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    There are many directions a printer could move in order to increase revenue streams and profits. I would assume that everyone wants to do both. If you have enough volume, then optimizing your workflow throughout the entire operation will help to improve your profits. This will do little to ensure your viability in the long term but for the short term, it will be the first step towards that goal. This blog will discuss increasing revenue streams and I will discuss process improvements another day.

Right now, I am suggesting that it is time to start looking for new ways to gain revenue from your existing customers. Adding new streams of revenue will be accomplished by adding products and services that you will be charging your customers for. These new products and services should support your existing infrastructure and most importantly, should cater to your existing customers. You should begin by understanding what the available options are and then talk to your customers to find out what they would purchase from you.

Understanding which services are available as options for you to offer is important and will allow you to have more informed conversations with your customers. If a customer was to offer a suggestion and you had no idea what they were talking about, it would be difficult to come back later and present yourself as an expert. You should also be prepared to be open to any suggestions and reserve your judgement until after you have done all of your research.

Many of the options available to you are the very same things that have been taking business from you in the first place. Some may even be services that you dropped from your offering. Others will be emerging services that your customers may not have even considered yet but may generate interest. Remember that in order to offer a service, you don’t necessarily have to produce it yourself. You may just outsource the additional services or form an alliance with a company who can.

Here are a few examples to give you an idea;

Graphic Design, Marketing Services, Website Design, Internet Marketing, Social Media Services, Database Management, Photo Publishing, Large Format, Inkjet Printing, Digital Printing, Photo Copies, Personalized Printing, Web2Print, Email Marketing, Video Marketing, Variable Data, Mailing Services, Web Printing, Screen Printing, One to One Marketing, Finishing Services, Die Cutting, Mounting, Warehousing, Distribution, Kitting, Packaging…

Adding digital printing (photo copier) can help support your existing business and prevent customer erosion. Simply adding a digital press is fairly easy to do and is the most popular direction for most print shops. This also supports the existing workflows in most shops. The addition of variable data services takes this up a notch because it requires more knowledge and the addition of specialized software. Remember that if you add something simple, your competitors can do the same. The more specialized you become, the harder for others to duplicate the service.

Inkjet printing is another popular addition and most printers who already utilize inkjet printing for proofing purposes can easily add this as a product offering. This may require the addition of finishing services and bringing in different substrates. There is a wide variety of machines on the market today and the demand for these products is high. If you add both digital and inkjet together, it gives you a wider service offering & less reason for your customers to move onto a different supplier.

On the back end, various finishing services can add revenue that typically is send to an outside service provider. Mailing services, die cutting, kitting & fulfillment are popular services and offering them in-house can greatly reduce the overall cost. Many companies that have added digital services do not have the high-end finishing equipment required and can be an additional revenue stream as a trade supplier. If you become a specialist in a certain area, this will bring additional customers as well who are seeking this service. It will be much easier to add customers with expanded services and expert advice.

Content creation is an important aspect of the production process. Those who are designing the marketing programs for companies are deciding what products will be purchased. The closer you get to these people the more influence you will have. If you decide to become a marketing services provider, you will be able to create programs that include print as part of the mix. Many marketing companies are pushing digital services because they are popular. Protect your business by pitching directly.

The world is going digital. If you are able to offer your customer the digital services that they are looking for, they will have no need to look elsewhere for their traditional print needs. Those who offer the digital solutions can easily enough offer offset & digital printing services without having to produce them in-house. Take back control and offer these solutions yourself. Even though digital services may never end up on paper, they are worthwhile sources of revenue and the investment required is knowledge instead of &1,000,000 machines.

Building websites and stores is big business these days. A web store is really the evolution of the catalogue. The only difference really is that it is on-line instead of printed. Well, there are obviously other benefits as well. There stores require constant updating and marketing materials to support traffic generation. Email marketing is the new newsletter and a good marketing program will use email marketing to support the store’s sales. SEO and back-linking strategies help to improve store traffic and represent yet another source of revenue. There are many services that can be added to support websites and stores.

Social Media is fairly new and is a service that many companies require. Putting together a social media strategy for your company can be the basis of a service offering to your customers as well. This is the current rage and promises to deliver a more personalized branding experience. While it is still fairly new, the competition is new as well so get in now while the timing is hot.

