Break into New Sales with Specialty Bar Codes
No matter where it will be used, there is a bar-coded product right for the job.
Ever heard the one about four people named Everybody, Somebody, Anybody and Nobody? Well, there was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did. Bar codes are a lot like that.
At one time bar codes were strictly the province of the very largest retailers. Today, they have become so woven into the fabric of daily life that most people hardly even notice them. So why do so few distributors actually offer them? It may be because few realize that there are numerous opportunities for selling the specialty bar-coded products.
"Not as many distributors offer specialty bar-coded products as opposed to standard, retail-use bar codes," observed Tony Heinl, vice president of sales and marketing, Repacorp, Tipp City, Ohio. "This is true despite the fact that there are new adhesives coming out all the time that expand the bar code use."
One of the largest buyers of specialty bar-coded labels is the auto industry. Because of the harsh environments in which most auto parts exist, the bar-coded labels used on them must be able to withstand extreme heat, cold and moisture. Rather than trying to sell bar codes to large companies like Ford or Toyota, Heinl said distributors should instead focus on companies that supply brakes and engine parts to auto manufacturers.
Specialty bar-coded products aren't just used in the automotive industry. Heinl said that health-care-related companies and medical testing laboratories are also consistent buyers. In fact, according to Heinl, harsh-environment bar-coded labels are in such great demand that they have become a growth area for Repacorp.
Seven hundred miles west of Repacorp, in Maple Grove, Minn., Ted Schultze, the owner of Symbology, came to a similar conclusion. For Schultze, adding specialty bar-coded products to a distributorship's product mix makes sense because that way they are not competing on price alone, he said.
"It allows distributors to sell non-commodity products into myriad applications," explained Schultze. "The typical distributor has a catalog with forms, letters and promotional products, but there are probably less than 25 manufacturers producing specialty bar-coded products."
In addition to harsh-environment-use bar codes, Schultze suggested distributors look into offering sequentially and randomly numbered bar codes.
"Whenever a bar code is printed, particularly when it is a sequentially numbered bar code, the cost of failure goes up," he said. "Therefore, the buyer will pay additional money to avoid the potential for failure." That means larger profit margins for the distributor.
Two of the best markets for random and sequentially numbered bar codes are the trucking and distribution industries. But distributors should be aware that specialty bar codes are not the only game in town. Business-to-business operations are also ripe for sales.
Although bar-code use is at the saturation point in the retail market, John Strecker, vice president of sales and marketing, Data Label, Terre Haute, Ind., said that B2Bs have been relatively untouched. The majority of B2Bs are wide open for distributors looking for new markets, but there is a catch.
"I don't believe that standard business forms distributors are seen as the primary providers for consumables with bar codes into manufacturing operations," he said. "Most distributors are not very knowledgeable or comfortable with bar codes and there is a lot of mystery to them. But that should not stop distributors from offering bar codes," added Strecker.
One way to dispel the mystery surrounding bar codes is to simply partner with a forms and labels manufacturer currently producing a wide variety of bar-coded products. Strecker said that any manufacturer printing a large number of bar codes should have the experience to handle whatever a distributor throws its way. Those manufacturers are also more likely to help educate distributors on the bar-code learning curve.
After distributors have found a manufacturer they are comfortable with, there are a couple of ways to approach new bar-code sales. One way is to cold-call new clients and ask if they are using bar codes and if there are any problems they would like to eliminate. If so, the distributor should find out how the bar codes are being used and then take that information back to the supplier to find a solution.
Another way to get the sale is to determine whether any of a distributor's existing customers could benefit from applying bar codes to their products. Because bar codes can replace vast amounts of information normally processed by hand, they can help end-users cut back on both transposition errors and man hours. That can translate into end-users earning hard dollars through labor savings and soft dollars by providing customers with quicker answers.
Of course, finding customers and capable manufacturers are only part of the equation. Making sure that suppliers maintain a strict level of quality control is also necessary to ensure that distributors are successful in the bar-code arena. None of the advantages listed above will come to fruition if the bar codes are unreadable or, in the case of random and sequentially numbered codes, the numbers have been issued twice. Heinl suggested distributors can avoid these problems by partnering with a manufacturer that produces a large number of bar codes.
While all three manufacturers agreed that offering specialty bar-coded products and approaching B2Bs are good ways to obtain bar-code sales, there is a third way that enjoys less consensus: systems sales.
Systems sales, some manufacturers have said, do not represent a good way to make money because the margins on equipment sales are slim and because once the sale is final distributors are unlikely to win reorders on consumables. Other manufacturers maintain that systems sales are a great way to make money and that they also help to ensure that distributors continue winning the consumables reorders.
"There is no money to be made selling equipment and blanks," argued Schultze. "Pre-printed is the way to go and the orders are larger too."
However, Strecker said Data Label has seen a considerable demand for systems sales. And though he conceded that those sales may not translate into a large percentage of brand-new customers and that the margins on consumables reorders are thin, he said that consumables reorder sales are easy.
"Some people might not think there is a demand for system sales," he offered, "but we certainly see a strong interest. We're selling $30 million a year in stock labels."
Finally, for distributors with customers using materials supplied by OEMs, Strecker suggested offering those customers the kind of high-quality, team-oriented service traditionally associated with forms sales.
By Allan Martin Kemler