BEF would bring in a unit and offer for sale in one of three ways: as-is, cleaned up or fully refurbished.
The markets for these machines were both domestic and overseas. Domestically, entrepreneurs looking to get into the minilab business without the bucks to purchase a new system would use re-sellers like BEF, or a few dozen smaller rebuilders or brokers, as their supply source. The overseas market was an important one for refurbs with low purchase price again the common denominator. South America, Eastern Europe and Africa were major users.In the BEF training center.
So long as there was a market for refurb machines, both locally and overseas, the value of used machines stayed healthy. Dealers could easily think in terms of getting $20,000-$25,000 for a used system, depending on model and condition. BEF would refurb and re-sell these units in the $35,000-$40,000 range.
The digital world changed everything. As dealers are flocking to upgrade their equipment to digital labs, the market is being flooded with optical machines that are of little interest in the U.S., considering the reduction in independent labs, and very price depressed in overseas markets.
What has happened to their value? According to Bill Carroll, BEF will buy the popular Fuji SFA-278 for about $1,500-$2,000. Fuji's SFA-238 and 248 could go as high as $4,000-$5,000 because they can handle 8-inch paper. Noritsu model 1501 might be bought for $1,500-$2,000, the 2211 for about $4,500 and the newer 2301 CRT for about $8,500-$9,000.
To the chagrin of dealers, these machines have lost as much as 80%-90% of their value in the last few years and have become a glut on the market. For some models, Bill said he won't even buy unless he has an order from some other broker.
All-in-all not a happy situation for a lab owner who, a few years ago, could expect to receive as much as 25%-30% of the original value of the machine when he sold it. And not a happy situation for BEF with their major income source derived from equipment sales.
John said that there are a trickle of Fuji Frontiers starting to come back to BEF. For the popular 370, sold new for about $135,000, BEF is paying about $50,000 and, after refurb, getting about $75,000-$85,000.A BEF Digital Carrier, one of the new products that is helping BEF compete in the digital arena.
BEF's problem was not easy: the market, especially overseas, was starting to mature into digital needs, yet it was too early for any meaningful number of digital units to hit the trade-in market; and, there was a surplus of optical machines that could be purchased on the cheap but for which the market, especially overseas, was shrinking.
BEF looked outside the box to find a way to make use of good optical machines. They went to China and found a digital carrier that they could incorporate into an optical machine to convert it into a system to handle both optical and digital needs. Bill sees this as an opportunity to offer a completely refurbed optical system with digital capabilities at attractive pricing. How attractive? Bill expects to be selling the popular Fuji SFA-278 in the $14,000 range and a Noritsu 2611 for about $35,000. This price buys the paper processor, digital carrier and software, monitor, keyboard and mouse. No scanner.
According to Bill and John, the digital carrier system will be available for sale this summer. They see two markets for the system: domestically for an existing minilab owner who already has a good optical still on lease and is looking to add a second unit exclusively for digital; the export market, especially South America, where digital is starting to come into play.
Field Service Tech Backup Team for Fuji
While BEF's sales of refurbs in the U.S. has shrunk to a pittance and will continue at low levels until the equipment market readjusts and used digitals begin to show up for resale, life goes on. Making it somewhat easier is the BEF relationship with Fuji, a connection that was made about 15 years ago. Though BEF works with all brands of equipment, Fuji is the single most important cog in the wheel.
Fuji has made major inroads in the U.S. market with its series of Frontier digital minilabs. Having tied its tail to the Wal-Mart tiger, prime supplier to the Ritz chain, making serious inroads into Walgreens as well as a strong base of independents, I would guess that Fuji has probably the largest installed base of digitals in the U.S. A Fuji source recently indicated that there are about 7,000 Frontiers in use here.
That level of installed systems requires a field service tech backup team of some magnitude. BEF has developed a crew of about 100 field technicians throughout the country to service machines sold by BEF but these techs devote most of their attention as a supplement to Fuji's own field service crew.