Consumer products and services can add additional revenue as well. While many people are taking digital pictures these days, there are billions of older photo prints that have not been digitized. Scanning their photos is just one of many services you can offer. Even though many people now have desktop printers, they are expensive to use. Photo printing is another potential revenue stream. Photo retouching, enlargements, paper and ink sales could be added to support this business as well.

Business services could also be added. This is the age of the small business and many people have started their own business. The most difficult part of operating a business is accounting. Since you have probably nailed this part down, you could offer the accounting services to these new companies. In addition, you could rent out office space, offer computer or bandwidth rentals (on-site), the use of office printers, reception services or whatever other services you are capable of.

Sales training is another service that you could offer. In helping companies build their sales department, they will obviously looking to support their sales efforts with marketing materials. In helping these companies develop their USP – Unique Selling Proposition – and creating a sales plan, you will be the obvious choice in providing the support materials and services.

Once you have a clear view of the options that are available, it’s time to start talking to your customers to find out what services they are looking for. It is possible that your sales force may already have some of this information and their insight could give you a better indication of how to start the discussions. Draft up a list of questions that you can ask and don’t be afraid to ask how your company is currently performing. When you ask what services do they buy or are they looking for, have a checklist and see how they react to your potential list. If this is starting to sound like a survey, that is exactly what it is. This is market research (another service you could offer) and is the basis of which you will make your decision. As for who will ask the customers these questions, it would be best for management to get involved as much as possible. Sales people are another option but they would need some background information. The receptionist is probably not your best option. Clear unfiltered results are what you are looking for.

These are just some ideas to get you started and there are many more options. Doing nothing will get you the same results that you have been getting. It’s time to start adding revenue streams that will help support your business growth in the long term. With the amount of competition out in the market today, you need something different to offer your customers that will set you apart from the average competitor. With sales people, they will grow bored and move on if there is no room for growth and hiring a sales person with a limited portfolio of options is difficult. It’s time to start thinking different and create the new future.

 

There have been many challenges in the printing industry over the last few years and if you don’t like what has happened so far…you are not going to like what’s coming. For those that keep a keen eye on trends and invest in the knowledge, skills and equipment capable of servicing the future needs of our customers, this represents opportunities for new revenue streams that will support their legacy operations as well. For those who hang onto the hope that the market will once again return to offset, this spells doom for them. It’s a new world emerging and it belongs to those that step up and utilize the tools that work in today’s and tomorrow’s market.

Customers are not looking for printing. They are looking for sales. Sales are achieved through marketing & branding. Printing was one of the best methods for them to achieve higher sales but that is no longer the case. Print remains an important tool but is no longer the most effective one, certainly not the cheapest. Many different mediums have emerged and while adoption of these had been slow, they are gaining popularity & you can expect them to gain even more popularity in the future. The printers who have adopted and added new revenue streams such as variable data, pURL’s, wide format inkjet and mailing solutions have increased their value to the customer and have the best chance to survive the next few years. But is that enough for tomorrow’s market?

The internet has been gaining popularity and it’s effectiveness has been proven repeatedly. In fact, you can measure it’s performance in real time with the right tools. Facebook & Google make their money by allowing advertisers reach the consumer. This is what print used to do for them. What was once a catalogue is now an on-line store…who needs a printed catalogue anymore? Maybe those that serve the older demographic that do not use computers. Facebook is currently rolling out new advertising options which will increase their effectiveness. LinkedIn is just starting to implement advertising and of course Google is moving into social networking. All of these mediums offer highly targeted advertising that produce measurable results. Those are just today’s major players. Groupon and similar services are starting to gain popularity and will continue to do so. These sites are already taking business from the traditional printer and why not? The consumer themselves print the coupons so the cost to implement for the advertiser is far less than printing and distributing coupons. Apps and games are another emerging advertising opportunity that will continue to gain popularity and as mobile computing evolves, we will continue to see more effective mediums emerge.

It’s up to the printers to figure out how to fit into the new digital world that is emerging. Customers will go with those that demonstrate the ability to increase their sales with the best return on investment. Selling print is simply not enough in today’s market and places you in a commodity market. If you allow others to create and sell the solutions that people are looking for then you are at their mercy. For those that create and sell the services, weaving print into the solution, those will be the successful printers of the future.

