Are Dealers Ready For The OEM Changes?

by ray stasieczko April 18, 2025

Here are my thoughts and concerns about this new Konica Minolta Dealer Agreement, as described in an article published in ENX Magazine on April 10th. 2025

Changes are always appreciated more by those who are not affected by them. Unfortunately, the changes coming to the industry will be painful, and only those willing to explore the coming probabilities will possess the needed mindset to navigate the industry's reinvention.

The dealers have had a long run with the OEMs. Many agreements between dealers and OEMs have not significantly changed in at least a decade.

Recently, on my YouTube series, The End Of The Day With Ray! I discussed the press release regarding Konica Minolta changing their dealer agreement. In that article, they mention that the Konica Minolta Dealer agreement had not changed in 10 years and will sunset on June 30th. 2025

The press release discussed how the new agreement would be more contemporary. As I read it, I began to imagine what the real reasons could be for the changes to the Konica Minolta dealer agreement.

The changes seemed heavily favored in the interest of Konica Minolta, leaving many questions unanswered in the press release I read.

One of the statements in the press release was very disturbing. Konica Minolta, U.S. president of dealer sales, said that the retired BTA lawyer had blessed the new dealer agreement.

When reading that, I wondered why Konica Minolta is seeking the retired BTA counsel's blessing on a new dealer contract. My next thought was: Was the retired BTA lawyer paid by Konica Minolta to review this new contract, or was the review pro bono?

Based on what I read in this press release, I disagree with the opinion of the retired BTA council.

I am also puzzled that Konica Minolta didn't get the blessing from the current BTA council, whose job I thought - was looking out for the dealer members associated with the BTA.

The first alarming component of Konica Minolta's new dealer agreement is the 90-day cancelations without cause. How would any dealer in the United States accept this would warrant a blessing from the BTA council, retired or active?

I don't see how any dealer would be comfortable with being in a relationship with an OEM with the legal authority to cancel the dealer without cause with a 90-day notice.

Again, I really struggle with the press release's notation that Konica Minolta sought out the retired BTA council to provide an opinion on the merits of the new dealer contract, and our industry's media said nothing to question that.

OEMs can structure their contracts in any way they wish. However, dealers should have confidence in the legal reviews of these new structures.

Also, the dealers should seek counsel who is looking out for the dealers' interests as a collective.

So, why would Konica Minolta make these sweeping changes to the dealer agreement? Here's my thinking on the key changes presented in the press release.

The first big change is the elimination of geographic boundaries that dealers sell and service equipment. In the press release, Konica Minolta describes how, as long as the dealer has technical staff in any U.S. geography, they can deliver and service Konica Minolta machines.

This new stipulation I somewhat agree with. The confinements of geographic boundaries in a world where customers can pull products through eCommerce platforms are outdated.

Dealers today can sell products and perform services on a national scale like never before. However, here's why I think dealers should question Konica Minolta about this new direction.

Let's say a major distributor like TD Synnex established a national service platform with trained Konica Minolta technicians. With Konica Minolta's new agreement, could TD Synnex now deliver equipment into any dealer's territory and capitalize on both the hardware sale and the service annuity?

To take this a step further, could TD Synnex pressure Konica Minolta to cancel dealers in areas where TD Synnex has a strong relationship with a competitive dealer?

What if a major national dealer, say an organization like DEX Imaging, sold to TD Synnex? DEX, who currently has a footprint of technicians in geographies throughout the U.S.

This example is definitely a possibility, if not a probability. Remember when DEX Imaging sold to Staples? I do! I also remember envisioning that scenario before it happened, as I saw DEX Imaging repurchasing itself back from Staples, as we all witnessed in the spring of 2024.

It's not about DEX Imaging being bought by TD Synnex. My point is that the new Konica Minolta dealer agreement seems to fit that type of scenario like a glove. Please use your own imagination on the many other probabilities I can definitely imagine.

Now, let's discuss this 90-day cancellation without cause. This is a fantastic line item in a dealer contract for anyone who may acquire the assets of an OEM who might find themselves in an unrecoverable financial dilemma.

Over the last few years, I have shared my thoughts regarding Konica Minolta's financials. Qtr. after Qtr. and Year after Year, Konica Minolta has underperformed drastically in operating profit.

In the third quarter of FY 2024, which just ended at the end of March, Konica Minolta showed in its financials the divestiture of some assets in its European market. I believe we will see Konica Minolta divest more assets in the U.S. marketplace.

Also, Konica Minolta recently published a press release regarding liquidating one of its Chinese-based manufacturing subsidiaries. Konica Minolta forecasted a loss of around one hundred million dollars in FY 2024. It will publish its FY 2024 year-end numbers in May.

Remember, in the summer of 2021, Konica Minolta U.S. divested itself of around 20 Direct operations. Our friends at DEX Imaging were among the buyers, cobbling up 10 of those offices. I am thinking DEX Imaging is first inline in cobbling up the rest.

If Konica Minolta does, in fact, go through a total liquidation, as I believe to be probable, then, of course, the buyer of the liquidated assets would benefit greatly from dealer contracts, which could easily be eliminated in order for the buyer to realign distribution at street level with the buyer's current distribution network.

So, based on my thinking, it seems obvious why I believe Konica Minolta put together a new dealer agreement that is heavily weighted toward Konica Minolta or those who could potentially benefit greatly from acquiring Konica Minolta assets.

Our industry's actors must question things based on the realities of a quickly changing world. We can no longer sit with each other in the comfort created by avoiding challenging viewpoints.

Our industry's dealer councils must be more inquisitive and should have the utmost confidence in any legal advice regarding the check-and-balance between dealers and the OEMs they work with.

After reading this press release, I also think dealers must determine the value of OEM senior leaders expressing opinions from retired legal councils and should instead seek the legal opinions of legal counsel who are employed to look out for the dealers' interests.

In closing, I leave you with this Ray-Isim,

Without the ability to imagine how we can be defeated; we are at the mercy of those who plan and execute our defeat.

Ray Stasieczko – Host of The End Of The Day With Ray!

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