The Fork in the Road: To Thrive or Disappear is the Office Equipment Channel’s Choice

When I first came into the channel back in the early 2000s, it was entirely by accident and at a time when it was facing some serious challenges. The level of competition for those making and selling remanufactured toner cartridges was forcing lower prices and margins. But as our channel has shown time and time again, we were ready to meet the challenge and to evolve our practices. I experienced (and like to think contributed to in some small way) the birth of managed print services, or MPS.  We learned to sell contracted pages instead of cartridges, and this unique business model created a boon of fresh revenues and margins for nearly two decades.  

When customer needs have shifted over the years, we’ve always risen to the occasion and done quite well. If there is any channel that has proven it can turn vexing challenges into big opportunities, it’s the office equipment channel.  Most recently, as user workflows changed to include fewer printed pages, we adapted to sell related services like document management, scanning workflows, and rules-based models to improve print related security and costs.  During the pandemic, we even survived a downturn of nearly 80% of the pages we relied on to keep the doors open.  I honestly can’t think of another channel that could experience that kind of fiscal trauma that would come out the other side and survive. 

But now is not the time to celebrate our victories over adversity. Here we are in 2023, and we are in the midst of some of the most daunting challenges we’ve ever faced.  Some of these fast-moving changes could actually make or break the office equipment channel. In order to deal with these gargantuan challenges, we must first decide what the most important ones are.  Here I offer my 2 cents on areas we need to focus on if we are not only to grow as a channel, but also simply to survive. These are the four big trends I don’t think we can afford to ignore:

Billing by pages

There was a time when page printing was on the rise.  The printed page, until recently, had always been an integral part of an organization’s workflow, of getting business done.  We used pages to consume information, to codify contracts and to ensure legal compliance.  But the era of the physical page is facing decline, which is nothing you don’t already know. So, in a cost per page world, decline in pages is decline in revenues.  This has led to new models of managed print in flat rate or “all you can eat” models, which though not dominant, are gaining steam in 2023.  But even a new business model isn’t the savior in this story. Technological advances and shifting attitudes have caused the printed page to gradually lose its dominance and no billing model on earth will change that. 

Emerging generations, “digital natives” who have never lived a day in their lives without access to the internet and screens, are more comfortable handling their business affairs digitally, and the advantages are stark: digital documents are easier to search, store, and distribute. This doesn’t mean we’re heading toward a paperless world overnight, but the trend is quite clear and so is the lesson: Pages alone won’t help us to thrive.  Yet, there’s opportunity in this shift. If we think of our role not as selling printed pages but as managing and optimizing information flow, we can find new ways to provide value. 

A digital page still requires management, storage, and protection. It still needs to be accessible to the right people at the right time. We can provide and bill for services to make this easier and more secure, and many reading this already do. Secure digital document storage, modern search-based retrieval systems, or even consulting services to help organizations streamline their digital workflows are all there if we’re ready to offer them.

We also live in a warming world and people are looking to reduce their carbon footprint. There’s money in that.  We can leverage our knowledge of the printing industry to offer sustainable printing solutions for organizations that still require physical documentation. By advocating for efficient printing practices, we can reduce unnecessary printing, saving costs for businesses while contributing to environmental sustainability. These measures, while seemingly peripheral to our main business, will enhance our relevance in the evolving market landscape.  And we can charge for this in an “as a service” model.

Aging owners

The office equipment channel is also seeing a demographic shift in its leadership. Many of the owners who began their businesses in the heyday of the printed page era are nearing retirement. This is a potentially disruptive event as it brings up the question of succession. And not every business succeeds on passing the torch: According to estate-planning firm The Targeted Strategies Group, only 30% of family businesses survive to the second generation, and by the third generation, that drops to less than 12%. The next generation of leadership will need to bring a different mindset to the table, and equally important, understand that we support them in that mindset. They will need to understand the legacy business while also navigating the rapidly changing landscape of information technology (which is way cooler than copiers and printers FYI). I’ve had hands-on experience with leaders in many of these diversified channels offering new technology services.  Our younger leaders will need to dive in head-first to evolve our businesses, and we need to have the foresight to allow them to do so.

As the guard changes, it’s crucial we inspire those who could potentially take over. The new generation of leaders should be well-versed not only in the traditional business model but also in the emerging trends that are reshaping our industry. Mentoring programs could be implemented to facilitate the transfer of knowledge and skills from the older to the younger generation for our bread-and-butter offerings. This would help maintain the invaluable expertise we’ve gathered over the years while simultaneously preparing us for the digital future, no matter what that looks like.

