🖨️ 💼Deep Dive: Insights from the 38th Annual Dealer Survey


I’ve been following Scott Cullen and the Cannata Report for over a decade. The survey has become a touchstone for the industry, outside the typical industry analyst purview, offering real-world, from the trenches experiences and feedback. This year is no different; indeed, the latest edition sheds light on new perspectives and supports our suspected notions.

Scott summarizes this year’s survey:

Although there weren’t many surprises in this year’s survey compared to previous years, what was surprising was the number of dealers participating. We received responses from 348 dealers, the most ever. It’s funny, the more the industry shrinks in terms of the number of independent dealers, the greater the number of dealers that participate in the survey. That’s been the trend for the past two years. When I first started at The Cannata Report seven years ago, the number of survey responses was in the low to mid 300s.

Another surprise was the number of dealers with yearly revenues over $100 million. This year 16 dealers reported revenues of more than $100 million. We expect that number to rise next year driven in part by at least three dealers in this year’s survey whose revenues were in the $90 million range.
In terms of revenue, despite the supply chain issues of last year, they’ve been on the rise. After seeing the average yearly revenue drop from $16.3 million to $15.3 million two years ago because of the pandemic, last year the average yearly revenue grew to $17 million. This year saw a modest increase to $17.2 million. If that isn’t an indicator of a healthy industry, I don’t know what is.

Overall, dealers were positive about the future of the industry. If there were any negative feelings, most of those came from smaller dealers with revenues of under $5 million who face an uncertain future.

If you want to read negative comments, you’ll find those in Part 2 of our survey in the November issue, when we ask dealers to rate their OEMs and leasing partners. Those comments come from dealers large and small. Many of the negative comments were driven by supply chain problems and poor vendor communications. Of course, it’s not unusual to find one dealer bashing their A3 hardware vendor’s communications and another praising them.

Next year we plan to revamp our analysis in different parts of the survey, such as breaking our analysis down by focusing on different regions of the country and different dealer revenue ranges. For example, one of our readers asked us to compare the dealers with $100 million or more in revenues, examining how many sales reps they employ, revenue per sales rep, and involvement in such areas as managed IT and production print.

After reading the article on the findings of the 38th Annual Dealer Survey, readers should be able to answer the following questions:

  • How has the shift from traditional print services to digital and cloud-based solutions impacted the office technology industry, as indicated by the declining concern over print clicks among dealers?
  • What are the key challenges and opportunities facing the office technology industry in terms of diversification of services and maintaining profitability, based on the survey results?
  • How is the office technology industry evolving in terms of competition dynamics, particularly in relation to the relationship between dealers and manufacturers’ direct branches?

Here is our take on the 38th Annual Dealer Survey –

Navigating Change: Insights from the 38th Annual Dealer Survey

In an era marked by rapid technological shifts and evolving market dynamics, the office technology industry stands at a pivotal crossroads. The 38th Annual Dealer Survey, spearheaded by Scott Cullen, offers a comprehensive lens into the industry’s current state and future trajectory. Here’s an integrated analysis of the survey’s key findings:

The Decline of Print Clicks: Capturing the top spot in dealers’ concerns for the fourth consecutive year, the decline in print clicks, flagged by 36% of dealers, marks a significant adaptation to the digital era. This shift, accelerated by the pandemic and the rise of hybrid work models, reflects a broader industry transformation towards digital and cloud-based solutions. The 18% decrease from the previous year in this concern indicates a gradual acceptance and strategic pivot away from traditional printing.

Challenges in Hiring and Retention: The survey highlights a 6% decrease in concerns around hiring and retention, now at 29%. This shift suggests a post-pandemic stabilization in the labor market. However, it underscores the ongoing challenge of attracting and retaining skilled staff, particularly in sales roles, a critical factor as the industry evolves to encompass emerging digital solutions.

Easing Tensions with Manufacturers: A notable decrease in concerns regarding competition from manufacturers’ direct branches (down to 16% from 30%) signals improved relations between dealers and manufacturers, possibly due to better collaboration and pricing strategies. This trend suggests a changing competitive landscape, where differentiation and specialization become key.

Profitability and Diversification: With a significant drop in concerns about maintaining profitability (down to 11% from 40%), the industry shows signs of stabilization. Concurrently, the growing focus on diversifying product and service offerings, albeit still a minor concern at 8%, highlights an industry in strategic transition, seeking to mitigate risks and tap into new market opportunities.

Diverse Strategies Among OEMs: The survey reveals varied levels of concern among dealers affiliated with different Original Equipment Manufacturers (OEMs), indicating diverse market strategies and specializations. This diversity points to a healthy competitive environment, fostering innovation and customer-centric solutions.

Record Participation and Revenue Trends: The highest-ever survey participation and an increase in dealers with revenues over $100 million mark a trend towards industry consolidation. This consolidation suggests a future dominated by larger entities, reshaping the competitive landscape.

Optimism and Resilience: Despite the challenges, the modest increase in average yearly revenue to $17.2 million reflects the industry’s resilience. The general optimism, especially among larger dealers, bodes well for the industry’s future.

Future Survey Enhancements: Plans to offer more detailed analyses in future surveys, focusing on different regions and revenue ranges, promise to provide deeper insights into the industry’s evolving landscape.

Looking Ahead: It’s evident that the office technology industry is navigating a period of significant transformation. As you know, the shift from traditional print services to digital solutions, evolving labor dynamics, and changing competitive landscape are all indicative of a sector that is responding dynamically to the rapid technological advancements and shifting business needs.

Continued diversification in services and solutions, greater emphasis on digital technologies, and potentially more mergers and acquisitions are likely as the industry consolidates further. Dealers who can adapt to these changes, invest in new skill sets, and offer a broader range of services will likely emerge as frontrunners in this evolving landscape. The industry’s demonstrated resilience and adaptability suggest a future that is dynamic and robust, albeit with its own set of new challenges and opportunities.

Two notable participant highlights:

Increased Participation and Shrinking Industry: The survey witnessed its highest-ever participation, with 348 dealers responding, despite the overall shrinking number of independent dealers in the industry. This trend of increased participation has been observed over the past two years.

Revenue Insights: 16 dealers reported annual revenues exceeding $100 million, a significant figure indicative of substantial growth in certain segments of the industry. The average yearly revenue has also seen an increase, growing to $17.2 million this year, which signals a healthy state for the industry despite past challenges like the pandemic and supply chain issues.

Greg Walters, Head Writer