Would you take this offer?

S

Stickman42

Well-known member
We’re finishing up year 4 of a 5 year lease on an Iridesse (which we’re very happy with), with a $1 buyout. Our Xerox rep is offering the exact same machine on a new 5 year lease at a higher monthly payment, but with much lower click rates FIXED for the 5 years. Based on our volume, it looks like we can save a significant amount. The only variable I can think of is the tariff surcharge they added earlier this year. Of course this needs to be jammed in by the end of the year. Thoughts?
 
Our lease on our Iridesse is over early next year. Very curious what direction you decide to go with yours. Were thinking of going a different direction away from Xerox. The service calls are so much slower these days the last year or so. Sorry but can't help with your question because I have no idea what we pay for ours.
 
I would weigh it based on your current satisfaction with Xerox, reliability of the machine, and competitive offers. Would you keep the same machine or would they install a new one? I personally am ready to swap out a machine at the end of the lease, before it starts to be a headache.

I always negotiate fixed click rates for the term.
 
kslight said:
I would weigh it based on your current satisfaction with Xerox, reliability of the machine, and competitive offers. Would you keep the same machine or would they install a new one? I personally am ready to swap out a machine at the end of the lease, before it starts to be a headache.

I always negotiate fixed click rates for the term.
Click to expand...
We've been with Xerox for decades. While their service/support has declined over the years, our relationship with the techs has always been very strong. We also have Canon equipment and their guys are under the same stressors.

The proposal is to take our existing machine in on trade and install a new one with the exact same configuration. The current machine is performing well for us. On paper it seems to make sense to go with the offer. Historically though, we've always looked forward to the day that the final payments are made on a piece of equipment. This feels like we're getting on the perpetual lease cycle.
 
On your original post, do you mean a significant saving outright?
So is the difference in reduced click, based on current monthly average volume, covering the proposed monthly lease payments?
 
pippip said:
On your original post, do you mean a significant saving outright?
So is the difference in reduced click, based on current monthly average volume, covering the proposed monthly lease payments?
Click to expand...
The savings would be over the 5 year term. With the reduced click being fixed vs. the current higher click plus potential annual 10% increases and the same volume expectation, the analysis looks to cost us $60k less over the 5 years. Are there smoke and mirrors I'm missing?
 
Sounds like they are trying to do an FMV style lease with your printer that you will own in a year. How much are they giving you for your existing printer? Make them write everything out, they will try to hide numbers and just show you your final payment.

Other vendors now have access to that same model to sell so I would check around and get some other quotes and check out the service from the other vendors.

Xerox Holdings Corporation (ticker XRX) ends its fiscal year on December 31

Use that to your advantage if you stick with Xerox.
 
Shawnd said:
Sounds like they are trying to do an FMV style lease with your printer that you will own in a year. How much are they giving you for your existing printer? Make them write everything out, they will try to hide numbers and just show you your final payment.

Other vendors now have access to that same model to sell so I would check around and get some other quotes and check out the service from the other vendors.

Xerox Holdings Corporation (ticker XRX) ends its fiscal year on December 31

Use that to your advantage if you stick with Xerox.
Click to expand...
Yes, a FMV lease is what they're offering. We have a call out to the salesman now to expand the numbers to show the value of our trade in.

I think I heard Fuji is selling it direct. Do you have a contact for them? Is anyone else rebranding it? I'd try to get a quick proposal.
 
Sounds like the 'vendor' is happy with their current rate of return on the product OR they know something you don't about future costs if they are willing to lock in 'better' numbers.
Be blunt.
Ask 'Why?'

Also -

I am assuming you've got your compare / contrast spreadsheet set up already for 'other vendor' comparisons.

Do you have access to the the spreadsheets you built when you were thinking of the Iridesse originally?
Did you factor FMV vs $1 Buyout previously? And how would that have impacted you now?

So what comes to mind could be lease end legalese but might be important to include in the contract as we are still experiencing industry consolidation/contraction.

What recourse/options do you have if Xcompany sells your contract through any means?
(Ricoh sold our Service contract - we had no recourse - but they still provided supplies for click charge.)
Do you have an early buyout option? They normally force you to maintain to lease end.

YMMV
:cool:
 
Looking at their stock price over the past few years and even months I would be concerned. Pay and attorney to make sure that you have a damages clause in the service contract in case Xerox service gets to be unusable. The Gist is, if Xerox cannot service your machine within the SLA they either have to pay you damages (ie, reimbursing for another printshop doing jobs you can't do) and/or hire an alternate service provider at their expense. If sales rep pushes back, point to the XRX stock ticker.

