Interesting Xerox 700 Issue...

[ShortRunMagazines]

First of all let me say I ABSOLUTELY LOVE our X700. It was installed on Dec 12, 2009 and as of Feb 15, 2010 has 430,000 12x18 clicks on it. The thing is very stable and handles text weights very well. (Cover stocks are not great but it is "fast plastic" and not a X5000.)

A little Background... We are a new company (1 year old), and are a web based sales model. We started on 3 KM C500's and got those up to 100,000 (total) 12x18/month. A Global Imaging Xerox Dealer shows up and wants to put us into a X-Box... I knew someone that had a X700 with this dealer and they seemed pleased enough so I listened. I showed them the volumes, said I was willing to commit to 100K clicks (single click 12x18) per month and let them know that financing was going to be a "challenge" (as the ownership didn't want to Personally Guarantee anything). They proposed a 12-36 month "rental" that would be converted to a Lease once the company was old enough to be approved for a lease (over the 2 year mark). Price was a bit high on the monthly payment (10% or so over market lease payments) but we decided to take it based on the 4.6/cent click rate (we were at 5.4 so it was a $900/month savings right there).

That being said... My interesting problem. The Dealer feels they are "funding our business" because they claim to be losing 2K a month on our machine. (PLEASE NOTE: As of January 30, 2010, we have already paid them $17,000+ in clicks and pre-paid rental payments.) We usually receive the paper invoice a day after the check cleared the bank so we aren't a "slow-pay/no-pay". Despite the fact the contract says it is not cancelable until month 12 (with a 90 day written notice) they say they want to pick up the unit. They implied that if we are willing to pay 7.5 cents/click we can keep the unit (a 60%+ increase from the contract rate). They claim our Toner usage is way beyond reality. Based on the data provided by the dealer, We are averaging:
8,340 clicks per Black cart
7,710 clicks per Cyan cart
6,492 clicks per Magenta cart
6,326 clicks per Yellow cart
I know the cart's are "supposed" to average 20K, but that is LTR size, not 12x18 and who really averages 7.5% coverage on Print for Pay Color?

My idea... have Xerox Direct service the unit if they are unwilling, however they say they can't because they are authorized to service that unit. Anyone heard of a Xerox dealer having Xerox Direct service/supply a unit that they sold (when they are capable of servicing it themselves)?

The dealer has already started "hindering" our shipments saying things are backordered and such. We've been waiting on a Black Dev Unit and Developer Drive Motor for approaching 2 weeks and it "still hasn't come in". (I tried to introduce them to UPS Express Critical...)

I would appreciate your thoughts on the subject and any ideas or experiences you have had. I am trying to avoid getting the lawyers involved, but I am out of "better" ideas...

[Mark H]

The issue is with the contract your dealer gave you. If they allowed you 12x18 on a single click at 4.6 and you're painting the thing solid they are loosing money. That their tough luck. If the show was on the other foot - you paying for more than you're getting - they surely wouldn't give you a refund, or allow you to cancel your contract early.

Bottom line - hold the dealer to their contract.

Mark H

[X33]

Whatever is in that contract is what matters.

I've never heard on a situation like yours, giving you that rental flexibility until your business is credit worthy for a lease. It's definetely a risk that the dealer took, and they are probably hurt now based on your toner usage. Since the unit belongs to the dealer (Global Imaging), I don't think Xerox Direct can support it (it may be against policy).

Just out of curiosity, why don't you contact Xerox Direct and ask them to try and get you credit approved for a lease. There are different programs inside Xerox that dealers or 3rd party vendors don't have to get new businesses (less than 1 year) credit approved.

[RKS]

Xerox is still experiencing problems supplying toner on the 700. Magenta & Cyan seem to be the problems right now. Things though can be done to eliminate this by keeping a couple of weeks supply on the floor and then if you run short, get them to expedite the order.

[wildcatt]

sounds like your dealer took a chance on your usage and lost.
We pay $0.10 p/click all in. That's a drop of $0.05 from our last contract with a 240

Hold on to that $0.04 as long as you can - that's a sweet deal. Even at $0.076 your still in a good position.

[ShortRunMagazines]

Unfortunately 7.x is not a sustainable click charge. We are competing in the .com market and the margins are very thin. Average sale price with labor, overhead, bindery, paper, shipping, and printing is somewhere in the $0.13/LTR Side range.

I have an offer on the table from KM for a 6501 but am hesitant due to the reliability of the X700...

I know the supplier is not experiencing major backorders on toner as the other shop I know was able to order toner without issue.

Is it true that drums that don't reach end of life (i.e. dies at 30% usage) can be sent back to Xerox for a replacement?

[RKS]

Our color click charge through Xerox is .049 (No matter what size sheet)
Our black click charge is .0129 (same)

Sometimes the drums do not last to 0%, you just replace them when the copy is starting to have problems. Sometimes if you replace them too often you have to get a Xerox technician to order them for you. They do it, no questions asked.

[Stochastic]

Oh goodie

If you have any issues with your "dealer", wether it is click rate or finance based
invoke your 2-up rule and deal with the State rep.

If you are not happy or are unclear about the arrangement you have with Xerox then
ensure you bypass the local dealer and take the issue up with the manager of the state you are in. As you can see other companies have arrangements that are different bsed on
their business model.

In reality, and I mean the real world people not just America, Xerox should develop with you the correct financial structure for your business based on your volumes and kind of work you are producing. I mean, come on, you obviously do large coverage prints, It seems logical to me that you should be charged per click based on SRA3 size/largest sheet size.

In terms of toner usage, I would take a look at the Image transfer adjustmens on the custom paper profiles and stick with the old adage that "less is more".

You may find to produce the same level of coverage and color consistency that dropping the value of toner, even by 20%, you will still achieve the correct color and coverage.

The toner on your page shouldnt be so thick that even a blind man could read the image.

Xerox prides itself, (from our experience), on putting the problems you have right.

hmmm... remember the Total Satisfaction Guarantee???




Happy printing.

[ChuckH]

do yourself a favor and at least talk with a RICOH Rep (not a dealer since by and large they don't service them) about the C900. 13x19 @ $.049 and Black @ $.005 is doable. If you want productivity (and at 215k/month you need it) and versatility in output you'll get it here at 90 pages/minute and a new slowed up version at 72 per minute from the same mainframe. FTB registration of .5mm! Full disclosure - I sell em!

[X33]

Is it true that drums that don't reach end of life (i.e. dies at 30% usage) can be sent back to Xerox for a replacement?

They are sent to Xerox for recycling. You can order a new one if you have a Xerox Full Service Maintenance Agreement - FSMA.