by Anna Wrice
Which factors are most important for a VAR to know before deciding to add a new product or solution to their portfolio? Smart VARs know that products lacking in profitability and differentiation are more trouble than they are worth.
I sat down with Eric DuPaul (HP Graphics Solutions Specialist, Partner Business Manager for the Americas) to discuss why top VARs are making serious investments into selling HP PageWide XL: 50% margins, solid recurring revenue, and entrance into markets previously unavailable to VARs.
Anna Wrice: Which VAR pain points are solved by PageWide XL?
Eric DuPaul: Making the commitment to sell the HP PageWide 4500 XL printer and MFP allow VAR’s to sell a product that has traditionally been off limits to them for years. How many VAR’s can honestly say that they have been able to sell high-volume, high-production large format printers in the past? Xerox, Oce and KIP have been traditionally off limits to all but a small groups of dealers and direct. HP has created a product to compete against these other manufacturers in a hotly contested market and have opened up the kimono to allow some VAR’s to now compete where they never could. This is a highly profitable market with printers that cost on average between $39,000 and $43,000 with a ton ink and paper revenue. So the pain point that is addressed is access to net new business, increasing top line and bottom line profitability, and gaining new customers that will also need other products such as PC’s, storage, networking and much more.
AW: How does selling this product line increase the partner’s value proposition?
ED: Since this product line is only available to select group of dealers, they will be seen as trusted HP partners and advisers to their customers.
AW: What does the revenue and profitability model look like for VARs selling the product today?
ED: HP is committed to keeping the HP PageWide XL pricing at MAP. We are heavily policing the channel that can sell this product, and the channel is policing each other. Traditionally customers that have purchased like devices in the past have paid upwards of $100,000 or more for a printer or MFP that did a lot less. So the price point of the PageWide XL 4500 and 4500 MFP quite honestly surprises customers and they are willing to pay that price for the features and benefits. VAR’s can sell these units at MAP and make a very healthy margin that runs between 18 and 22 %.
AW: How are VARs maximizing their profitability when closing PageWide XL opportunities?
ED: The real pot of gold at the end of the rainbow is the ink and paper, residual if you will. On average the printers are being used to produce 130,000 – 300,000 sq. feet of print per year. They will use a lot of ink and paper and the VAR should do everything they can to maintain customer control for that residual. The margins are between 20 and 50% depending on how they structure the deal. We have some dealers that are starting to take advantage of the aggressive lease financing at HP Financial Services. They bundle supplies into the package that the customer is leasing and they now have a lock on that client for ink, media and the printer. It makes it real easy during the lease to upgrade as new technology comes to market so the dealer can maintain that relationship long-term.
AW: When a partner is committed to ramping PageWide sales, how do HP and SYNNEX enable the VAR to be successful?
ED: What the dealers need to know is that both HP and SYNNEX have teams dedicated to helping them. They are not on an island. I encourage all of my partners to bring me into every opportunity. Let me work with the customer along-side the dealer to discover the pain points the customer has. Qualify the deal, make sure we are offering the correct solution and then help them through the sales process. Explaining to the customer that this is not a typical process takes diplomacy. They are used to just asking for a quote, placing the order and accepting the product. This is very different. It requires a lot of heavy lifting in the back office and this is where SYNNEX shines. You all have done an amazing job in setting up systems to ensure that the site survey gets done in a timely fashion. The results are fed into the team so that everyone knows what is expected on delivery day. If special rigging and handling is needed you can help the dealer find a company to do that. The shipping and delivery are all coordinated so that the customer is happy with the process. I have talked to customer post installation and they are amazed at how smoothly things went with such a complex device.
AW: Which key metrics are used by VARs and HP to determine the success of their PageWide strategy?
ED: As with any sales organization, building a funnel is key. The dealers have to get out of the comfort zone and ask about large format printing when they may be talking to the customer about buying a PC or laptop, or storage. You have to get as many at bats as possible, and then maximize those. I estimate that the closure rate should be around 60% or higher if the dealer has really worked the deal from the beginning.
Another key metric is web advertising. The dealers have to let the customers know that they carry the PageWide XL 4500’s. If you keep it a secret, well, it will stay that way. I look at websites several times a days and I am shocked at how many dealers do not have the PageWide XL 4500 on their web site. We all know people research using the internet. If the product is not easily found on your web site, they will find it elsewhere.
The obvious big metric is sell through. As HP moves into our new fiscal year on November 1, one of the biggest topics of conversation among senior leadership is accelerating PageWide technology adoption. This includes PageWide for the office, PageWide XL, Web Presses, and 3D. We need the selected dealers to put the pedal to the metal and start finding the opportunities, use the HP and SYNNEX resources to help and of course close the deals. I can count on one hand the times in my career at HP where we have literally opened up a new market for dealers. The digital sender is the only one that comes to mind. The PageWide XL 4500 is what the production market has been asking for. As I mentioned before, that market has been 100% dominated by other vendors and a select group of dealers. No longer. We have provided the solution for dealers to gain net new business that is very profitable.
SYNNEX is committed to helping you evangelize and sell the HP PageWide XL 4500 printers and MFPs. As Eric DuPaul stated in our interview, using the resources available to you is key in closing your opportunities. We’re here for you – whether you need help with a quote, finding marketing collateral on the HP Partner Portal or finding the correct HP contact. This product will no doubt move the needle for your business, so let’s get started.
SYNNEX Corporation is HP’s top distributor in the US. To learn more about the PageWide XL product line, please contact SYNNEX’s HP Business Development team: CLICK HERE