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Strength in Numbers
When independent reprographics firms in Germany, Switzerland, and Austria faced competition from chains, they formed a network to compete.
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go4copy.net
The go4copy.net network covers the German-speaking countries in Europe.
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Victory!
A cover of the Reprograf, the magazine of the German reprographics association, celebrates the demise of competing chain operators.
By Ed Avis
In 1990, as Germany was celebrating its reunification, reprographers in the former West Germany and other countries smelled opportunity in the former East Germany. There were some existing reprographics businesses there, but 45 years of communism had put them far behind their Western counterparts.
“Gold rush fever was spreading,” said Achim Carius, executive director of motio, the German reprographics association, during his presentation at the 2015 ERA/IRgA Convention in Atlanta in April.
From Fever to Headache
However, before long the gold rush fever turned into a headache for Carius and the independent reprographics firm owners who make up his association’s membership. The cause of their suffering was chain operators. These chains, such as Koebcke, Reproplan, Reproprofi, and Reprotechnik, established footholds in the former East Germany and elsewhere. Another chain operator was also a supplier: Xerox had 24 Xerox Center copy shop locations at its height.
“These reprographic chains sprang up and made life difficult for locally operating, traditional reprographic solo firms,” Carius said.
By the mid 1990s these chain operators were presenting a serious threat to the survival of some of the independent reprographics shops. The primary competitive advantage of the chains was that they could offer single-source service to large customers with multiple locations. After all, in addition to Xerox’s 24 locations, Koebcke had 14 locations, Reproplan had 18, Reproprofi had 13, and Reprotechnik had 26.
The motio association leaders knew they had to do something to compete against the chains.
“The members of the association asked the management of the association openly to declare war on these chains that were taking their business away from them,” Carius said.
The motio leadership decided to strike with a strategy that attacked the chains’ key advantage: They would form a network that emulated the chains’ ability to service large customers with multiple locations.
A Network is Born
Carius and his colleagues visited reprographics chain locations across Europe, and eventually assembled a plan for their network based on the concept of “im Verband starker,” or “together we are stronger.”
They knew that the proud independent members of the association wanted to remain independent, so the structure could not change their ownership situation. Instead, the network – named www.go4copy.net – was designed as a quasi-corporation that would be owned in partnership with those members who decided to join.
The plan was ironed out and formally presented to the association’s general convention in 2003. They voted in favor.
“In order not to draw members away from the association, we established in the articles of incorporation that every go4copy.net member must also be a member of the association,” Carius said. “That prevented the association and go4copy.net from growing apart.”
Membership in the new organization was offered to all existing members of motio, and the most active members joined, paying a fee of just under $5,000 US. Members joining since 2005 pay about $8,000 US.
Today the group has 31 member companies representing 70 locations in Germany, Austria, and Switzerland.
“That makes go4copy.net Europe’s largest digital printing and scanning provider,” Carius said.
Sales Network
The key to go4copy.net’s success is its ability to leverage the network and sell services to large companies that don’t want to deal with multiple, small shops.
Carius explained that when the group was first formed, they hired a salesperson to drum up business among large potential clients. But that didn’t work out, as the salesperson was effectively reporting to 31 bosses.
Today, instead, network sales are initiated by individual members; when a client asks for service outside that firm’s geographic area, go4copy.net negotiates the deal and coordinates the service among members. If the network does not have a member firm in a location that requires service, reprographics firms that are members of motio, but not go4copy.net, can be tapped for assistance. The revenue for the sale is divided appropriately among the shops involved, and a commission of 3 to 5 percent goes to go4copy.net.
“Over the years we have concluded sales framework agreements with large nationwide customers such as the national railway company, Siemens, Allianz insurance company, and numerous construction companies,” Carius said. “We managed to win these back from the large reprographic chains.”
go4copy.net also has preferred software, hardware, and media suppliers. When a member orders from one of them, the organization receives 3 to 5 percent of the sale.
The members of go4copy.net attend mandatory quarterly meetings in different locations throughout Germany, at which they discuss customers, on-going projects, and business in general. The organization is run by the same three-person administrative staff in Frankfort that runs motio.
Beating the Competition
The network has achieved its aim. In the years since go4copy.net was founded, all of the Xerox copy shops have closed; Koebcke has gone bankrupt; Reproplan has shrunk to just five locations; Reproprofi sold a dozen of its locations to employees; and Reprotechnik has gone through two bankruptcies.
“That proves that we made the right decision 12 years ago,” Carius said. “We not only fought back the chains, but also helped 31 association members with 70 locations stay alive.”