Jun (06-03) - Going to school on IBMJune 6, 2003 Editorial
Lexmark Corporation has done what I suspected they would do. Long ago we learned a hard lesson from IBM. They (IBM) had a bad habit. They would snuggle up to the third part in order to seek our assistance to sell their products. There were dozens, maybe hundreds, of "IBM Business Partners" and the margins were never worse. Slowly IBM increased the requirements, effectively squeezing their "partners" with onerous stock levels, reporting requirements, etc. Over time, the number of partners decreased to a favored few who somehow can sell to the dealer community at "dealer cost" and still make a profit. Sounds like quite a trick. All those dealers who had ramped up their businesses in order to support their new partner status quickly found themselves in financial trouble. The overhead required to support the partner program put many dealers in a tough squeeze. Downsizing is never easy, but IBM had made it necessary. Now it seems that Lexmark has learned from Big Blue. It has suddenly discontinued their LexTrade trade-in resale program. A few dealers chose to participate a couple of years ago and had committed to large warehouses, support staff, and infrastructure to support the large quantities of gear coming back form Lexmark's aggressive trade-in program. Now it seems that Lexmark doesn't want to do that anymore. Ouch. Not only will they not be sending the trade-in gear back to the dealer community, it seems that they intend to part it down. Gives new life to old parts at higher-than-market prices, but hey, its their choice. Keeps it off the market so Lexmark doesn't have to compete against their own gear. While I understand their interest in doing this, I don't agree with their methods of pulling the rug out from their "partners."
The upshot is that I expect prices to rise as parts and whole machines become marginally more scarce. Don't laugh. Market prices can actually go up, but don't expect for drama. Rising prices are very hard on the dealer community as scarcity creeps up on already shallow margins.
A large end user cleaned out all the remaining end of life IBM 1140 product. It's too early for these models to come to market used, so if you were hoping to pick up some, consider the Lexmark T620. Same machine but (unfortunately) different toner chips....Rumor has it that IBM intends to add an internal ethernet IPDS feature for the 4247 line. As you may know from my previous columns, there are others who sell the same machine made by CompuPrint in Italy. I and others in the market are amazed at how aggressively IBM is pushing the 4247 line over their own more durable 4230 line. Considering how "plastic-y" the 4247 is, it must be very profitable. Clearly the 4230 is a far superior machine and IBM's promotion of the 4247 is a bad way of taking care of the customer. Take our advice. Stick with the 4230's, or consider the Tally T6050 or PSi 806. They are more durable, easier to maintain, and a heck of a lot better constructed.
A popular, if expensive, dealer network has made another attempt to make sure those that advertise their parts and equipment really do have it. With their new Certified Stocking Vendor program (CSV) the CSV member will guarantee that the inventory they list is in-stock and ready to ship same day. These vendors all agree to follow clearly defined rules about their stock and agree to random "spot checks" of their inventory. I do wonder whether the dealer network will really do spot checks, but I think its a move in the right direction. Since the collapse of the CDLA (Computer Dealer and Lessor's Association) some years ago, much of the industry's "honor" has eroded. I hope some self policing by industry listing companies will once again hold us all to a higher standard.
HP's newest 4000 series, the 4300, seams out of place in their numbering conventions. At 45ppm one would probably expect it to be in the 8000 or 9000 series. I think the popularity of the 4000 series explains why they would want to put it in there. SUre, the speed is great, but again, the toner is where the game is. Please consider the IBM 1300 series. The toner costs are less expensive than the HP 4300. Of course HP will sell a ton of them, as the "give the razor to sell them the blades" routine continues to find new victims. We like the Optra S2455, and or the S1855's-- the toner is cheap.