share, and leading with different things can get you there. Diversifying also offsets declines in the traditional, core document copying and printing business while increasing the sustainability and value of your dealership. The longer any dealership that is, for the most part, solely focused on the traditional core business, the value of their dealership will, in the vast majority of cases, continue to decline every day. Don’t make the mistake of assuming otherwise or that you are the exception – particularly without consulting with larger or more diversified dealers that have a high level of experience and positive reputation with acquisitions.”
Founder Frank G. Cannata adds his insight: “This latest survey shows consistency that nothing has really changed regarding the diminishment of A3. Challenges remain the same for dealers, the lion’s share of whom are holding onto those profits for as long as they possibly can. However, as we know, this strategy is not a long-term plan for business sustainability, as CJ also strongly states in more detail.”
That said, as evidenced by the 10.4% in the “Other” revenue sources (see 2024 Percent of Revenue Sources, and insights into Production Printing and Managed IT Services sections), there is ample movement and opportunity to increase profit and sustainability.
“Many dealers, though perhaps not enough, are moving in the right direction, but dealers need to accelerate the pace of change in a world where business is exponentially becoming more automated and IT-centric, whether we like it or not.” CJ states, “The reality is that the current dominant business and lifestyle technology trends are impacting virtually all SMBs across all verticals, and that includes The Cannata Group.
40th Annual Office Technology Dealer Survey Posts (Part 1 of 2):
40th Annual Office Technology Dealer Survey: Universe and Methodology
40th Annual Office Technology Dealer Survey: Executive Summary (Part 1 of 2)
40th Annual Office Technology Dealer Survey: Dealer Revenue Breakdown in 2024
40th Annual Office Technology Dealer Survey: Manufacturer Distribution
40th Annual Office Technology Dealer Survey: A3, A4, and Managed Print Services
40th Annual Office Technology Dealer Survey: Production Printing Can Improve Profitability
40th Annual Office Technology Dealer Survey: Managed IT Revenue Rose by Nearly 30%
40th Annual Office Technology Dealer Survey: Obstacles to Improving Profitability
40th Annual Office Technology Dealer Survey: Acquisition Trends
