Corporate culture in 2007 can be summed up with a few signature words and phrases: downsizing, outsourcing and maximizing while minimizing. Of course, the printing industry has been experiencing these changes firsthand for years. To retain a competitive edge as companies across the board are swapped and sold, distributor networks are angling for successful approaches on an increasingly uneven playing field, aiming to maximize client satisfaction, quality control, and most importantly, profits. At the same time, corporations seek to efficiently expand market presence with branding, marketing and promotional campaigns in creative, standout ways—translating into new and challenging printing jobs and an increasing demand for high-quality work at low costs. As a result, distributors must continue to uncover creative ways to weather the industry storm, and break with the past by developing new professional alliances.
Two distributorships have done just that. InnerWorkings, headquartered in Chicago and founded in 2001, has armed its ranks with a network of more than 4,500 print providers to obtain and manage printed products for corporate clients. The company went public in 2006. Bowling Green, Kentucky-based Best Business Systems (BBS), in operation since 1984, announced the new BBSProNet in 2007. BBSProNet is a network designed to aid distributors in landing major accounts.
Their client bases and business models may vary, but both companies boast a roster of seasoned industry veterans at their helms. President, CEO and owner of Best Business Systems and BBSProNet Paul Keith, started IBSA with nine other partners in 2002. Eric Belcher, COO of InnerWorkings since 2006, was previously the company’s executive vice president of operations after serving as CFO at Man Roland.
As a result of its extensive and varied supplier contacts, InnerWorkings offers management services in areas such as book, promotional and hospitality products, as well as printing, tracking, warehousing and distribution services. In late November, InnerWorkings acquired Corporate Edge, a New York City-based distributor of promotional products.
Belcher defined InnerWorkings’ services as “procurement” and “outsourcing.” “By ‘outsourcing,’ we are referring to neutral, third-party buyers working on-site and being completely open with their customers about pricing and their supplier choices. We work on our clients’ behalf and become an extension of their marketing department,” he explained.
He also noted the changing corporate attitude toward investment in printed products. “We’ve observed that the faltering economy has caused many procurement officers and chief marketing officers to rethink their approach to what has been a neglected category of spend[ing],” he said. “Corporate America is looking for more accountability with, and visibility into, their print spend[ing]. Consequently, we’ve seen substantial growth in terms of attracting large enterprise clients to our print solutions.”
While InnerWorkings has its sights set on corporate alliances, BBSProNet is focused on fostering distributor contracts and partnerships. BBSProNet’s goal is to connect distributors with new channels of profit. It offers sales tools and assistance for larger and nationwide accounts, to aid independent distributors in a competitive selling environment. Keith said he was in a better position to create distributor relationships as a result of his work with IBSA. “[BBSProNet’s business model] allows any distributor with a major account opportunity to participate with us. Distributors do not sign [contracts] when they join or send money. There are no complicated rebate systems and buying programs. Our entire focus is capturing contract business and competing with the majors—simple, efficient, effective,” he continued.
While Keith and Belcher both look optimistically toward 2008, their viewpoints on 2007’s industry booms and losses differ. Keith asserted that the liquidation of Global Docugraphix had the biggest impact on distributors over the last year. “When large distributor organizations go away, [the change] creates a ripple effect that is felt by most independents. Many suppliers were adversely affected, and that touches nearly all distributors,” he said.
Belcher pointed to the limited usage of client management technology as a faltering point of the industry. “The technology we’ve seen from others focuses mainly on basic order management with an e-store component,” he noted. “Clients are expecting project estimating tools, supplier recommendation modules, automated baseline analysis and a wide array of additional reporting that offers them visibility into their spending.”
And, even though Best Business Systems saw growth in its e-commerce programs in 2007, Keith felt technology was being overemphasized. “Integration to existing technologies needs more work,” he explained. “Distributors need more training and education to sell the products. The barriers to progress are there and need to be removed [in order for it] to succeed to its full potential.”
Belcher, however, thought traditional print selling and buying methods were being unnecessarily stressed. “We’re proud that we’ve introduced a new approach that blends procurement technology, an extensive qualified supplier network and experienced professionals to yield tremendous savings for our clients and success for our account teams,” he explained.
Perhaps it’s a good sign both company heads are confident in their individual business models’ ability to influence the industry. Keith predicted major change through the networking provided by BBSProNet. Considering his involvement with the implementation of IBSA, Keith believes his new incarnation will face fewer obstacles. Belcher was strongly optimistic and said, “The biggest development among distributors is the recent openness and receptivity of corporate America to outsource print procurement and production activities to third parties such as InnerWorkings.”
To stay afloat, distributors must forge new, and often nontraditional, relationships to move the industry in a new direction. The role of distributors is clearly changing—as it has been for the last few years. But perhaps Keith and Belcher prove that rolling with the punches is a distributor’s most important role.
- Companies:
- Inner Workings