Bonus: This is an excellent opportunity to infuse fresh ideas into our business. Young leaders, with their familiarity with digital technologies, can bring innovative solutions and strategies to the table that our aging brains could miss altogether. By fostering an environment that encourages new ideas and initiatives, we can ensure that our businesses remain agile and relevant.  We’ve done it before and we can do it again.

Diversification options

 Many reading this have already started investing in diversification to make up for page declines by adding managed IT services to their portfolios.  But, in my opinion, it’s a hard road. “Managed IT” doesn’t really serve the same customers we built our channel on.  We serve customers with complexity and scale. Managed IT is typically offered to those that are small and often without dedicated IT staff.  To make matters worse, a lot of the very constructs of devices managed by managed IT providers are shifting away from in-house to the cloud.  It’s bad enough that we are having an existential crisis in the world of the printed page, but when the options we are looking to for salvation are too, well, that is a pickle.

I take inspiration from dealers I consider mentors, and two come to mind that have really nailed diversification: Jeff Bendix at Bendix Imaging and Chip Miceli at Pulse Technologies. Jeff went all in on cyberscurity, and Chip has seen big growth in display technologies.  Both have grown their businesses thanks to these successful diversification options, and we can learn from them.  First, cybersecurity and display technology are offerings that are consumed by current customers. Instead of chasing new wallets, we can get more out of the wallets we already have access to.

Looking at these success stories, it’s evident that diversification doesn’t have to mean veering away from our core customer base. Instead, it’s about finding new ways to serve the clients we’ve already established relationships with. This strategy of “inward diversification” is a powerful lesson for us all, offering an exciting avenue for continued growth and success. By expanding the scope of our services to meet the evolving needs of our current customers, we not only solidify these relationships but also boost our potential to succeed in our succession planning efforts.  Of course, the options for diversifying are many and complex. We also need to understand the growth opportunities and whether or not the options we choose have a long runway of growth trajectory left. 

Artificial intelligence

And then there’s the promise and challenge of Artificial Intelligence (AI). As many reading this know, I’m a huge fan of generative AI and how it can help us to be more productive, and in new ways.  I formed the AI Explorers Group, which meets weekly to discuss AI use and developments, and I also offer training on “AI Awareness” for businesses. Whether you know it or not, AI is being used in your office right now, by somebody, or by many somebodies.  Understanding how AI works, use cases for your business today, as well as how you can develop good AI governance guidelines is something you need to do right away.  If you don’t, you’re missing out on some huge productivity gains in your marketing and sales efforts.  Just as important, gaining an understanding of AI and building good policies around its use in your office can better protect private information and intellectual property (IP). The question of when and how to use AI is a delicate balance, but one that we’ve proven capable of maintaining before in the age of the printed page. 

In my view, and the view of other thought-leaders in our channel, the generative AI revolution is likely the biggest opportunity and challenge that we face.  At the time of writing, I’ve been working with Mike Stramaglio of Stramaglio Consulting, Michael Cozzens, formerly of Visual Edge, Brian Evergreen, previously of Microsoft, and Greg Walters at Greg Walters Inc., on developing some powerful AI content and breakout sessions for the Executive Connection Summit (ECS 2024).  Our diverse backgrounds in the channel and our shared belief that AI is the most important shift our channel has ever faced will ensure that the next ECS will be unlike any event you’ve attended before. It’s one you won’t want to miss; this I can guarantee.

Of course, the most potent tool we have to navigate through the waves of change in the office equipment channel is our relentless pursuit of growth. We are pioneers, pathfinders, trailblazers – no one excels quite like us at discovering opportunities and transforming them into profitable ventures.  It’s time to roll up our sleeves with renewed enthusiasm and determination; that’s what has always defined us.  Let’s roll up our sleeves and get to the hard work of transformation. 

West McDonald is the founder of GoWest.ai, a firm respected for its work in the realm of artificial intelligence and business strategy. His journey in the AI industry is marked by a  passion for innovation and a commitment to equipping businesses with the latest in generative AI technologies with an eye on workflow and customer experience. Through GoWest.ai, West and his team specialize in crafting bespoke AI strategies, ensuring companies are not just prepared for the future, but actively shaping it.