Increase Profits by Going In Through the Out Door
"It's very easy to become a full-service distributor because many times the print portion may be the smallest part of the billing process," noted Feldman. "Personalization and mail shopping are where the bulk of the revenue comes from."
Another reason to consider offering print management services is because it differentiates distributors from their competition. With thousands of print providers in the marketplace, distributors need to offer more than just a price. By taking a company's printing needs off of its hands and managing them time- and cost-effectively, distributors separate themselves from the multitude of businesses competing on price alone.
Webb/Mason built its full-service distributorship based on three components—print management capability, back-end distribution and front-end inventory control. To compete for large single-source orders, Mason said it's absolutely necessary to have all three of those pieces in place.
But companies don't necessarily need their own warehouses and a large tech staff to win big accounts. At FORMost, Feldman said his company outsources its warehousing needs and that experience is the real key. This is because of the increased chance for financial calamity due to the large sizes of these orders.
"The only requirement to get into this business is knowledge," said Feldman. "I think the reason more distributors don't get into it is because they're afraid of making a mistake."
Art Collins, president, Northern Printing Network, Wheeling, Ill., agreed, saying risk comes with the territory, specifically when dealing with contracts.
While some kinds of print business can be cemented with a handshake, print management deals require closer scrutiny. If the forms a distributor is warehousing suddenly become obsolete and this is not covered in the contract, the distributor could be left holding the bag, Collins explained. "Distributors can't offer comprehensive print management on trust," he argued, "because when they print and warehouse without setting up terms beforehand, and that work obsolesces, they own the inventory."