 

The world of offset printing was once a solid industry but over the past few years we have steadily seen a reduction in demand for offset print. There are many reasons for this and it is important to recognize that this is not a fad that will disappear. Offset still remains an important part of the future however expect to see a constant slide.

 

Manufacturing has shifted to emerging markets where low wages drastically reduces manufacturing costs. Along with that manufacturing, the support documentation and packaging have also shifted to those markets. China is one of those countries that has benefited from this change and it is very unlikely that the work will come back anytime soon.

 

Improved efficiencies have drastically reduced the production times required to produce a job so each machine now requires much more work to fill it to capacity. The work that does remain is subjected to fierce price competition so the efficiencies do not result in increased profits but instead, lower pricing and even more price competition.

 

Digital delivery has taken a considerable amount of work as well. Many companies that once included printed instruction manuals have opted for PDF files instead. In a world where everything is so price sensitive, it only makes sense to make this move to digital. Music CD’s & DVD’s were once a popular product that required packaging but today, those products are being delivered electronically. Even books are delivered electronically and for the first time, electronic delivery of ebooks outsold traditional paperback books.

 

Magazine and newspaper subscriptions are in constant decline and again, digital delivery is one of the reasons for this. As well, advertising revenue once dedicated to this medium have been redirected to other forms of advertising.

 

Copier technology or digital presses have not only taken away the majority of short run work, they are taking away some of the higher run work as well. Variable data solutions offer a targeted solution that generates a higher ROI for customers.

 

Desktop printers are cheap and everyone has the ability to print impressive full colour materials from their homes. Many companies make their marketing materials on-line & those who want a printed version can just print it out on demand. This also impacts the world of photo prints.

 

The paperless office has not eliminated print but it has had a huge impact on the industry. Many people include a line in their email informing people not to print the email unless it is necessary. Although this pertains to the email, the message is branding and building awareness about paper conservation.

 

Inkjet technologies have gained popularity over the years and today’s machines produce a wide variety of products that have proven to gain customer’s attention. A wider range of product choices means that the budgets once allocated to print are now being spread over a larger range of products reducing the run lengths and putting them into the realm of digital.

 

The internet has had a huge impact on printing. At one time a customer had to print a catalogue to get their products in front of a customer but today they simply need a website to accomplish the same thing. Customers can update pricing whenever required and no longer need to reprint their price-list whenever they have a price change. Brochures and other marketing collateral are also made available for customers to instantly view on demand.

 

Social Media has captured the attention of the world and is becoming one of the most effective forms of branding. Many companies are refocusing their advertising budgets to the internet in an effort to cash in on this.

 

Lower advertising budgets forces companies to find the lowest cost solution to achieve their marketing goals. With so many options today, much of those dollars are spread out to a variety of marketing vehicles.

 

Stiffer competition throughout the industry has impacted the pricing of the remaining work and makes it difficult to make a profit in today’s market. Lower pricing and less volume together can be a disaster for companies without additional revenue streams.

 

The advertiser has many more choices on where to spend their money these days. In many cases, the sale goes to those that can demonstrate lower cost and higher effectiveness in their product offering. When was the last time your sales proposal demonstrated the effectiveness of your product offering? Those who are offering marketing services that include personalization or internet advertising are armed with research data that shows how much more effective their solutions are over other mediums.

 

If your printing company is suffering from any or all of these challenges, what are you doing to add more value for your customer & support traditional offset sales?

 

 

Do you have a plan in place to grow your business into the future? Today’s business environment is much more difficult to survive in and proper planning will ensure your success. If your business is failing or just barely getting by, it is likely that you do not have a written business plan in place or if you do, you probably don’t review and update it on a regular basis. In the past, you could get away without one but that is no longer the case, business is just too competitive these days. Remember that failing to plan is the same as planning to fail. You need a clear roadmap to determine where you are going in the future and these plans must be communicated and embraced by all of your employees.

 

Once you have a written plan in place, you then need to create a cash flow forecast and determine if you will be profitable with this plan. This also gives you something to measure against to see if you are actually achieving your objectives. This should also be backed up with market research to ensure that you are heading in the right direction and there is plenty of research available on the internet and through industry groups.

