Issue #0735/2 - Xerox offers free ink again for buyers of solid ink printers, representing a perceived saving of up to 56% of the cost of the hardware.
Xerox is backing its ground-breaking low Cost of Printing business model, announced with the new Phaser 8860 solid ink range in September (Issue #0730 – "Has Kyocera met its match as Xerox turns the clocks back 20 years?"), with a special offer of a free set of inks with the purchase of a model from the Phaser 8560 range (printer and MFP).
With a free pack of inks for each buyer, the printer ships with around 5,000 pages-worth of ink instead of the normal 2,000 pages-worth. The free ink pack contains 3 sticks of each ink, equalling half the volume of a normal pack (which contains 6 sticks).
Although this doesn’t make a huge difference to the Total Cost of Printing, 5¼% (at 2,500 pages per month over three years), in monetary terms, it does mean that the user does not have to buy a pack of ink quite so early in the life of the printer, delaying the purchase by just over a month.
In point of fact, the delivery time of up to 28 days for receipt of the free packs means that, in reality, the free ink will simply supplement stocks purchased shortly after purchase rather than delaying that initial ink purchase. However, it is the up-front perception of saving by the customer that is the significant factor.
For instance, the out-of-pocket saving represents something like 56% of printer hardware purchase or 21% of MFP hardware purchase (typical store price).
Especially for printer customers, this level of saving is attractive because it is visible up front. The same argument also applies to the special offers Samsung has been running on its CLP-300 laser printer, where the free toner represents an out-of-pocket benefit equivalent to about 65% of hardware purchase, based on prices in Staples, as used in the comparisons in recent issues of TCPglobal.
Offering the same features as the Phaser 8860, the Phaser 8560 solid ink printer is the model sold under the traditional printer sales model where hardware is sold at lowest possible costs with the manufacturer’s profit accrued through sales of the supplies. Therefore, supplies for the Phaser 8560 are sold at a much higher price than the supplies for the Phaser 8860 – which was launched at ground-breaking Cost of Printing levels.
Note that the offer is not available on purchases of Phaser 8560 models purchased with Xerox’s PagePack contract. The other major restriction is that the offer is not valid on purchases made through a negotiated bid process unless its inclusion is specifically negotiated as part of the bid and Xerox has issues its approval in advance.
As interesting as the offer itself is the fact that this offer is managed directly by Xerox Europe and claimed by returning a post-purchase request form by mail, fax or email to the company’s priority fulfilment centre at Grâce-Hollogne in Belgium.
From the reseller’s point of view, the only action required is to use the offer as a sales-attracting marketing tool and then to verify the registered purchase for Xerox.
With the offer being fulfilled in this way, Xerox obtains a benefit that is worth at least as much as the potential for increased hardware sales. As indicated, each and every claim is made by the submission of a claim form direct to Xerox, meaning that Xerox has a record of every customer buying the printer within the time-frame of the offer.
In effect, the offer is not only a financial incentive to buy the machine in the first place but also a financial incentive to register the printer with Xerox and submit ownership details to the company. In addition, it links customers with resellers and seeks permission for Xerox to send further sales and marketing information to the customer.
All of these offers help to underline just how desperate manufacturers are to get their hardware into customers’ offices so that the long-term benefits of ongoing supplies sales can be maximised.
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