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Dell ordering systems need an overhaul

Issue #1004/1 – Guess what? A full eight weeks after placing the order for Dell supplies from the Dell website (), the order was finally delivered! This is only eight weeks of printer downtime – what is wrong with that? Can you imaging not being able to print an invoice for your customers for eight weeks? Or print a proposal, quotation, business intelligence report, or any number of other business-critical documents for eight weeks? Having just completed a series of articles on the costs associated with unreliability, let’s consider the potential impact of not being able to print for nearly two months.

First of all, where could the impacts lie? Loss of business, delayed delivery of revenue earning services, delayed payment for services or products supplied, inability to provide critical documentation to the accountant or government revenue department in a timely manner – to name just a few.

There is no danger of a company going out of business for the sake of printer supplies not being available but it can add a highly undesirable degree of stress in a situation that can be stressful enough anyway.

If a small company has just the one printer, the options may be extremely limited:

  • The owner or an employee could bring in a printer from home (probably leaving them without a printer at home!)
  • The company could attempt to borrow a printer from somewhere. If really lucky, the local IT dealer might have a spare printer that could be loaned
  • If all else fails, buy a new printer! Guaranteed it won’t be a Dell

One of the tables in the article , included the costs of borrowing a printer to cover a failure. Let’s modify that table to compare the cost of owing and running a Dell 1235cn, with occasional supplies availability problems, against the identical Samsung CLX-3175FN – using real prices from the Dell Germany web site against median prices for Samsung supplies available from resellers.

In this instance, we’ll leave out installation costs because they should be the same for both of the machines considered here, as they are identical and provide the same installation experience. For the same reason, we’ll leave out the cost of filling paper trays and replenishing supplies.

However, we will include costs associated with the supplies acquisition process in its entirety. This includes the time taken to order supplies over a three year period of ownership and the time taken checking supplies delivery status twice a week when a problem arises, plus a couple of phone calls to Dell on each occasion and the potential costs for making other arrangements to ensure that printing can continue while the primary printer is out of action.

We can assume that the printer will have run out of toner within (say) five days of placing the order (to be fairly generous) as any sooner probably means that the replacement supplies have not been ordered early enough and some fault lies with the user.

In this example, we’ll reckon that the user is printing an average of 500 pages per month, with 70% of pages being black pages and the remaining 30% being colour pages.

Under these conditions, over the 3 year period of ownership, eight sets of colour toners will be required, 14 black cartridges, one imaging unit and three waste toner boxes.

Let’s assume that colour cartridges are always bought together as a set and also that colour sets are bought in conjunction with a black cartridge. We’ll also assume that the waste toner boxes are bought at the same time as toners. This means that there will be a total of 15 purchasing instances over three years – 14 purchases of toner cartridges / waste boxes and one separate purchase of an imaging unit.

Let’s then suppose that Dell has a problem with delivery on only two of those occasions. Then, the costs of owning and running the two machines respectively will be as follows.

  Samsung CLX-3175FN Dell 1235cn
Purchase cost €369 €427
Cost of supplies over 3 yrs (500 pages per month) €1,581 €2,461
Total cost of buying/running MFP (3yrs) €1,950 €2,888
  Cost difference +65%
Time to order supplies
(10 minutes per order)
2 hours 30 minutes 2 hours 30 minutes
Time to check delivery status
(twice a week for 8 weeks on each occasion)
2 hours 40 minutes
Time spent phoning Dell in attempt to find a solution
(twice on each occasion)
1 hour
Time spent moving a ‘borrowed’ printer (twice) 1 hour
Time spent installing drivers for 5 users
(average 30 minutes each user – not uninstalled)
2 hours 30 minutes
Time spent returning ‘borrowed’ printer (twice) 1 hour
Total time spent maintaining printing capability 2 hours 30 minutes 10 hours 40 minutes
Cost of time @ €50/hr €125.00 €533.33
Cost of phone calls say €3.00
Total cost of maintaining printing capability €125.00 €536.33
Total cost of owning AiO for 3 yrs €2,075.00 €3,424.33
  Cost difference +65%
Printer downtime Nil ~14-16 weeks

Note that for this level of machine, the mixed mono/colour CPP over three years shown in the accompanying table is calculated on the basis of 500 pages per month; 70% pages in mono and 30% pages in colour; is based on the use of maximum capacity supplies; takes into account any standard, or starter, supplies shipped with the device; and also includes the cost of purchase. Dell pricing is obtained from the Dell Germany web site while Samsung prices are Median Street Price, with tax, sourced in Germany.

Not only does this example show that owning the Dell device is normally far more costly than owning the Samsung device – even to the point of the hardware costing more in the first place – but that the costs associated with experiencing delivery problems from Dell just twice in three years push the final costs way, way up above the cost of running the Samsung device (assuming there to be no comparable problems acquiring Samsung supplies from resellers). And, what we have not included here are any potential extra running costs associated with borrowing, or hiring, a replacement printer for the periods of downtime.

Overall though, quite frankly, a cost premium of 48% for buying and running the Dell device (ignoring the cost implications of any failure to deliver) should be enough to deter any user from buying Dell. By the time that cost differential can rise to 65%, if Dell has regular availability problems, then the suggestion of maintaining a flexibility of supply by buying in the channel becomes very, very attractive.

One other point that is worth noting here is that the pricing used for the Samsung hardware and supplies is a ‘median’ of prices available in Germany. This means that 50% of the resellers are selling the items at a price lower than the prices used here, giving users significant opportunities to reduce their Cost of Printing even more than indicated here, thus increasing the percentage savings achievable.

In the handling of these delivery issues, Dell has demonstrated that it holds customer satisfaction as a very low priority, with no ability or desire to find a solution other than tell the customer there’s nothing they can do and that the items will be delivered as soon as they become available.

Dell appears to consider itself above the problem of delayed income and cash flow – or maybe Dell is just so big that it has fallen into the trap of complacency where no-one else matters because the company is able to absorb a minor cash flow hiccup. After all – Dell’s printer customers will still have to buy toners won’t they? Or will they?

IF, and I mean IF, Dell customers decide that they will keep their Dell printers for the duration, they are very likely to move to buying supplies from the channel in the future after an experience of this nature. They might even be prepared to pay a premium for NOT buying direct from Dell. In the long-term though, they are more than likely to avoid buying from Dell at all. As indicated in the article , and reinforced here, a much better financial deal can be achieved on exactly the same hardware by buying the Samsung model.

Perhaps Dell should take note of Lexmark’s troubles over the past few years, where inkjet hardware sales fell through the floor and supplies revenues followed. Although there is no proof, I am convinced that Lexmark users were ditching their hardware without buying new supplies and moving on to hardware from other manufacturers. If Dell cannot redesign its ordering and delivery systems to allow for part-shipping in certain circumstances, then Dell printer customers are very likely to vote with their wallets and move to the use of hardware from more reliable sources – and those that put a high value on their customers.

No channel player would adopt the Dell customer service philosophy or approach to customer satisfaction.

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