Traditional and contemporary form designs are still driving business operations.
Mark H. Clabaugh, vice president of sales and marketing for Atlanta-based PrintSouth, and Bob McAleavey, president of Specialized Printed Forms, Caledonia, N.Y., both agreed that forms products remain profitable for manufacturers and distributors alike. "Forms are still selling," said Clabaugh. "Just as we used to joke that checks were the fastest-growing dying business in the industry, end-users will continue to need printed forms for quite some time."
"True, the pie is shrinking at a rate of 2 percent a year," noted McAleavey, "but it's a pretty big pie. Forms are a $3 billion-a-year industry. The major damage was done in the early to mid 1990s, when there was a 5 percent to 7 percent loss in various product categories, but that decline has plateaued."
Consider carbon interleaved forms, which account for only 5 percent of Specialized Printed Forms' form orders. "They could be converted to carbonless, but the end-users are very comfortable with the carbon interleaved design," observed McAleavey, "and until they leave their jobs, those carbon interleaved orders are going to be here. As with unit sets, the usage has contracted, but the rate of decline has slowed."
However, McAleavey made mention of some "dinosaurs" that have essentially vanished from manufacturers' new product lines, including stencils and peg-board punching systems. He also reported a marked decline in unit sets and some continuous form products.
Where It's At
For Specialized Printed Forms, 85 percent of business is in forms products, particularly highly specialized, intricate designs that may include four-color process, complex perfs, unique numbering systems, holographic foils, integrated cards/labels, pockets, spot carbonless coatings and security features for end-users in just about every industry imaginable. For example, a retail reseller of collectible items uses archival forms featuring a pattern adhesive, intricate die cuts and complex numbering.
McAleavey noted that having all of his equipment capabilities under one roof is a strong competitive advantage, allowing for quicker turnarounds and lower costs, since there is no need to ship product to various locations for multiple-stage production.
At PrintSouth, demand for one-part continuous and cut-sheet forms remains healthy—primarily due to direct mail applications—while basic unit set orders have declined somewhat.
For 2004, Clabaugh is focusing on jumbo roll products, integrated and affixed designs, and bound units sets, as well as traditional manifold book constructions. "Every state and municipality has carbonless, three- or four-part uniform citations, often featuring mod 10 numbering, that typically come in manifold books," he said.
PrintSouth distributors are also profiting from certified form/mailer products, such as those used for eviction notices, property leans and subpoenas.
However, the company's specialties are printed and blank jumbo roll products and continuous carton-pack products. Clabaugh said that blank rolls are typically utilized by financial institutions and utility companies for reports and monthly statements.
"Jumbo rolls are pretty well established, although new business comes on board daily," he commented. "The benefits of roll products are substantial. End-users can get close to 100,000 forms on one roll and eliminate the need for constantly attending to printers by chaining cartons together."
Interestingly, both gentlemen reported that electronic forms have had little or no impact on their forms profits. "I think perhaps short-run houses might be more affected by them," said Clabaugh. "If it's a long run, it's still more efficient to pre-print documents and run them through laser printers for the variable data."
Said McAleavey, "I started hearing about electronic forms back in the mid 1980s, but they haven't taken off quite as much as some predicted they would. This is most likely due to the fact that computers and software programs can become obsolete so quickly."
Overcoming Obstacles
Clabaugh reported that manufacturers are facing challenges from rising paper costs, which are forcing shrinking profit margins. Furthermore, the paper industry "seems to regulate itself," offering manufacturers very few options for less-expensive sources.
"Effective February 20th, the paper mills imposed a $3 per hundred weight price increase," he continued. "Even if we placed an order prior to the 20th based on a previous quote from the mill, we still have to pay the price of the paper the day it ships. Occasionally, we get burned, but usually there is sufficient notice of an increase, and we can quote jobs based on the new prices."
Then, of course, there are the major directs. According to Clabaugh, struggling major directs are offering product at pricing much lower than they used to in order to gain new accounts. "However, price cutting is a short-term solution to a long-term problem," he reasoned. The best way to combat this trend, in Clabaugh's opinion, is through impeccable customer service. "Particularly with roll products, distributors need to go after the business Moore/Wallace and Relizon already have," he continued. "With strong customer service, quality products and education, it can be done."
But, the customer service strategy works only as long as distributors and end-users are loyal to the suppliers who help them. "Money talks," Clabaugh continued. "End-users have become more effective buyers over the years and know how to get the most for their buck. Pricing issues will always be a factor within the industry."
McAleavey agreed that distributors should go after major direct accounts. "The major directs are on the ropes, and we're perfectly positioned to compete with them right now. There was a time when there were eight direct-selling manufacturers to contend with; now, it's down to two," he observed. "And, with all of the mergers and acquisitions, their sales reps are not particularly happy at the moment."
On the other hand, manufacturers and distributors in the independent channel seem to be finding renewed strength. "Specialized Printed Forms recently joined UnigraphicsUSA, which is aggressively competing against the directs through the distributor channel," offered McAleavey.
Words to the Wise
"Successful distributors have solid working knowledge of customers' business processes and can anticipate problems and suggest opportunities for streamlining," said McAleavey. "They also effectively communicate this information to the right supplier. All of the successful distributors I know are fully aware of my capabilities, as well as those of my competitors."
To increase forms sales, McAleavey encouraged distributors to rethink what constitutes a form. "Just look at business functions and processes and consider the possibilities for improving productivity and communication with a great working form," McAleavey suggested. "Many products I consider to be forms don't look like traditional forms at first glance, yet they are business-to-business ways of communicating, which is what forms are all about."
Clabaugh stressed that distributors should use manufacturers more to their benefit by determining which suppliers specialize in particular products and then using those suppliers as their primary source. "There is strength in forming alliances," he observed.
Clabaugh also recommended focusing on sales of roll products. However, he noted that there is no financial benefit for distributors in converting existing customers from long-run continuous carton packs or cut-sheets to jumbo rolls. "That would just be trading dollars from one product to another."
And, due to the specific equipment required to run jumbo rolls, he suggested looking for customers who are already set up and using it. "This also shortens the sale cycle," he added.
"It takes time to land jumbo roll accounts, but the business is definitely out there," he continued. "And, just as the business is more difficult to obtain, it's also more difficult to lose."
By Maggie DeWitt
- Companies:
- Specialized Printed Forms
- UnigraphicsUSA
- Places:
- Atlanta
- Caledonia, N.Y.