Better Outside Than In
Outsourcing printed products is a popular trend among end-users.
Outsourcing has become a premium among distributors. Not only is it a major part of the distribution business, but for some resellers it represents all of their business. The reason is that end-users just don't have the time and money to handle the inventory, delivery and maintenance of printed products in-house. A justifiable conclusion, considering that most companies want to allocate a majority of their time to handling the business in which they specialize.
Distributors, on the other hand, do specialize in printed products.
"I think that end-users realize how consuming it is to handle something that is not the focus of their business," said Cliff Bregstone, president, CBI, Schaumberg, Ill. "It's just too difficult for them to do it cost effectively and correctly on their own."
Today, outsourcing represents more than 50 percent of CBI's volume—a significant jump from 10 years ago.
"We produce a lot of print-on-demand jobs for seminars," said Bregstone. "That involves matching the printed work with books and binders and sending them to where the courses are being held."
In addition, Bregstone reports processing about 3,000 change-of-status information requests per day for companies with 401K and health benefit programs.
"Most of our customers wouldn't ask us to do this work if they didn't feel it would cost them less to do it externally," said Bregstone.
According to Steve Hawes, president of Advent Print Resources, Seattle, "Outsourcing is the means by which we get products produced for the customer. We operate as a brokerage in that regard."
He explained that one of the obvious reasons for outsourcing is constantly changing technology. "No sooner is there a new piece of equipment that can do all sorts of great things, than it becomes obsolete. We are able to find the source that has the best technology for our end-users' demands."
He added that the greatest advantage his company brings to its clients is the ability to match a product with the most appropriate print supplier in terms of length of run and the time line involved.
"We can draw from 350 to 400 suppliers for various products and services," said Hawes. "In the case that a client has a need requiring a single supplier, we will generally get competitive price quotes from three to five suppliers and figure out the best way to produce."
Finding the best supplier and then warehousing and shipping the goods is just part of the outsource process, however. Creating up-to-date reports on inventory status, usage and history is another important aspect of the system.
With Advent, end-users have a selection of 60 to 100 different reports—one of the most requested of which contains recent usage trends of a product and its inventory on hand.
"Many of those clients based on a cost center allocation want to know what the cost expenditure is for particular products, so we produce reports for that as well," said Hawes.
The same is true at CBI. Bregstone says his company produces everything from market analysis to inventory projection and control to invoicing, accounts receivable and entire financial packages.
A New Slant on Outsourcing
While many distributors offer traditional and electronic outsource options, one company serves as a complete electronic solution provider for distributors. Founded in 1997, digiPRINTco., Phoenix, a company that prints and mails bills, statements, invoices and direct mail pieces, has been selling its service—called Best Bill!—to distributors who in turn sell it to end-users.
"Our main focus is to attract resellers and, instead of having them sell business forms, they can sell our outsource solution," said Susan Haugland, vice president of operations.
She explained that the system saves end-users from footing the bill for automated mail equipment and other capital expenditures since digiPRINTco. receives their data electronically, prints it out by the next business day and applies all the bar-coding and automation the post office requires.
In terms of payment, the distributor pays a flat fee and is given a price list with options for the end-user. The distributor can then mark up the prices as they see fit for their own profit.
"Basically the print industry is not growing," said Haugland. "So we are providing new options for distributors."
Both printed and electronic bills, invoices and statements can be dispersed through digiPRINTco., in addition to mailers that may or may not contain inserts. Reports are also generated by the company, including delivery confirmations and total bills sent.
Typical candidates for the Best Bill! service are any businesses generating a high volume of bills to be printed and mailed. Currently, digiPRINTco.'s distributors cater to collection agencies, financial institutions, third party administrators and municipalities, to name a few.
Haugland touts the printed bills as superior, stating that digiPRINTco.'s proprietary software provides for high-quality, four-color print jobs with various fonts and arrangements to choose from. In addition, CD-roms, containing identical, full-color bill information—providing easy reference for customer service representatives—are sent to the end-users.
So where does digiPRINTco. get the paper it needs to print the forms? Orion Press, one of the largest trade printers in the southwestern United States. It seems the 26-year-old company approached digiPRINTco. recently with an offer to buy a piece of the business.
Said Haugland, "Now we have a vertical integration concept. We've become official business partners and they supply the paper we use."
While an e-outsource provider represents a continual shift in the way the forms business is run, not all distributors are jumping on the bandwagon. According to Haugland, some apprehension still exists.
"Some print distributors are deficient in or have phobias of technology, but the process is so easy and simplified." she said. "We can get a customer live on the system within five to seven business days and the benefits to distributors and end-users is well worth it."
By Sharon R. Cole