"More small office home office (SOHO) businesses are buying their printer and fax devices from large retailers, whose low overheads and bulk buying power are determining the street prices for entry-level office automation," says Marc Pillay, Minolta South Africa laser printer division product manager.
Pillay says large retailers have minimal overheads and use their general staff to sell their office automation products. "They also have the capacity to buy in bulk - 500 to 600 units at a time - something the average reseller cannot afford to do. This advantage allows large retailers to push prices down and makes it difficult for small dealers to compete," he says.
While retailers do not offer support services to customers buying printers and faxes, some vendors of the product, like Minolta, offer support and backup for products sold in retail outlets. Pillay says it`s a win-win situation for the end-user, but cautions that users should do their homework first and establish which vendors offer comprehensive back-up services. "Not every vendor has the same infrastructure as Minolta SA, with outlets and dealerships in just about every corner of the country," he says.
Pillay says small to medium businesses (SMMEs) are likely to continue buying devices from their existing supply chain because they need more specialised input and around-the-clock support. "They need the relationship with the dealer because downtime on a device means a loss in productivity," he says.
Pillay says retailers have more credibility for office automation and IT users than in the past. "The large retailers are continually reinventing their images, space and concepts to keep up with changing consumer trends and many large retailers boast dedicated IT and office automation spaces which instil confidence in consumers, who believe they are dealing with professionals," he says.
Major retailers are also a force to deal with when it comes to advertising. The ever-present advertisements and inserts in a wide variety of daily and weekly publications make major retailers hard to compete with.
Pillay says the South African market is all about price. "If your price is right, then there will be queries about quality, support and total cost of ownership. The majority of South Africans, contrary to their European counterparts, are not concerned with quality before price. Price is king and the rest follows," he says.
This is evidenced by the large number of inkjets still be sold to the SOHO market. Pillay says although inkjets have improved their technology and consumables are not as expensive as in the past, they still do not produce the same quality as a laser printer.
"For inkjets to come close to laser quality, users need to use special paper at a cost of about R2 per page. This ultimately affects the TCO of the device - something the South African market tends to overlook because the upfront price is right," he says.
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