It’s interesting that the recoverlostprofits.com website seems to be taking a similar approach.

…not over here we`re not!! Read below…
A Berkshire school paying £450,000 for 5 copiers, a commercial in Buckinghamshire leasing the same equipment through two companies simultaneously,a large PLC with a £300,000 service agreement settlement for cancellation. This is wrong and we are doing something about it….
The purpose of the BuyersBuddy is simple – to deliver large financial savings and contractual protection to our clients in the murky world of Photocopiers/MFP`s/MFD`s/Managed Print Services etc through expertise and trade price supply. Our Contract Surgery will identify the existing cost and contractual problems and then set about solving them. We intend to turn this dreadful industry inside out using a passionate dose of honesty and transparency that has been sadly lacking for many, many years.

Alan Hale

1- you will absolutely OWN your customer
2- you will absolutely have NO competition
3- you will absolutely make more MONEY than you can imagine in this industry

Recover Lost Profit’s Founder left the industry over 10 years ago in disgust of this practice and has since been recognized in the nation’s court system as an expert in helping it’s clients protect their best interest instead of their vendors.

If you want to proactively ensure your vendor is a true business partner, then check out what key questions you should be asking at http://www.recoverlostprofits.com

Xippa is the United States premier Copier Contract review and negotiation company that works exclusively for the customer to level the playing field and get end users exactly what they bargained for. All fees out of savings. I have attached the link to an Article I wrote for the Photizo Group which focuses on the importance of proper contract structure for both the copier lease and service agreement.

http://www.xippa.net/photizo

Service agreements tell you more about the supplier than you can ever glean from a smiling salesman and they should be studied in great detail and amended heavily prior to signature. This may and perhaps should alter your choice of vendor.

Photocopier Service Agreements accompany every new photocopier acquisition, whether you lease or buy, but without very careful attention paid to the small print they can have a major impact on your future costs and freedom of choice.

Restrictive terms will provide the supplier with more control over your next Photocopier upgrade than you realise.

If you don`t have access to independent contract experts please consider the following common terms and conditions and final scenario we have detailed below.

1. Agreed copy volumes – This means you are committing your school to producing a specified number of copies. You can`t predict the future so what happens if you wish to move the machine to a lower volume area or your volume halves ? Your stated copy cost of say 0.5pence becomes 1.0pence! If you are below the minimum copies for one period do they provide an under-usage credit for the next….NO!

2. A 60 month Service Agreement – This will tie you to the supplier regardless of performance. What if the service is appalling or the supplier changes the type of machines it supplies thereby diluting its expertise, or they go bust and the Agreements are bought by a third party. What control or choice do you have over who services your equipment? In any event medium/high volumes machines are changed on average every 36 months so what`s the point of a 60 month service plan?

3. Annual increases – of up to and sometimes higher than 10% are common but did you know that combined with a 60 month service agreement your copy costs will compound increase by 60%, based on 10% hikes, by the end of 60 months!

4. Cancellation Clauses- These are very common and are often buried near the end of the small print and will reference either the Agreed volume or your historic average volume. The supplier will then be entitled to a penalty payment if you wish to cancel which is usually thousands of pounds and for service/toner/parts they won`t be providing!

5. Exclusions – Look out for toner and some parts exclusions either in full or part. Watch for toner included up to a certain density, often as low as 6%, after which you can be charged. Some major parts are excluded after say a 12 month period which then cost thousands. If you are unlucky enough to have a contract that excludes toner completely this can double your unit copy cost depending on how much the supplier is charging but he does have a captive audience…

The nightmare Scenario

You sign an agreement, knowingly or otherwise, for 60 months, including 50,000 copies per month @ 0.5pence per print with 10% annual increases. After 36 months the service is poor making the machine unreliable,your staff are banging on your door for a new one, you are doing only 30,000 prints per month, you have had three 10% increases and you have 2 years left not just on your lease but your service agreement too. You would like to change supplier but they are demanding a penalty of 50,000 copies x 0.67pence x 24 unexpired months if you wish to go elsewhere.
That’s a genuine catch 22 situation! Pay them £8,040 plus vat for service they won`t be providing or carry on with the dreadful experience and sign another lease with them for new equipment. How competitive do they need to be!!!

http://www.buyersbuddy.org
http://copiercons.blogspot.com

If you think the lease period of your photocopier agreement is irrelevant you could be in for a nasty shock. It is extremely common to be offered a 60 month lease, often with a matching Service Agreement period and it appears more attractive because the quarterly/annual costs seem lower. They won’t be for long. A 60 month lease can lead to a slow suffocation of your budget, equipment quality and future freedom of choice

Medium/large photocopiers are changed on average every 36 months and not every 60 months. That means the next time you change the balance of 24 months is added to the new 60 month period and refinanced. Therefore you have paid 60 months’ leasing company interest for the privilege of keeping the equipment 36 months. Had you leased the equipment over 36 months you would have saved two years’ finance interest.

It gets worse.
After 36 months you now have a situation where the equipment needs changing and instead of being at the end of a 36 month agreement you have 24 months remaining which is added to your new equipment cost and financed again.
This is where the quality of your equipment and its reliability begins to suffer. You now need to replace the equipment over the same term, ideally at the same cost, but with 24 months outstanding on your existing lease which is 40 per cent of the original contract. How can you upgrade all the equipment for the equivalent of 60 per cent of the original lease cost? You can’t.

The supplier then puts a proposal to you that only upgrades some of the machines because otherwise you won’t accept his offer as the costs to replace all would rocket. This means some of your original equipment has to last another 60 months until the second lease expires. This is virtually impossible and now you are on an ever increasing cost and unreliability spiral that becomes very difficult to manage.

This is all because the salesman, who knows the average life of his photocopiers, has taken the line of least resistance with his first agreement by proposing a longer, “cheaper” term. His advice should have been: “Don’t sign a 60 month agreement.” It is worth knowing that salesmen earn commission when they change your lease so they are happy to change it as often as possible. They know you will have to upgrade regardless of the term of your lease and they may also have asked you to sign a service agreement with restrictive terms that compound your problems with settlement penalties.

Below is a comparison based on a £10,000 photocopier replaced every 36 months on three occasions using 36 month leases and another replaced every 36 months but using 60 month leases again three times. Look at the difference and whilst doing so bear in mind that the 60 month lease was supposed to be cheaper.

1.Cost using 36 month leases =£34,200.00
2.Cost using 60 month leases =£42,001.20

So for the privilege of leasing the same equipment over 60 months and not 36 months you put an £8,000 dent in the budget which is nearly the cost of the equipment you first leased. How is 60 months cheaper?
http://www.buyersbuddy.org