Tell me again why I want to sell hardware...

Back when I started selling copiers for Lanier I'll never forget when the VP of Sales came into our district office and practically bragged about how we actually loose money by selling hardware and that service is where we make all of our money.

I was fairly young and naive at the time and just figured, well they must know what they're doing since there is this big business built on this idea.

As I've stayed around the industry for a longer period of time it seems to be one of the more universal beliefs...you're going to loose money selling the box and make your money servicing it.

What I couldn't understand back at Lanier, and still think is ridiculous, is why otherwise successful business would intentionally choose to continue a wholly unprofitable line of business! Let me get this straight - you're making 50% margin on your service but losing 10% on your hardware and you believe that this is a solid business model?!?

I've asked the question within my own company (which is hardware driven), and it seems to be something no one has ever considered. It is just accepted that you have to sell the box to be able to service it.

Well, as we all move toward MPS hopefully we can throw that garbage out the door.

How about a new idea? Let your competitors sell the hardware (and lose money in the process) while you service it (and make all the profit).

Can't be done, you say??

Sure it can. Just go call 3 copier dealerships telling them all you want to do is buy a copier without service and watch the rabid dogs come running at you with quotes.

Sooooo, tell me again why I want to sell hardware...


P.S. This was written on Sunday morning. If you see my resume as the next post you will know that this message was not received well by my own organization.