Find Your Niche In The Document Scanner Market
This VAR increased hardware sales 100% in 2008 by refurbishing and reselling used equipment to economically challenged customers.
Business Solutions, May 2009
What prompted Imaging 411’s innovation was a problem. In late 2007, the VAR found that the economy was forcing customers to cancel projects and reduce budgets for equipment and solutions acquisitions. According to Gary Armstrong and Joe Paradiso, customers were calling, but they weren’t buying. “We were being asked for alternative solutions so that customers could continue to satisfy the requirements of their businesses,” says Armstrong. The VAR’s solution was to begin offering refurbished scanners and capture solutions. This eventually led to the creation of a new company, Scanner Traders. The new company purchases, refurbishes, and sells preowned scanners and lower-cost capture solutions. In addition, the company developed a bundled solution that includes a preowned certified scanner and a PC preloaded with capture software.
A good example of the problem many customers face and the VAR’s solution can be seen with one of its service bureau customers. The customer contacted Scanner Traders looking to open a new location, but could not afford the price of new scanners, software, and support. Scanner Traders’ preowned solution was affordable enough to allow the bureau to open the new office. The end result was the purchase of preowned KODAK i830 high-volume scanners and KODAK i260s with capture software at about 1/3 the cost of a new solution. Whereas Scanner Traders could have missed the sale altogether, the preowned equipment led to a $50,000 sale. And, as a satisfied customer, the service bureau has purchased additional scanners since.
According to Paradiso, there are other companies out there selling used scanners. However, Scanner Traders has a couple significant differentiators. “We’ve taken selling preowned equipment a step further by offering direct maintenance support and a warranty on the used equipment via Imaging 411,” he explains. “Our existing competition primarily acts as a broker between a seller and buyer. There typically hasn’t been any refurbishment done to the equipment, so the purchaser is getting the scanner as the seller left it.” Scanner Trader gives a 90-day ‘like new’ warranty and offers its support for extended warranties. Some scanner manufacturers only offer a 90-day warranty on new equipment, so customers aren’t losing anything by purchasing a refurbished scanner.
To be able to offer preowned equipment, Scanner Traders (initially Imaging 411) did have to make some changes to its business. First, the company had to acquire an additional 2000 square feet of inventory space to warehouse the preowned equipment. Additionally, Imaging 411 technicians were initially splitting time between companies, performing the refurbishing tasks as well as handling service for Imaging 411 customers. As the business grew, some of those technicians became full-time Scanner Traders employees, requiring new hires for Imaging 411.
Armstrong and Paradiso also learned a lesson early on in the creation of the new product/service offering. Initially, the two planned to fill the preowned equipment gap by offering hardware only. However, they soon realized that despite a lower budget, customers still needed a complete solution. Therefore, Scanner Traders added software and professional services to its product mix. “We assumed that our customer base would be companies that already had a solution in place and were looking for replacement hardware,” says Armstrong. “However, we found a lot of customers were starting from scratch looking for an entire solution.” Indeed, what Scanner Traders found was customers could buy a better refurbished scanner as opposed to a lesser model new scanner. The result was a 100% increase in hardware sales for the VAR in 2008.