Also see if Fuji has a viable counter offer for the same machine.
 
Thanks for all the insights everyone. For now, I've asked for more detail on how they structured the pricing, in order to get clarification on the value of my existing machine.
 
One other note.
Call me a cynic BUT we all (most?) have recently seen that vendors of most stripes are consumed with the bottom line, which isn't a bad thing IF they still give two hoots about their customers which has been somewhat problematic (lol).
Leading to the current topic.
I will say some appear to be trying to weather the storm but I am not on the frontlines anymore so . . .
 
Stickman42 said:
We’re finishing up year 4 of a 5 year lease on an Iridesse (which we’re very happy with), with a $1 buyout. Our Xerox rep is offering the exact same machine on a new 5 year lease at a higher monthly payment, but with much lower click rates FIXED for the 5 years. Based on our volume, it looks like we can save a significant amount. The only variable I can think of is the tariff surcharge they added earlier this year. Of course this needs to be jammed in by the end of the year. Thoughts?
Click to expand...
I think it would be helpful to see the numbers and your average monthly volume to really play out the full scenario. If you're on a $1 buyout, that means you'll own the machine and no longer have monthly payments in ~1 year. Sure, your click charge may remain higher than the new plan, but you won't have the machine payment. I'd prefer not to have a machine payment because then you're not out any money on months where business is really slow.

And yes, Fuji is selling direct now. You can click on the "Request a Demo" button at the top or the "Contact Us" link at the bottom of this page.
 
We reviewed our usage history. Our 5 year projection is that our volume will be the same. Based on the lower, fixed click charges, we would come out ahead, plus refresh the equipment. I understand the unknown about Xerox's stability, but we need to partner with someone. Having been a Xerox customer for 40+ years, we're comfortable continuing with them. Besides, me being 59 years young, I'm not too enthused starting anew with a different vendor. I am trying to reach Fuji anyway, just for at least one second opinion.

The plot thickens: while analyzing our usage/billing history, we discovered that our annual click increases (10%, 10%, 12%) exceeded the contracted 4% max allowable increase. We're going to go through the last 3 years of invoices and should recoup enough to make the FMV buyout on the new machine (which they now fixed at $13k).

We haven't signed yet, but the install needs to be done by the time the ball drops. Typical Xerox end of year crunch...
 
Stickman42 said:
The plot thickens: while analyzing our usage/billing history, we discovered that our annual click increases (10%, 10%, 12%) exceeded the contracted 4% max allowable increase. We're going to go through the last 3 years of invoices and should recoup enough to make the FMV buyout on the new machine (which they now fixed at $13k).
Click to expand...
You should negotiate a fixed click rate for the term of the lease if you get a new machine. Just about every manufacturer will offer this to earn/keep your business. I understand not wanting to switch from Xerox due to not liking change, but it is worth it to at least get quotes from the other brands just to make sure you're getting the best deal. If nothing else, it will make Xerox sharpen their pencil to meet/beat the other vendors.
 
jwheeler said:
You should negotiate a fixed click rate for the term of the lease if you get a new machine. Just about every manufacturer will offer this to earn/keep your business. I understand not wanting to switch from Xerox due to not liking change, but it is worth it to at least get quotes from the other brands just to make sure you're getting the best deal. If nothing else, it will make Xerox sharpen their pencil to meet/beat the other vendors.
Click to expand...
THIS^^^


Here's a Fuji rep for some of the US
"Stacy Lackie" <[email protected]>

Digital Print Specialist, Western U.S.

Cell : 509-979-1918
AK,AZ,CA,CO,HI,ID,MT,NM,NV,OR,UT,WA,WY,
 
jwheeler said:
You should negotiate a fixed click rate for the term of the lease if you get a new machine. Just about every manufacturer will offer this to earn/keep your business. I understand not wanting to switch from Xerox due to not liking change, but it is worth it to at least get quotes from the other brands just to make sure you're getting the best deal. If nothing else, it will make Xerox sharpen their pencil to meet/beat the other vendors.
Click to expand...
They did include a fixed click rate for the lease term.

Regarding the other brands, I'd feel ok about talking with Ricoh and Canon, because of their presence in my area. I run approx 140K 11 x 17 10 pt. C1S per month (book covers) on my Iridesse. Which models from the others are in the same class or can handle the work easily enough?
 
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