 

If you are considering buying a machine and complete an ROI (return on investment) consider this as only the first step. If you have the ROI supplied by the company selling you the machine be very leery of the data supplied. Do your research and be sure ahead of time that this will succeed. Suppose you look at buying a new Heidelberg to replace your existing equipment. You might want to forecast what your sales will be in the future and actually talk with customers to find out what their opinion is first. Any large outlay in cash should be carefully considered because most marketing research data shows that offset print is in decline and wishes will not turn that around. Same thing goes if you are considering a move into digital printing but as well, you have to consider the additional skills required for not only the operation, but for the sales force as well. Adding digital is a fad these days and does not guarantee success so remember that even though many companies have added the capability, they have not necessarily learned how to leverage it in today’s market.

 

Marketing research data is not always right. There are many cases where the data cannot exist because nobody knows about the technology. Who would have guessed that a mobile app would be able to generate $100,000 in revenue per day within 6 weeks of launching? Draw Something has achieved that with over 12 million daily users. Although it may look like app development is the way to go, HTML5 may just render app development as useless. Who knows, marketing research could not possibly predict this either way. Research data also does not take into consideration emerging technology that would wipe out existing technology, especially if they do not know what is coming. If Steve Jobs had relied on research data, Apple would never have become what it is today. That takes a different skill than what most people possess and it is not something that can be learned. Either you have it or you don’t.

 

Another critical factor is the support of the organization. Without it, even the best plans and ideas will fail. The plan needs to be properly communicated to everyone involved and that message has to carry out to the market. Everyone in the company needs to be on board so the plan has to include them and you need to demonstrate how the plan will benefit them. Not always an easy accomplishment in a traditional environment with older workers who would rather not learn anything new. I remember the days I was trying to convince film strippers that they needed to learn how to use a computer. Some people just need to lose their job and search the job market before they realize that you were right.

 

If you don’t know how to create a business plan, there are plenty of resources available to help with this. Most communities have a business resource centre and there are always plenty of consultants available. Just remember that many of the consultants are not forward thinkers and you want to check their background to make sure they are the right person for you. A turnaround consultant will smash your business to pieces so you want to avoid them…unless you are looking to close down.

 

While you are putting your plan together, you will be pre-planning every conceivable issue that could arise and be prepared for anything. This is when you would set up your pricing structure, predict your potential sales, assess the human resources required to carry out the plan, construction, marketing, training and anything else involved. Once you see the numbers, you will know whether or not you should proceed. If you can’t sell yourself at this point it might not be such a good idea. If you forecast a loss of $100,000 would you rather know before you committed or a year after when it becomes a reality? Maybe a loss in the first year is to be expected and that is the road to $500,000 profit in 3-5 years. That is what long term planning will show you.

 

Once you have your plan together, it would be a good idea to run it by a few people who can verify your numbers and assumptions. Your mom might not be the best person for this (unless she is an executive with experience) and your buddy might not be either. You need the advice of a seasoned professional who can offer an opinion and you will be looking for someone who might be highly critical and challenge you on your data. This is a good thing because you want to be sure before you move forward. Make sure you pick someone you can trust.

 

Remember the 6 P’s – Proper Preparation Prevents Piss Poor Performance

 

No plan? Failure is in your future!

 

By 2020 there will be billions fewer consumers at their peak spending than there were in 2007.

The world of manufacturing has been good for many of us. It has provided good, medium term employment for many people and has served a great purpose. In our quest to keep up with growing demand, each of us fine tuned our businesses and took many steps to becoming as efficient and lean and mean as we can. We cut out as much manual labour as we could and we were all prepared to take on the world. But now it seems that the world has turned off it’s demand for our products.

