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Dead end ahead

July 16, 2015

Volker Kappius, COO of Delacamp, discusses the decline in quality he sees in the industry, and where this might cause the aftermarket to end up.Fire hand

I like to compare our industry to the car market, because this is a market most people understand and which us Germans have a tendency to be quite good at.

As a distributor of high quality products, it is sad to see the direction in which our industry is turning. The Chinese cartridges have changed the ball game from selling against the OEM on price and quality to selling against each other on price. Value propositions like being “green”, having quality compared to the OEM and a fair discount of around 30 percent off the OEM price have been replaced by just offering cheaper cartridges than other aftermarket competitors, leaving the large remaining OEM market share vitually untouched.

This is the same as if the whole car industry suddenly focused on low-priced compact cars, locking the mid-size and luxury cars out. The problem with this is that most people want to drive (and are prepared to pay for) mid-sized and/or luxury cars! The low-priced compact cars are like the cheap but barely-funtional cartridges. The mid-size and luxury cars are the OEMs and the high quality aftermarket mono and colour cartridges. If only cheap but barely functional cartridges are available as an alternative to OEM cartridges, then it should not come as a surprise to our industry that we cannot penetrate the remaining OEM cartridge market.

The answer is clear: the wrong products are being offered. The wrong target group has been selected. You cannot sell a low-priced compact car or cheap scooter to a customer currently driving an Audi, BMW or Mercedes-Benz. But you probably have a good chance to sell a high quality “pre-owned” and maybe even “souped-up” luxury car to such a customer. Unfortunately, in our industry less than a handful of remanufacturers – worldwide that is! – have such truly OEM alternative products available.

Sadly, this trend is refelected by most supplies manufacturers and distributors in the aftermarket. They offer what is being asked for: cheap, barely-functional products rather than quality products. In an ever-changing market environment in which even big players seem to be making U-turns, it is important to have a reliable partner with a straightforward quality strategy. That is true for us at Delacamp, currently maybe the only distributor of quality products left, as it is for remanufacturers.

If 99 percent of an industry is fighting on price for a small piece of the cake, and the supplying industry is lowering their standard to accommodate the price battle, then we have to accept that our industry is doomed. If our industry does not perform a reset and returns to its pre-new-build/compatible etcetera roots, then our future is very bleak. We at Delacamp are committed to support the remanufacturers that are willing to produce, offer and sell true alternatives to the OEM. We will not lower our standards, as most others do, to accelerate the downward price spiral for components and consumables in order to support suicidally-low cartridge prices that are only targeting price shoppers.

It is a known fact: there will always be someone who is in a position, through subsidies, low labour costs, lower quality raw materials, etcetera to offer even lower prices. Our industry is divided: over 99 percent of the so-called laser imaging aftermarket vendors are chasing the current 20 percent of non-OEM cartridges users in mono and five percent of non-OEM cartridges users in colour. Less than one percent are attacking the 80 percent of OEM cartridge users in mono and 95 percent of OEM cartridge users in colour. Delacamp is committed to supporting this one percent. We ask all remanufacturers who are capable and willing to join us. As Charles Darwin wrote, “Only the fittest survive” –not the cheapest.

Categories : Special Report

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