Labels Wield Staying Power

Labels remain a dependable source of income for small distributorships.

For the smaller distributor, labels have found their niche in providing a dependable—and often lucrative—source of income.

"Labels have been a part of our product mix since the company's inception in 1983," said Michael Gordon, president of Commercial Business Forms, Cedar Knolls, N.J. "At that time, however, labels didn't play a significant role in the business because business forms dominated the market," he explained. "Now, about 25 percent of our business is centered on labels and tag materials that are adhesive-based."

Veteran distributor Murray & Heister, Beltsville, Md., has been selling labels for 25 years, with the product accounting for 5 percent to 10 percent of the company's overall sales. "We have found labels to be a very lucrative product," said Michael Boyle, chairman. "We sell all types of labels, including singles, rolls, continuous, full-color, one-color, vinyl and paper, with a wide variety of adhesives," he said.

While Gordon acknowledges that labels are profitable products by themselves, he prefers to look at the bigger picture. "At Commercial Business Forms, we prefer to think of the overall profitability of all of our products, as opposed to one being more profitable than the others," he explained. "But, our label sales have shown double-digit increases over the last two years, resulting in 12 percent to 15 percent increases each year."

Distributors agreed that labels typically do well on their own, and using them as add-ons to larger orders does not tend to increase sales.

Said Gordon, "We do a lot of label and form combinations, but adding a label to an order does not necessarily sell the product. The sale has more to do with the overall design of a system that works well for the client."

The Latest in Labels

From an industry-wide perspective, distributors say that technology has proven to be profitable in the label business. "Label sales seem to be increasing annually," said Boyle. "With the newer technology that is available today, producing custom labels has become much more cost-effective." He said that laser technology minimizes the high cost of dies.