In our quest to build a better business, we forgot about the most important element in our business, the consumer. Yes, I understand that everyone is “customer focused” and tries to relate as best as they can to the customer but that is different than the consumer. Consumers are those people with jobs and money to spend on all those great things that we make. Each and every time we eliminated a job due to improvement we killed another consumer.
Don’t get me wrong. Becoming more efficient was an essential part of the process. It is what every company in every area of manufacturing had to do just to survive up to this point. What I am saying is that each and every job that was eliminated was a consumer that was tossed away like an old diaper. We wanted nothing to do with the consumer (old employee) and we left them with nothing but the experience. As we modernized and became more efficient we eliminated our workforce with no regard for what these people were going to do. We forgot to remember that these people were also consumers. We decided that it was somebody elses problem to deal with so nobody did anything about it.
The mistake that we made is that we eliminated the majority of our workforce over the last several years and did not create new jobs for them. When we eliminate our workforce, that workforce is also the consumer base so we are basically eliminating customers every time we eliminate a job. New job creation has been at the bottom of the market with part time hours and minimum wage. With the employees that are still working, most of them are working at a much lower rate than what they previously earned and are doing much more work than what most people used to. The majority of people can barely afford to pay for the stuff they already have so they are not out spending on new stuff.

The boom is over

The baby boomers who drove the economy for years have started to retire. Many of them had their retirement savings cut to less than half when the market collapsed in 2008 so many of them cannot afford to spend like they would have. Many who planned to retire have had to extend their working lives passed their retirement dates because they can no longer afford to retire. The boomers have done their spending and it will be another 10 years before a comparable sized group does their spending.

Business as we know it is doomed…to evolution

I say that because too many people are stuck in the belief that the current system is still OK and things will magically rebound to “the good old days”. I am here to tell you that if you are hanging in there waiting for the turnaround, it’s time to give up to the reality that surrounds you. There is a major flaw in our business world that has not been addressed and until it is, things will just continue to get worse. You can see the flaw in the mantras of almost all companies. You can see the problem looking right in your face but you still cannot see it. It is all a matter of perception, what angle you look at it from.

CASH IS KING!

One of the most essential elements to any business is the consumer. Yes, this is the end customer who actually buys the finished product. These are also the people who consume the product through the entire chain. In order for everyone to have good sales, the consumers have to be buying lots of product. If the consumer stops spending money, then that means that they stop buying product and then every one in the entire chain is affected by lower volumes. Less demand = less sales.

Why has the consumer quit buying our product? Our product is a necessary part of everybody’s life so why wouldn’t they need it. The consumer quit buying the product for several reasons. The first and most obvious reason that they quit spending is because we put them out of a job. Yes, the consumer is also your employee. Each and every time that we automated and advanced our craft and removed the manual labor, we neglected to take care of the consumer and make sure they were taken care of so that they could go on spending. We we eliminated jobs and we did not create new opportunities for these people so that they could remain consumers and continue to fuel the need for product.

Why was it that we had to reduce our costs and eliminate those employees, who were also consumers?

We did not decide for ourselves that we needed to reduce costs, we were told to do so by the market. It was the customer who had to keep cutting costs to remain competitive in the market. The market is the consumer of our products that we create and the consumers decided that they want to buy the cheapest product they can regardless of the cost. When the consumer walks into a store and makes a purchase based on price, that is the signal to the producers to reduce costs. We do that by eliminating the cost of manual labor, we trim the consumer from our workforce.

It is true when we say we are our own worst enemy

It is our own purchasing habits and the concept of the cheapest price that has created our current situation. It is the disconnection that we have when it comes to price. If we picked products that supported local employment and good paying job creation we would be thinking about ourselves when we make our purchase. The corporations are only doing what has been demanded of them by the people who give them their money, the consumer and their investors (who are usually our RRSP fund managers). Every time we automate a process and eliminate an employee we kill a consumer at the same time. With each and every consumer that is eliminated it gets a little worse and so more consumers are killed off. Replacement jobs are usually taken at far less pay. Those of us who are left start feeling the pinch and start lowering our cost of living. We do so by buying cheaper stuff. The cheaper stuff they buy requires the killing off of more consumers. It’s like Russian Roulette when you make a purchase today. Which one will eliminate your job?

So when are things going to turn around and come back?

