Fridays with Frank: '80s & '90s Mega Dealer Acquisitions, Good or Bad for the Office Tech Industry?
Summary
TLDRThe transcript discusses the history and challenges of independent copier dealers in the face of large rollup companies. Initially, the rollup models were unsuccessful, but some dealers prospered by continuing independently, especially during the 80s and 90s. The narrative highlights the resilience of these dealers, who built their businesses from scratch and adapted to industry changes, such as the shift from analog to digital. The speaker refutes predictions of the demise of independent dealers, citing their continued success and the flaws in the rollup strategy.
Takeaways
- 📈 The original Alco model was successful, but subsequent rollup models in the copier dealership industry were not.
- 🤔 The lack of understanding of the copier business by those involved in rollups led to a failure to replicate the success of the original model.
- 💡 The basic rollup strategy was to invest, grow, and then sell for profit, but this approach did not pan out as expected.
- 🚫 Financial experts wrongly predicted the demise of independent copier dealers, who could not compete with large rollup companies.
- 💼 Independent dealers who didn't sell during the rollup era made significant profits, enjoying a 'golden' period throughout the 80s and 90s.
- 🔄 By the turn of the century, a trend of dealers buying other dealerships began, with notable examples like POA and Marco.
- 🗣️ Dealers did not feel threatened by acquisitions and believed the industry changes would ultimately benefit them.
- 🎤 The president of H CDA, Paul Shields, sought diverse perspectives on the impact of rollups and acquisitions.
- 📰 A Wall Street Journal article predicted the success of rollups at the expense of independent dealers, a view that was not shared by all.
- 🚀 Independent dealers had built solid businesses from the ground up, often starting from humble beginnings.
- 📊 The series of technological advancements, from plain paper copiers to digital transitions, significantly benefited the independent dealers.
Q & A
What was the general opinion of existing dealers towards the original rollup models?
-The existing dealers found the original rollup models to be unsuccessful, as they did not understand the business they were requiring and the financial people underestimated the ability of independent copier dealers to compete.
How did Tom Johnson's experience with the Alco model differ from other rollup models?
-Tom Johnson's experience with the Alco model was very good, as it was a successful model, unlike the other rollup models that were not as effective.
What was the simple model that the rollup companies initially followed?
-The simple model involved producing a certain amount of dollars, with the profit being at a specific target. They planned to make investments, build up the business, and then sell it or build it and sell the whole entity.
What were the predicted consequences for dealerships acquired by rollup companies?
-The predicted consequences included the deterioration of service and sales, with employees of the acquired dealerships likely seeking employment elsewhere.
How did the independent dealers fare during the 80s and 90s?
-Independent dealers made money and had a golden period throughout the 80s and 90s, as their businesses were successful and they were able to adapt to market changes such as the transition from analog to digital.
What significant event happened around the turn of the century in the dealership industry?
-Around the turn of the century, dealers started buying other dealerships, marking a shift from the previous patterns of the industry.
What was the reaction of dealers to the acquisitions and rollups during the CDA meetings in the 1980s?
-Dealers did not feel threatened by the acquisitions and rollups. They felt comfortable and believed that the situation would ultimately work out well for them.
How did the Wall Street Journal article view the success of rollups?
-The Wall Street Journal article predicted that rollups would be very successful at the expense of independent copy dealers, a view that was not shared by the speaker.
What was the speaker's perspective on the independent dealers who started their businesses?
-The speaker viewed the independent dealers with respect, as they had built their businesses from the ground up, often starting from their garages or basements, and were successful despite the challenges.
What technological advancements impacted the dealership industry during the period discussed in the script?
-The advancements from analog to digital technology, as well as the boom in the plain paper copier market during the '80s, had significant impacts on the dealership industry.
What was the speaker's overall view on the success of independent dealers?
-The speaker believed that independent dealers were successful, as they had built solid businesses and were able to adapt and thrive through various market changes and technological advancements.
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