The decision to provide commercial printing is often made for distributors—by customers.
A successful distributor isn't likely to turn away a good piece of business and risk opening the door of opportunity for the competition—especially if the job is for an existing customer.
So, in 1994, business form distributor Gary Dunlap didn't have to think twice when he was asked to provide high-end marketing materials.
Actually, the president of The Venture Corporation, Lewisville, Texas, had planned to enter the commercial printing arena when he left Moore Business Forms in 1991 to establish his own company. "Because I and my salespeople always tell our customers 'yes,' they tend to lean on us for everything," said Dunlap.
Even under the best of circumstances, satisfying commercial printing needs is a challenge for experienced distributors—let alone the newly initiated. For his first job, Dunlap's customer was someone he affectionately called a "hot-headed eccentric." "But, I learned a lot," recalled Dunlap, "and I made a good deal of money."
The customer—an entrepreneur with an investment firm—needed marketing materials that consisted of 10 different pieces. "He told me that he wanted his project to 'look like money,'" explained Dunlap. "After he showed me a competitor's piece, I got to work assembling my team, which consisted of a local paper house, a designer, my printing plant and a local mail house. It took a lot of legwork," he continued, "and there was a lot of running back and forth to satisfy the customer's quality needs. It was a seven-color job with registered embossing on an exotic, elephant-hide paper that was imported from Europe."
Today, many of the orders that Dunlap and his associates write are for high-end commercial printing, such as marketing materials and posters. "Our niche is sheet-fed jobs," said Dunlap. "The web market in Dallas is saturated, so those margins are too small with too high of an exposure."
When it comes to prospecting for commercial printing jobs, Dunlap observed that marketing departments are the best places to pitch high-quality jobs, including direct mail campaigns. "Purchasing departments are all about price," he explained, "and bid packages are not going to make distributors any money—nor do they build relationships. Sure, a distributor can go that route, but it's a weaker position to be in. It's better to have the marketing manager call for a purchase order number than the distributor."
Once in the door, the distributor must prove that he or she can be an asset to the customer, and Dunlap stressed that this typically involves a team effort. "Manufacturing plants can assist distributors by providing samples that show the creative types that the distributor is a player," he offered. "If a plant can't provide eye-catching samples, then the distributor has the wrong vendor."
Dunlap also cautioned that price is not the ultimate issue when it comes to commercial printing. Rather, a distributor's ability to deliver is a higher priority, and he or she must stay involved throughout the manufacturing process. In addition, he commented that finding an outstanding designer can pay off big for a distributor.
In a market where the competition for commercial printing spends is fierce, Dunlap stressed that one key to success is finding manufacturers who offer value-added services that make it easier to close a sale, such as online ordering programs that enable his company to enjoy good profit margins.
Although a tough economic climate has put the old kibosh on some print spends, Dunlap reported a 34.9 percent increase in sales for the last fiscal year completed.
Dunlap went on to offer some guidelines for determining profit margins. "Margins on bid packages and order-to-order bids are low—somewhere between 15 percent and 20 percent or lower—since here, the distributor is simply not adding any value," he explained. "The high-end marketing pieces that I handle from conception to completion are 50 percent and higher. Print program selling also generates high margins, starting at approximately 40 percent, since the distributor is doing a portion of the purchasing department's job."
For Dunlap and other distributors in the commercial printing market, a lucrative opportunity often results from being in the right place at the right time.
He recalled an occasion when he discovered that a purchasing agent was splitting orders between two vendors. "I simply asked her, 'If I can add two to three hours back to your day and eliminate information transcription mistakes, would you be interested?' Needless to say, she was ecstatic, and The Venture Corporation became her single-source provider," he said. "If you can simplify a customer's life, that customer won't ever leave you."
By Maggie DeWitt