Not until we start showing leadership as companies and start to consider the health of our consumer. There is no consumer loyalty because there is no corporate loyalty to the consumer. The consumer only sees greed. Until people start getting good incomes that do more than cover their basic needs, consumer demand will continue to fall. Find a way to put income back into peoples pockets and they will start spending. It can’t be like in the past, it needs to be something new and sustainable and without greed or corruption. We can wait till the system crashes, or we can choose to start rebuilding by re-thinking how and why we do business. It is time to change…

The future is ours to create

 

Heidelberg 8 colour sheetfed offset printing press

The printing industry has seen many changes over the years and it has always been the most progressive companies that survive. As technology changes, so do the needs of the customers and so we have to change with it. The world of offset printing has changed forever and it will never return to the volumes that we saw just 10 years ago. Many printers feel that we are in a recession and that waiting out the current “cycle” is all they have to do till everything returns to normal. Problem is that this is the new normal for offset printing and things will not return to the way they were. If you are selling offset printing today you may as well be selling CD’s or CRT TV’s. There comes a time when new technology renders the old technology useless, expensive or just too slow. It is no different than when letterpress gave way to offset printing in the first place.

In order to see into the future, we must first look to the past as a guide.

The process camera was once a necessary part of the printing chain. Now obsolete.

Letterpress was the dominant source of communications for a very long time. It was very labor intensive and the quality level was very low compared to today’s standards. It was the operator and his abilities that determined how well a job turned out and the skill and knowledge of the plant determined the final quality of the product. When offset printing was introduced, it cut the labor required to produce a job from every aspect. Jobs shifted from setting lead type to paste-up and film work and introduced a whole new skill-set to the industry. Offset printing gave us the ability to create incredible looking full colour communications material that everyone wanted. It opened up whole new markets that many printer’s allowed to exist outside of the industry because they themselves were too slow to adopt. In the early days, a cameraman used to provide colour separations by shooting an image with different filters. This was a process that took hours to produce a good result.

CCD scanners have made all of the past scanning technology obsolete.

They actually had to complete the whole printing cycle to get a proof and often had to make corrections. A process that took days and lots of money.

Digital Cameras have eliminated the need for color separations.

This process was replaced with million dollar scanning and separation machines. They also introduced a film proofing system using film and pigmented materials. It is important to note that film assembly and colour separation became separated from many print shops. The cost of process colour printing had come down at the loss of labor and income to the print industry. The film house became our supplier instead of the industry adopting the process themselves. The film houses also became our customers as they began to deal directly with the end customers. Technology continued to evolve and CCD imaging technology, postscript, laser imaging and computers allowed lower cost of entry into the business. Those who adopted the technology drastically reduced their operating costs and with continued improvements, greatly reduced need for film stripping and scanning systems. Computer to plate implementation completely wiped out the majority of the film business.

The Creo Trendsetter is a computer to plate machine that eliminated the need to image film.

Offset printing began in the 50′s and started becoming popular in the 70′s. Process colour started becoming popular in the late 80′s. Everything before that was letterpress. Almost all printers are now digital or computer to plate. The entire life of the litho film industry was about 40 years. Considering that the early adopters of CTP began eliminating film in 1990, it took 20 years to phase out film. Looking further back, phasing out letterpress took even longer.

Copiers

At the same time that offset printing evolved, there were other printing technologies that have emerged over the years. Photocopiers and laser printers have become dominate forces in the industry and have put the power of printing into most households. Inkjet printing has given the average person the ability to print just about anything depending on the limitations of the machine. If it wasn’t for the high price of the inks & of course the finishing, people would be doing much more of their own printing. If we look at the printing market of the 70′s, a lot of the work was still black & white with some spot colour. The work that started the offset revolution started shifting to digital devices back in the 80′s. As printers, we never considered the photocopier to be a real printing device. So most of us stayed out of this market and allowed the quick copy segment to grow and prosper.

The Internet & Smart phones

The internet is the true evolution of printing. Printing has always been about communicating visually and sharing information. The high cost of printing allowed only those with enough cash to share their knowledge or message. The internet gives just about everyone the ability to reach the world from any location with minimal cost. Smartphones just extend our reach. Information is now and up to date. Not hours, weeks or months old. Sales reps and customers can be connected to live updated information whenever they need it. The world is evolving to the internet and it is time to wake up and see it for what it really is

Trade Printing

Another thing that has happened in the industry is a consolidation of work. While many printers still produce one job at a time, the printers who initiated gang run printing and a more streamlined and efficient workflow have taken the lion share of the work from the regular old-school printers. This takes many of the “bread & butter” jobs away from the local printer as it is hard to justify a price 2-4 times higher than what is easily accessible from a trade shop or one of their dealers.

