For years, many OP dealers have viewed service as a burden—a cost center that requires skilled labor, expensive infrastructure, and unpredictable scheduling. While Managed Print Dealers were willing to accept those burdens in exchange for long-term contracts, most Office Products dealers stayed focused on transactional sales: low risk, fast turnover, and minimal overhead.
But the rules are changing. Customers now expect more than just product delivery—they want reliability, continuity, and accountability. And OP dealers need new ways to build recurring revenue if they hope to grow in a contracting marketplace. Extended Service Warranties (ESWs) offer a powerful solution to both challenges.
Rather than functioning as a traditional cost center, ESWs are structured as a revenue-generating program. They introduce predictable, margin-friendly, recurring income for the dealer without adding operational complexity. This model shifts the entire economics of service, making it a profitable line of business rather than an administrative headache.
How the Revenue Model Works
At its core, an ESW is a subscription. The customer pays a fixed monthly fee for coverage on a specific device. This fee includes all parts, labor, technician dispatch, and support logistics. The dealer receives a portion of that subscription as profit.
The best part? There are no trucks to maintain, no techs to manage, and no service tickets to personally oversee. The warranty provider handles the repair logistics through a national network. The dealer simply facilitates the sale, manages the relationship, and earns the recurring revenue.
Scalable Without Staffing Up
One of the major barriers to launching a service program has always been scalability. How can a dealer grow service revenue without hiring a service team?
With ESWs, scalability is built-in. Whether the dealer sells ten warranties or a thousand, the service infrastructure remains the same. It is the warranty provider’s responsibility to manage service delivery, giving OP dealers a way to grow without increasing headcount or carrying liability.
This is especially important for smaller dealers looking to expand their offerings without taking on more fixed costs.
Positioned for Upsell and Cross-Sell
Because ESWs are simple to explain and easy to implement, they serve as a natural upsell in any hardware or device transaction. Whether a customer is ordering a printer, a laptop, or a desktop PC, the dealer can offer warranty coverage at the point of sale or in follow-up.
Additionally, ESWs can be layered into more comprehensive service programs. Dealers who offer supply cabinet management, DCA software, or managed IT services can bundle warranties as part of a full protection plan, increasing the total monthly value of each customer relationship.
Improves Customer Stickiness
ESWs don't just generate revenue—they improve retention. When a customer has multiple devices under warranty, they are far less likely to switch vendors. Why? Because they now depend on the dealer not just for products, but for continuity of operations.
This stickiness makes ESWs a powerful strategic tool. They give OP dealers more leverage to protect accounts, negotiate renewals, and defend margins in competitive bids.
Low Barrier to Entry, High ROI
Unlike launching a new product line or investing in a warehouse expansion, rolling out an ESW program requires minimal upfront investment. Dealers can be up and running in a matter of days, with marketing materials, onboarding support, and training provided by the warranty provider.
This creates a compelling return on investment. Dealers gain a high-margin, low-touch revenue stream that complements their existing product sales and enhances their brand promise.
A Program That Grows With the Dealer
As dealers build confidence and develop sales motion around ESWs, the program can scale across the entire customer base. Starting with a handful of high-value accounts, dealers can test pricing strategies, positioning, and bundling options.
Over time, they can standardize warranty offerings across product categories, include them in procurement proposals, or even offer incentives for early adoption.
Conclusion: Service That Pays You Back
OP dealers have long been boxed out of the service game because the economics didn’t make sense. But Extended Service Warranties flip the script. They transform service from a cost center into a growth engine—creating new revenue, increasing retention, and requiring none of the traditional overhead.
This is the new model of profitable service. In the next chapter, we’ll explore how ESWs not only retain customers, but deepen relationships by increasing dealer relevance and reducing procurement friction.
Related Reading:
Building Loyalty with Extended Service Warranties: In the OP dealer model, price often drives decisions, but Extended Service Warranties (ESWs) shift focus from cost to value, building stronger, more loyal customer relationships.