As office technology dealers seek to expand their services and boost growth, production print offers a promising opportunity. Offering high-volume printing capabilities can diversify revenue streams, meet evolving client demands, and differentiate your dealership in a crowded marketplace. However, before venturing into production print, it's crucial to understand the financial implications from an investment and financing perspective.

Understanding the Production Print Market

Digital transformation is driving some marketing agencies, print shops, and large corporations with a need for high-volume, high-speed production print services to rethink their document workflows. As a result, many are outsourcing or upgrading their print operations, creating a steady demand for production print services.

Market trends and data points:

• The global production printer market is expected to grow from $5.5 billion in 2021 to $7.1 billion by 2026, at a CAGR of 5.2%¹
• Digital production print volume is projected to increase by 65% from 2020 to 2030²
• 67% of print service providers report that digital printing is a growing part of their business³

For office technology dealers, this represents an opportunity to tap into a growing market by offering end-to-end print solutions. However, the transition into production print requires strategic planning, particularly regarding the financing of new equipment and service models.

The Importance of Equipment Financing in Production Print

Production print equipment requires significant upfront investment. These machines are larger and more complex, and they carry a higher price tag compared to traditional office printers and copiers:

• Entry-level production printers can cost between $20,000 to $100,000
• High-end production presses can range from $200,000 to over $1 million
• The cost of ongoing maintenance, service contracts, and potential software integrations can add 10%-20% annually to the initial investment

This is where financing plays a pivotal role. Offering flexible financing solutions not only helps your dealership manage cash flow but also makes the equipment more accessible to your customers. When you can offer competitive finance options, you lower the barrier for businesses looking to upgrade their printing capabilities, driving both sales and customer satisfaction.

Exploring Financing Options

There are several financing options available for office technology dealers venturing into production print:

1. Operating leases allow customers to use equipment without ownership, typically with lower monthly payments
2. Capital leases provide a path to ownership, often with higher monthly payments but potential tax benefits
3. Flexible payment plans can be tailored to customer needs, potentially including step-up payments or seasonal adjustments
4. Bundled solutions combine equipment, software, and services into a single financing package

It's essential to work with a financing company that understands the specific needs of the production print market. This provider should be able to structure deals that make it easy for your customers to invest in production print while also providing your dealership with favorable terms.

Financial Challenges of Shifting to Production Print

Transitioning to production print presents several financial challenges for office technology dealers:

1. High initial investment: The cost of acquiring production print equipment and necessary software can strain cash reserves. Dealers may need to secure additional financing or reallocate resources from other areas of the business.
2. Extended sales cycles: Production print deals typically have longer sales cycles (three to six months on average) compared to traditional office equipment (one to two months). This can impact cash flow and require adjustments to sales strategies and compensation plans.
3. Training and expertise: Developing in-house expertise for sales, service, and support of production print equipment requires significant investment in training and potentially hiring specialized staff. This can increase operational costs by 15%-25% in the short term.
4. Inventory management: Maintaining an inventory of production print supplies and parts ties up working capital. Dealers may need to increase their inventory investment by 30%-50% to support production print operations adequately.
5. Service infrastructure: Building a service infrastructure capable of supporting production print clients often requires additional investment in tools, vehicles, and technician training. This can increase service-related costs by 20%-30% initially.
6. Market penetration costs: Entering the production print market may require aggressive pricing or promotions initially, impacting profit margins in the short term. Dealers should be prepared for a potential 10%-15% decrease in margins during the first year of offering production print services.

Case Study: Growth Through Production Print

Consider the case of a $250 million office technology dealer that successfully expanded into production print by following a strategic approach. Initially focused on traditional office technology, the dealer recognized the growing demand for high-volume print solutions in its customer base. By partnering with a finance provider experienced in the production print space, the dealer was able to offer attractive leasing options that made it easy for clients to upgrade their print capabilities.

Over three years, the dealership grew its revenue by 20%, with production print becoming one of its most profitable service offerings. The financing solutions offered helped convert what would have been significant capital expenditures into manageable monthly payments for customers, facilitating faster sales cycles and broader adoption of the new service.

Key financial outcomes:

• Initial investment in production print equipment and training: $2 million
• Revenue growth attributed to production print: $50 million over three years
• Profit margin on production print services: 22% (compared to 15% for traditional services)
• Return on investment (ROI): 150% over three years

Why Office Technology Dealers Should Consider Production Print

By expanding into production print, you can position your dealership as a one-stop shop for all office technology needs, enhancing customer loyalty and providing a new, high-margin revenue stream. However, to do this effectively it's critical to offer flexible financing options that allow customers to adopt this technology without the burden of large upfront costs.

Additional benefits:

• Increased customer retention: production print clients typically have 25% higher retention rates
• Higher average deal size: production print deals are often three to five times larger than traditional office equipment deals
• Recurring revenue opportunities: service and supplies for production print can increase recurring revenue by 30-40%

LEAF Can Help

When expanding into production print, having the right financing company by your side is essential. LEAF offers tailored financing solutions that make it easier for your dealership to offer production print services and for your customers to invest in them. Our flexible options help turn capital-intensive purchases into manageable payments, supporting your growth and increasing the speed of your sales cycle with:

• Customized financing programs designed specifically for production print equipment
• Competitive terms to help you win more deals
• Fast approvals and funding to keep your sales process moving
• Ongoing support and industry insights to help you navigate the production print market

Don't let financial constraints hold back your growth. Contact LEAF today to discuss your opportunities and take the first step toward expanding your business into the lucrative production print market.