Overcapacity

With the decline of print volumes, we also have another problem in our industry. Many print shops bought high capacity machines that drastically improved the throughput of jobs. The same amount of work is now produced in a fraction of the time and all of our value added services are gone. For the work that is left out there, there is probably enough machine capacity sitting idle to handle at least 5 times the amount of work available. There is simply too many printers fighting over what is left so it has become a buyers market. Cheapest price wins. Welcome to the commodity market.

Global Market

Regardless of how efficient we have all become, there is still high costs associated with printing. Cheap labor and a lack of environmental concerns in emerging countries make it less costly to produce large runs. Manufacturing companies have moved their operations to these countries and the print that goes along with them. It just does not make any sense to produce a product in China & then print the packaging in Canada.

The Sharks

The shark is nothing new but in today’s market, they make things even for difficult for everyone. The shark is a printer who is dominating the market by buying key business with low prices and unethical business practices. While some printers will buy existing companies for their sales, others use the money they would have spent buying the company by underpricing the jobs and taking the work from the competition. Take enough top accounts away from the competition and the lack of volume just drives up the cost for the competition making it even more difficult to survive. The end goal of the shark would be to force the competition into closing. For probably less than it would have cost to buy 1 competitor you can put 5 or 6 out of business.

So what does the offset printer have to look forward to in the upcoming year?

Printing has evolved and if you have not, you will not survive. Printing is ever evolving all around you and the doors of opportunity are opening and closing faster and faster with the pace of technology. It is those who open new markets and develop their own opportunities, who see where things are going in the future and embrace the change. The future of offset belong to those that support the offset business with other services and have demoted offset as their core business model. The internet and digital printing in a wide variety of formats now rule the world of print. Offset is just one of many options. If it is your only option then you will have difficulty hanging on to what business you have left.
This is not the death of offset printing. There will a need for quite some time however the volumes will constantly decline similar to how the need for film declined. Even if everyone returned to their old marketing budgets, they just have so many options and a good marketing campaign will utilize all different media types.

What will it take to bring back offset printing production back to where it was?


The internet would first have to collapse and manufacturing would have to be brought back to North America. Lets face it, if the internet was to somehow collapse, the whole economy would be going with it & you would probably have to take out electricity as well. If a solar flare hits earth and wipes out electronics it takes out the modern press with it…then were back to movable type. A 2012 disaster scenario or nuclear war could do it but then we are ALL screwed. The collapse of the financial system could do it but that would be extremely ugly. If we were to heavily tax imported goods we could bring back manufacturing. Driving up the price of oil and transportation…but then none of us could afford to drive or heat our homes. It’s time to face it that the world is not going to step back and the once large print volumes are gone forever.

It’s time to quit waiting for things to come back. The world of printing is evolving with or without you. Those who create new processes and develop new markets will thrive. Those who follow will survive. Those who stay the same will become obsolete. What are you doing to ensure your future?

If you are looking for ways to evolve and survive? Looking to tune into what the future can look like for you? I can help. Contact me by email.

 

With Eastman Kodak on the brink of a restructuring, many people are wondering what the future holds for them. It is likely that they will get some cash for some of the patents that they hold and many of those patents will allow for advancement in technology that Kodak has been holding back from the market. This will allow Kodak to survive for the short term, but the future as it stands is pretty bleak for them. Their current situation is completely their own fault as they hung onto the past for far too long.

Eastman Kodak’s core product have been film, chemistry, print paper and printing plates. Their key markets are printing, photography and medical imaging. All of those markets are now eliminating the use of film with medical imaging the last to transition. Most of their sales have disappeared with the remaining sales making it difficult to operate efficiently. Kodak had a share price around $80 but is now below 50 cents. Pretty scary times for a huge company on the brink of collapse.
As a Kodak customer, I always kept close tabs on their operation. I worked with cameras , developing film, litho stripping and platemaking (all part of the printing process). Our invoices from Kodak were enormous, but of course, that was always passed on to the customer. The development of emerging technology was something that I always followed and there were some exciting developments that were under way and then dis-appeared. Sometimes the developer would run out of money or support, sometimes they would be bought by bigger companies, some were shelved and many actually developed into products. What I noticed with Kodak’s involvement with these technologies was that they made an effort to hold back advancement and tried to keep the film business alive for as long as possible. One of the products that I was watching develop was a product that was sprayed onto a press cylinder and then imaged directly on the press. No more plates. Kodak bought the technology and it disappeared.

