Recently a small trade shop asked me to be on its advisory board. As I’m always willing to help, I said yes, not anticipating the uproar it would cause among some of my traditional printing friends. Mention trade shops to commercial printers these days and it’s like you’ve pushed a hot button. What you’re likely to get are many strong and colourful opinions about how trade shops are bad for the printing industry and hurting traditional shops that can’t compete with their low prices.
It reminds me of when I was living in a small town in the ’60s and Woolco put up one of their first stores in Ontario six miles away. I thought the local merchants were going to take up arms. You can imagine the outcry: “We can’t compete with it.” “We can’t give consumers lower prices. If we do, we’ll die.” Well, some did, but most of them are still in business some 40-plus years later. A lot of energy was used worrying about Woolco but not much was directed to trying to give customers a reason not to make the six-mile trek to the store.
It’s not unlike the situation today. Trade shops support print brokers and each print broker is equal to a printer’s top 10% to 15% of sales reps. This is where the traditional print model starts to break down, not because of the trade-shops, but because of the traditional printer’s limited talent pool. And trade shops even support traditional printers since most of them can't handle everything their customers request.
In 2000, I started a company called Caxton (now Pareto—PTO on the Toronto Stock Exchange) and one of the early acquisitions we made was a print-management company with a staff of 12 to 15. The company had, of course, no equipment and no longstanding relationships. It was too small to provide service for most major companies, although it did supply one of Canada’s largest breweries.
What the company did have were great presentation skills, effective proposals, and innovative ideas to either build revenues for the customer or reduce their costs. When it did secure business, the level of attention to detail that the staff devoted to the client and the account was unbelievable compared to the service delivered by many print companies. At this company you either created a presentation and researched the prospects yourself, or it didn’t get done.
Frankly, it made me ashamed of the work and dedication that I been getting from the team I had managed at my previous company. This was a team that was the equal of other printers but did not deliver service that rivalled print brokers or other media representatives. I thought that if we had trained our sales reps pro-perly and expected a professional approach to complement our other advantages, like relationships, capital growth (I never met a bank manager until I was on my own), plus support to get things done, we would have been more successful.
The problem is that commercial printers are often quoters, not solution sellers, whereas a print broker has to sell solutions since he can’t talk about the beautiful set of gear on the four units of the new press. In case anyone cares that is, because it surely isn’t the print buyer.
We have to accept that trade printers have become an established channel in the supply chain. And they have to deal with the same problems as traditional printers. For example, how do you replace equipment at today’s margins? Life isn’t all that rosy for trade printers and I see some of them moving into the role of a traditional printer developing their own sales group. They will still be competitors to commercial printers, but print brokers will have one less source of printing for their clients and looking for other opportunities.
Perhaps one way of taking advantage of this, is for you to create an environment that welcomes brokers to your team, as they have little back-up, and have to pay for accounting services, real estate costs, etc. A traditional printer who is seen as worth joining can provide many benefits to brokers and reap rewards in return.
Both trade printers and commercial printers will continue to play a role in the industry, but it’s only the well-managed companies from each group that will thrive and survive. Commercial printers, for example, have to sell something extra that will set them apart or they will always be competing against the trade shop’s strength—low prices.
Every business has to decide how it will establish, or change, its model, but my guess is that for the majority of companies, the model is already broken, and what managers are doing within that model isn’t well executed. Both new models and better execution are needed to avoid going out of business. Take a look at some examples of trade printers who have created new business models, such as 4over or enfigo. You can get an estimate in 12 seconds after a simple input and you can order the printed product in another 12 seconds. Or look at VistaPrint taking web-to-print to a new level delivering material as customized as their clients want.
So, to my friends who are traditional printers, take the spotlight off trade printers and examine your business. Trade printers are not the reason you may not be successful or may not stay in business. It’s your strategy, your management or you—it’s likely not your equipment or your people. But, there is plenty of help if you need. Just ask. I’ll help you.