More Reconditioned Equipment: Signs of Our Economic Times

A exclusive By Mark Vruno, MPR Portal Editor Akin to automakers, press manufacturers face the sullen fact that not very many commercial printer budgets can withstand brand-spanking-new hardware investments. That explains why still-struggling OEMs are more warmly embracing the idea of selling their own used or “pre-owned” output devices, be they conventional iron or digital presses. Why fight the online auctioneers that are so prevalent these days? If you can’t beat them, join ’em, seems to be the revamped vendor thinking – thoughts seldom uttered just a few short years ago. Like the rest of us, they’ve done the math: zero percent of zero equals zilch. Six years ago, Graphic Partners (GP), a 50-employee commercial sheetfed/digital shop in Zion, IL, bought a shiny new HP Indigo press 5000 for producing full-color, personalized direct marketing collateral. For nearly 100 years, the printer had flown undetected by most radar, until HP made a case study out of them. That was then: 2005 seems like the good, old days, after all. Despite the ensuing recession, customer demand for color variable-data printing kept growing. “We’ve seen high double-digit growth of up to 50 percent,” says VP Kirk Larsen, who adds that approximately 90 percent of his firm’s work today is direct mail. It became a capacity as well as a back-up issue, brought to painful-yet-revealing light when their 5000 went down for three days. But Larsen and his GP management team decided they couldn’t afford another Indigo right now – at least not a new model. They shopped other brands but preferred the liquid HP ElectroInk’s  high reproduction quality, he says. Eventually, the discussion with their HP rep turned toward reconditioned options, which “would allow us to compete against lower-cost alternatives to the HP technology on the light-production side,” says Larsen, whose firm is situated 50 miles due north of Chicago, near the Wisconsin border. “Chicago is a tough market for anyone,” so GP needs any and every competitive advantage it can get. Looks like new The best thing about buying the reconditioned Indigo, according to Larsen, is that there has been no learning curve. “And you’d think it’s a new press. There was no dust, no oil, the parts looked new,” he says of the pre-owned 5000r (the “r” stands for reconditioned, of course), which was installed in May. “HP even put in a new computer and RIP.” The used machine came with a one-year warranty and is being financed through HP via a short-term (36-month deal), Larsen adds. The “new” addition actually is newer than GP’s first Indigo 5000, which it originally leased but now owns. From HP’s perspective, its reconditioned “r” series presses not only give customers a lower-price entry point with an Indigo solution, but they also support the manufacturer’s overall sustainability efforts. Most HP Indigo presses are sold as leases (with the customer opting to either upgrade, return, or purchase the press outright at the end of the lease term), and HP is able to significantly reduce machinery waste through full-press reconditioning of off-lease machines. “They’re very reliable machines,” Larsen praises, “true workhorses.” His firm’s digital volume ranges between 500,000 to 600,000 clicks per month. “We do very little static color,” he explains, noting that GP uses a half-dozen different types of VDP software, from basic PrintShop Mail to sophisticated, homegrown programs, depending on a project’s complexity. “Customers today are all about measurable results and ROI,” Larsen says. To give them the qualified leads they seek, GP offers turnkey, integrated marketing campaigns. “We data-mine, drive to microsites, and even do email marketing. Customers have come to expect these services from their printers as they migrate away from agencies,” he points out. The G7- and FSC-certified firm also has two Kodak Digimasters, for monochrome work, as well as a duplicator. Larsen notes that some half of GP’s $12 million in annual sales still comes from traditional offset work. The 30,000-square-foot facility runs a pair of Komori Lithrones – a 6-color, 40-inch press with coater and a 5-color, 28-inch half size – that are about 10 years old. Larsen didn’t say whether he is contemplating replacing those with reconditioned equipment. Copyright 2011 Cygnus Graphics Media