Cash is King

Kodak has an obligation to it’s shareholders to consistently grow and do everything in it’s power to protect it’s business. They had a choice between leading by developing new products and markets or to hold and protect their existing business. With the emergence of direct imaging, Kodak was starting to lose sales with every improvement made in the industry. As a leader in the change to computer to plate, it seemed like they were working towards sabotaging it’s development. I found that Kodak reps spent a great deal of time developing relationships with printers and they all seemed to carry a programmed message that they delivered to the printing trade. This is one of the reasons that the printing industry took so long to transition, because many printers did not believe it was going to work or that they were capable. Kodak helped to nurture the fear of change and keep the customer focused on using as much of their product as possible. The attitude was that computer to plate was complicated and too hard to accomplish. They talked about the difficulties instead of successes and they had an attitude that anything outside the scope of normal was impossible. I was often told by Kodak that the issues I had with their products were exclusive to me and that I should tone down my expectations. They wanted me to drop high resolution printing and stick with the standard 150 line-screen. Since I was in contact with many others who were like me, I found that many others were told that they were also the only one having problems as well. In order to effectively hold everything back, the whole sales organization had to believe it to be true and so the whole culture within Kodak would have to be trained & would continue to hold onto that belief. Kodak has been so focused on stopping change that the attitude required to turn things around is simply not there. They shut off their ability to change in order to keep everything the same and it (the ability to change) is a difficult one to get back.

Kodak needs someone with vision to review all of their patents and technologies and create something new. They have the tools but don’t seem to know how to use them in today’s world. Their business model does not fit in today’s society and it will only get worse with progress. Kodak needs to start considering the health of the consumer and find something that can help them. The consumer does not need Kodak and has no loyalty to them. Why should they? It’s time to start putting the consumer first and solving their problems. Forget about everything you know and create a new way instead of trying to catch up. Lose the box that contains what you know and what you can see and present something new that everyone will want.

 

I grew up in a family business and made the decision to leave 2 years ago. It was a tough decision because I had spent over 30 years preparing to one day take over the family business. There were a lot of things that went on over the years to lead to my decision and 2 years later I have a different understanding about everything that lead to the decision. Family business succession is one of the hardest phases for any company. Failing to come up with a plan is planning to fail. As a family, we could not agree on the future path of the company and the company was suffering because of it. The only way to end this battle was to leave the battle.

I have gained a lot knowledge and skills in my time at Advance Printing. Having 2 years to work out everything that I experienced has given me incredible insight into relationships and how they evolve over time…on all levels.

I will be writing about the things that I learned. Hopefully I can help others who might find themselves in my position and give them clarity so they can make better decisions for themselves.

Dec 092011
 

The power of the 6 P’s

Proper Preparation Prevents Piss Poor Performance

A business without a plan is like a boat without a rudder or leaving for a trip without a destination. Sure, it can be a real adventure and you never know where you are going to end up. The key to long term growth and profitability lies in the planning stage. If you map out where you are going and how you are getting there, then everyone can follow the plan to help get you there. Once you know where you are going, then you can measure to see how you are doing against your projections. If you are not on the right track then you need to make adjustments. If you like your plan to be flexible and ready to adapt to changes, this is achievable with a plan. You can review and adjust the plan on a regular basis if you like, even on a weekly or monthly basis if need be.

Practice

I can’t remember who taught me that but I have lived by this ever since. Spend as much time learning and practicing as you can. What makes someone good at anything they do? Lots of practice. Why is Neil Pert one of the best drummers in the world? he practices more than everyone else. This is one point that many people miss. When they learn enough to be good at something they quit learning and live life wondering “what does it take to be good?” Lots & lots of practice. We are talking about 1000′s of hours, not just a few. Once you get that good with one thing, everything else is much easier. You gotta learn new things and practice at all times.

Also known as the 7 P’s with Prior at the beginning.


 

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