Vigilant distributors can go far in this fast-paced industry.
Printed automotive products continue to thrive in the face of their electronic counterparts, and distributors should think twice before backing away from this important and profitable market. "The outlook is great, and I don't see a big dent in the automotive industry from a technological standpoint," said Jason Powers, marketing director at Sellersburg, Indiana-based Giraffe.
While Powers did not foresee a "paperless office," as predicted by some experts, he did acknowledge the impact that technology—such as e-commerce—has had on the automotive forms industry. "More and more people are using electronic means for business transactions today, which directly affects manufacturers' bottom lines," he noted. "However, customers still find it important to receive a paper statement when their vehicles are serviced in any way."
Deanna Day, senior brand manager at Montrose, Alabama-based PrintXcel, a Quality Park Brand, agreed. She said that while technology has had some effect on business solicitation and credit transactions, there remains a need for local sales and service organizations. "Even if someone buys a car on eBay, shipping papers are still needed," she said.
"The auto service industry, for the most part, remains a hands-on business," noted Rhende Wilton, marketing program manager at Delforms, Shoreview, Minn. "While electronic forms of billing and payment have slowed overall paper product check and billing growth, these areas still remain strong."
With forms maintaining their usefulness in the fast-paced automotive industry, Powers said that Giraffe—which manufactures invoices, statements, packing lists and certificates of title—has experienced the most sales in dollar amount with its 81⁄2x14˝ certificates of title. However, he said that overall automotive sales, which account for 10 percent to 20 percent of Giraffe's business, have been flat. "I have seen no alarming trends one way or the other," he said. "We have picked up some new contracts, but in terms of our existing business, we have seen no significant increase in sales."
On the other hand, Wilton said that there has been an increase in overall industry sales. "Quite simply, there are more automobiles on the road today, and labels and forms remain the most viable solution to meet business needs," she said.
Wilton added that static-cling and auto service labels, road service books, and garage repair orders are popular with most distributors, with static-cling labels being the most profitable. "They are easy to use and are an effective advertising mechanism," she said.
Day said that along with traditional products—such as garage repair forms, invoices, statements, keytags and warranty stickers—PrintXcel also manufactures products that require security features, including tag and title registration, odometer verification, and transfer documents.
In addition, she said that four-color postcards used to remind customers of service and oil changes are also popular at PrintXcel. "There seems to be increasing opportunity to sell direct mail in the industry," she said. "Many of the direct mail pieces that we manufacture are rebate checks printed on cut-sheets or continuous formats," she explained. "Increasingly, clients are using pressure-seal for their direct mail because they know that the piece will be opened."
Turning the Wheels
When asked if the major directs pose a problem for independents, Powers said that although they have a foothold, the majors are not as strong as they used to be.
Day agreed. "Independents can look to local companies that are servicing or selling vehicles, and that still use keytags, garage repair forms, credit applications and direct mail solicitation," she said. "Many of these businesses are happy to work with local print professionals."
Wilton said that in order for independents to remain on top, however, they must "continue to provide quality service and products at a fair price."
Powers shared Wilton's sentiments. "In my opinion, relationships are still the No. 1 way to get business," he said. "If an independent can cultivate those relationships and provide the service, quality and turn times that their customers need, the majors will not be a big factor."
As new trends and products surfaced, Powers said that Giraffe had to reorganize its business structure in order to avoid going out of business. "At one point, we were a short-run manufacturer of continuous and laser cut-sheet forms and checks," he explained. "We now manufacture long-run laser cut-sheets because they seem to be taking the place of continuous forms. Change is a good thing, as it keeps manufacturers on their toes," he said.
Powers said that the automotive industry continues to evolve, and that service and quality go hand-in-hand. "If you have one without the other, you are doing only half of the job," he said. "Customers want a good product with good service."
However, Powers advised, "Know the product line, know what you're selling, and to whom you're selling. Knowledge is power."
A novice in manufacturing auto-specific forms, with just weeks under its belt, Delforms has already experienced some challenges, according to Wilton. "Automotive customers tend to prefer carbon-interleaf multi-part forms, which most other businesses are moving away from," she explained. "The majority of manual forms have gone carbonless and also require tag backing. Our facility has been producing carbon and tag-backed forms for many years."
"The biggest challenge that manufacturers face is shorter turnaround times," Powers pointed out. "Giraffe has come up with ways to improve lead times on most of our products by implementing a lean manufacturing model." As a result, Powers said that the company has added more employees and can turn most standardized products around in three to five days.
When it comes to creative ways that distributors can sell automotive products and add value to them, Wilton said that face-to-face contact with large accounts, possibly offering a sample supply of usable products imprinted with the prospect's information, is a good option. "Distributors can add value by offering reliable delivery, competitive pricing, solid customer service and a well-rounded lineup of products that interest automotive accounts," she said.
Powers said that incorporating any type of e-commerce package into the sale is a valuable solution. "Customers always find it valuable if they can go to a distributor's Web site and purchase items in a fast and efficient manner," he said. "Time is money."
The Road Ahead
Looking ahead, Powers said that automotive products will grow as the industry continues to embrace change. "The industry is literally changing every day, and we have to be prepared to change with it or face extinction," he said.
Day said that automotive forms are in for the long haul. "As long as car owners are being solicited through direct mail and their vehicles need servicing, there will always be a need for a variety of printed products," she said.
By Cynthia T. Graham