The information on this page should help in establishing the cost of your current equipment and assist in determining the cost of a new copier.

When planning for a replacement copier it is advisable to do a few calculations that will give an indication of the Total Cost of Ownership (TCO) of the machine over the planned life cycle and to translate this to an effective net cost per copy.

Such calculations will enable you to:

• compare the cost of operating your existing copier against the anticipated cost of the new machine
• will provide a means of comparing the range of machines on offer from bidding suppliers;
  give an indication as to the suitability, in economic terms, of the chosen copier for your organization
• determine the relative cost of different financing options (i.e. purchase, lease or "click charge" copy plan)

Components that make up the total cost
Fundamentally, there are two major components that contribute to the cost of owning and operating a copier.

Capital Component (lease/outright purchase) + Copy Charge

Capital Component
This can either be -

1. The purchase price of the copier plus options;
2. The leasing cost, spread over the lease term.

In the case of a purchased item, it is advisable to spread this over the anticipated or planned "life cycle" of the copier. Generally this will be three to five years. A good rule is to plan for “four” years or sooner.

Leasing
For leased copiers, there is a financing component to be considered that involves interest rate factors and allowances for the residual value of the copier at the end of the lease period.

Leasing is slightly different to rental in that the customer is generally required to pay out the residual value and assume ownership of the copier at the end of term.

Copy Charge (maintenance) Component
Most photocopier suppliers charge a copy charge rate (i.e. cents per copy) that is applied against each copy done on the machine. This usually covers the cost of toner, parts, drums and general preventative maintenance. The copy charge is generally billed separately (typically monthly) by invoices compared against periodic meter readings. The copy charge does not include the cost of paper or staples supplies.

Copy Plan Agreements (click charge)
Most photocopier suppliers offer an alternative method of financing the cost of owning and operating a copier. This is by establishing a Copy Plan Agreement (commonly called a "click charge").

The mechanism for establishing a Copy Plan Agreement is relatively simple. The supplier effectively adds -

• the total cost of leasing the capital component of the copier, over the full term.
• the copy charge for to the total number of copies contracted to be run over the full term.

- They then divide the sum of these two components by the total number of copies to arrive at a net cost per copy (click charge rate).

The crucial factor in determining the click charge is the total number of copies.

What is a reasonable cost?
The best benchmark that can be established to compare copier-operating costs is the net “cost per copy”. This is the effective cost per copy when spreading the total number of copies to be run over the full term or life of a machine (i.e. capital + copy charge).

The net “cost per copy” will depend on a number of factors including -

1. The correct matching of copy volume to speed (size) of machine.
2. Whether the photocopier is to be networked and includes all connectivity costs.
3. What features are included on the copier (paper bins, stapling units etc.).
4. The planned life cycle of the copier (i.e. the longer you run it to amortize the capital component cost, the cheaper the net cost per copy). It is advised that you plan for a 4 or 5-year term.

How Desert Business Machines Can Help:
As technologies advance, their acquisition costs decline. But this doesn't mean that you should always invest in the fastest and most powerful solutions with all the bells and whistles. In fact, the greatest point of overspending and cost seepage occurs when document imaging equipment is UNDER-utilized.

Desert Business Machines will help you to identify appropriate new technologies that are right-sized to your document output environment to maximize utilization and minimize costs of operation. With complete objectivity, we will recommend solutions that will minimize your total cost of ownership.

The next step in achieving “Costs Reductions”
Companies spend up to fifteen percent of their operating revenue producing and managing documents! Imagine the savings to your bottom line if you could reduce those costs just one percent!

The first step in cost reduction is to shift higher volume output from more expensive desktop printers to lower cost networked printer/copiers. Clients in high print/copy volume environments have saved thousands of dollars monthly by following this strategy. According to Consumer Services, "Cost savings will increase to the degree that page volume can be shifted from printers or fax machines to a copier printer, even factoring in the higher cost for a connected copier printer versus a standalone copier."

When we consider overall cost per page, copiers triumph, according to a study of Fortune 500 companies conducted by Hewlett-Packard. The study reveals that the average all-inclusive cost-per-impression, including hardware, service and supplies, is 9.6 cents per print, 20 cents per fax image and 2.6 cents per copy." The Business Consumer's Advisor (February 2000).
The next step is to take advantage of payment plans that further reduce costs. Our Cost-per-copy (print) full service maintenance plans include equipment maintenance and supplies including toner!

For clients who do not expect much variation in print volumes on a monthly basis, it is most cost-effective to commit to a targeted monthly volume at a standard monthly rate and assume overage charges for each print/copy over that volume. If your print volume is consistent month-to-month, your overage should be minimal, and you can predict with certainty your document production costs.