When Do Print Agreement Buy-Outs Make Sense?

When partnering with Print Partner, we encourage managed service providers (MSPs) to look through their book of business and refer clients who need help with their print to us.

We take pride in supporting both our MSP partners and our clients. We want you to send us everyone you can!

However, some clients, for one reason or another, may need more time to be ready to switch print providers. And the most common roadblock we’ve found is that clients are locked into their current agreement.

Print agreements are typically ironclad - if the agreement says it’s for five years, the client is locked in for five years.

Thankfully, we can bypass this barrier for some clients with a buy-out of the agreement, meaning we pay a lump sum to their current print services provider to end their contract early. That way, we can enroll them in our service plan before their end date.

In this article, we will review everything you need to know about our Buy-Out program and answer the key questions we ask when evaluating a client for a buy-out. What are the requirements for us to buy out an agreement, and when is it worth it?

1. When Does the Print Agreement End?

This is an excellent question to lead with. From a logistical standpoint, timing may be the most critical question we must answer when considering a buy-out opportunity.

The closer they are to expiration, the more likely a buy-out will make sense for us and the client. The more months left on the buy-out, the greater the expense for the client.

When we buy out an agreement, we lump the expenses we pay the former dealer into the client's monthly payments. So, more months of service left means a higher monthly fee for the client.

For example, suppose a client had three years left on their service agreement with a prior company, and we buy out their contract and enroll them in a five-year contract with Green Office Partner. In that case, they’d essentially pay us eight years of service within five years.

Because of the steep costs, we typically avoid buy-outs for agreements with more than twelve months left. However, this timeframe is flexible, and there are situations where longer-term buy-outs make more sense.

Knowing the length of the prospect’s current contract gives us a sense of how to approach to the buy-out conversation and helps us assess whether the deal makes sense for all parties involved.

2. How Much Will the Buy-Out Cost?

Once we’ve determined the time left on the print agreement, we can get into the weeds on the associated costs.

Considering the time left on the agreement will already give us an excellent place to start. But we need a copy of the print agreement to evaluate the buy-out price fully.

The agreement will tell us everything we need to know about how much the client pays their current print vendor. The agreement will tell us about their cost-per-click (CPC), leases, and any supplementary solutions and services added on. 

Aside from expenses, the print agreement also gives us key insights into the prospect’s fleet, and we recommend you retrieve this document from every client you refer to us. For more information, read: MSPs: Always Collect Your Customer’s Print Agreements!

Most agreements’ costs are broken down by a monthly bill, so we can easily calculate the buy-out cost by multiplying their monthly bill by the months left on the agreement for the core services associated with the lease. Service-related items may require additional calculations, especially when third-party providers are involved. 

The buy-out cost is often a “make or break” conversation for the deal's success, and it’s an essential piece of the buy-out puzzle.

3. What Are the Prospect’s Pain Points?

When clients consider their managed print services, cost is not everything.

Having unreliable print support creates massive problems within offices, leading to slowed production, security vulnerabilities, and a potential box or two getting thrown through the window!

While some clients are only focused on saving a buck, we also encounter clients who are so fed up with their current print vendors and equipment that they are willing to bite the bullet and pay steep fees in exchange for better services and products. 

We’ve seen some emotional transitions that, at first glance, may not have made sense on paper, but the emotional value of stabilizing print for the customer was worth twice the price.

To discern between the penny-pinchers and the value-seekers, we encourage our MSP partners to ask about their priorities. What are their pain points? What about their printing workflow needs to be fixed? What would streamlined, proactive, managed print services do for their organization? Is that worth the extra money they’d spend if they switched providers?

If we can sell them on the value and peace of mind we can offer them, the cost will become an afterthought, and a buy-out will make sense, be it for three months or three years.

4. What Problems Can We Solve?

Once we’ve learned about the prospect’s pain points, we’ll strategize on how to solve their problems.

What can we do differently?

To answer this question, we must conduct our signature print assessment to determine the prospect’s goals and needs.

We’ll conduct a walk-through of the prospect’s offices to gain key insights into their equipment suite. What’s working well, what isn’t, and what services, equipment, and/or solutions could improve their workflow?

We’ll also work with our MSP partners to install data collection agents (DCAs) to track key printing metrics. This will help us track print usage, giving us an idea of how much they typically print and their average print spend. For more on our DCA, read: An In-Depth Look at PrintFleet

The print agreement will also give us an understanding of their budgets and expected printing output. Agreements will show everything the other vendor bills for based on the printing volume and supplementary solutions, services, and add-ons.

If our team at Green Office Partner determines that our offerings meet our prospect's needs, we will move forward with the buy-out.

We Decided to Buy Out the Agreement. What Happens Next?

If the prospect finds that Green Office Partner is a better fit for them than their current provider and that the buy-out costs are worth it, we will proceed with the buy-out process.

There is no one way to complete an agreement buy-out. Depending on the situation, we have a few different methods of transferring them over to our system.

The most obvious is to end their current relationship when we onboard them. We’ll contact the company that financed the original agreement purchase to do so. Green Office Partner will pay the financing company a lump sum of what they still owe on their former agreement and then add it to the bill we send them for our services.

In these cases, we’ll need to work with the prospect to explain to the financing company why they are switching so they can transition before their contract’s end date.

In other cases, we’ll have them stay in their current agreement and continue to pay on it for the remainder of the term while we take over service in the meantime. These options are available in certain situations, and our sales reps will determine the best course of action when appropriate.

Print Partner and Supporting Smooth Service Transitions

Buy-outs can be a tricky subject. 

Buying out an agreement gives us a great way to “fast-track” the onboarding process so we don’t have to wait for current contracts to expire. It can, however, lead to additional expenses for overlapping services for prospects.

Whether your clients are locked into lengthy agreements or not, Print Partner is here to help our MSP partners navigate which clients in their book of business are ready to sit at the table.

When you send us a referral, we’ll handle the entire sales process from start to finish. Make the introduction, and we’ll do everything else.

Plus, we’ll pay you! For each deal we close, we’ll pay the person who registers the opportunity at least $500 for the introduction and an additional $250 per $25K in revenue the deal brings us. For the MSP, we’ll pay $1,000 per 11x17 MFP sold, $100 per printer sold, and 5% recurring revenue on the client’s print allotment. And we’ll provide exceptional client service while we’re at it.

So, if you want to help your clients get out of lackluster print agreements they feel trapped in, consider partnering with us, a Print Partner you can trust.