Office Document Strategies Blog

Canadian Postage Meter Rental - 5 Challenges to Success

Posted by Lee Kirkby on Thu, Apr 5, 2012 @ 10:04 AM

Canadian Postage Meter Rental   5 Challenges to SuccessPostage meter rentals can be confusing to purchasers.  Bluntly, the industry tends to set the whole system up in a way that confuses many buyers.  In designing a solution for clients we find we spend much of our time advising them on how the system works and what to look for in their contract and deal.  Some of the stories we have heard about dealings in this area are horrendous.

Only once this discussion has occured do we get to spend some time on the attributes of the respective postage meter they might like to rent.

So why all this confusion?

I don't think it is entirely without intent. After all, there are only three choices for a postage meter rental in Canada.  You have to get one from Francotyp-Postalia, Neopost or from Pitney Bowes.  FP and Neopost both use dealers in some areas and direct sales in others.  Most PB postage machines are acquired direct from the company.

This is the first issue that creates some problems.  Dealers tend to get closer to their customers since most of them handle multiple types of office equipment and they hope to provide their customers with more than just postage machines.  The direct sales operations however, are primarily focused on the postage market and try to acquire the maximum dollars out of the one transaction.

The second issue is the frequency of the transaction.  In general office equipment and the IT space we see leases that are usually three to four years long.  In the postage space sixty-six month rentals are very common with sixty months being the bulk of the rest.  This means purchasers do the analysis for postage very infrequently and are subject to the input of the sales force more readily.  This is why we have published our guide to postage meters in Canada to assist potential purchasers with learning more about what they are getting into.

The third issue is the aggressive deal making which the three manufacturers engage in.  Frankly, they wheel and deal to get the contract and then try to renew it early (often as much as two years before expiry) to try to freeze out any competition and consolidate their prescence in the account.  Very often these early rolls do not reflect the best value for the customer as the carry over is not declared and no comparison occurs.

The fourth issue is the general ability for the equipment to handle the work.  Postage meters are pretty robust devices and if properly sized to the account they should last the term of the agreement without a lot of issues.  Support is commonly part of the plan offered so little incentive is there to change devices mid term.  This encourages long term deals.

The fifth issue is the relative stability of the product.  Only recently has there been a push to apply new technologies to the devices. After all they seal an envelope, calculate postage (if they have an integrated scale) and print it on the envelope.  That's the bulk of the task required.  For most SMB offices the only real question is the absolute volume and how automated you want your feed mechanism.  That's it.  The rest is all about the contractual relationship you are entering into. 

Unfortunately it is the contractual relationship that gets pretty confusing.  Check out our guide to postage meter pricing to lunderstand just what is included in the pricing for the contracts.  When you do rent a postage meter, keep a copy of your signed contract and know when it renews.  This becomes very important when you get approached for a change sometime during the term.  Make sure it is legible.  You would not believe the poor quality of some of the written contracts we have seen.  If you don't know the timing, I can almost guarantee you will get pitched an early renewal you may not need, which can cost you significant money over time. 

Check out our blog post describing the impact of an early renewal on copiers, 'You could pay $9000 more than necessary.'  Postage can be exactly the same.

Declaring my biase as I am a dealer of equipment, if you have the option of dealing with a source who takes a more personalized view of your needs, then you should consider it seriously.  The potential long term relationship with a dealer is much more likely than with the manufacturers direct.

That's 5 simple challenges which can come together to make what should be a fairly straight forward decision difficult.  Find someone to help take you away these challenges and your postage meter rental can go smoothly.

Do you have a postage meter rental success story? How about a horror story?  What would you advise?

Share your thoughts below.

Lee K

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Photo Credit:  Public Domain Wikimedia Commons

 

Topics: Postage meter, meter rentals, postage machine