Large Distributors: Differentiate To Succeed
Collateral printing and value-added services top the list of large distributorsÍ survival tools
By Misty Byers
In a highly-competitive industry one thing is certainyou canÍt survive if you arenÍt willing to differentiate yourself from your competitors. Successful large distributorships are meeting this challenge by increasing services and extending their product bases.
Wauwatosa, Wisconsin-based Teuteberg is doing more commercial printing and ña lot more value-added services such as fulfillment and database managementî than five years ago, said Matt Teuteberg, executive vice president. ñInstead of just having forms in a clientÍs pick-and-pack program, we might include all of their literature, commercial printing and label products. ItÍs really becoming more of a total print of services contract.î
ñWe have become more focused on value-added services such as document management programs that distinguish us from most commercial printers,î said Kevin Schrader, operations manager at Hart Information Services, Austin, Texas.
At Data Supplies (DSI), Duluth, Ga., commercial printing has also been a major growth area. ñIt has probably been the biggest single area of growth in our company,î noted Tom Tabor, vice president of corporate operations. ñEnd-users want to narrow down the number of suppliers they use and limit the number of links they have coming into their company,î he added. ñI always use the expression that the company with the most toys in their toy box is going to get the business.î
End-users arenÍt the only ones reducing the number of suppliers used. Teuteberg is making an effort to reduce its number of vendors in order to cut down on administrative costs and develop more intensive partnerships with those that remain.
ñWeÍve gotten closer to our top suppliers, as far as bringing them into our sales meetings and meeting with end-users,î noted Teuteberg. ñThe products we sell are getting more complex. When we call on a customer we are selling ourselves as consultants, able to bring in an expert partner.î
Teuteberg has formal partnerships with just two vendors, both of which offer very unique products. ñWeÍve put together special pricing programs and we try to enter the marketplace co-promoting both companies,î he said.
Hart also maintains strategic industry relationships with vendors and has non-compete agreements with their suppliers. ñThis strategy has resulted in reduced pricing from vendors, making us more price competitive in the marketplace,î said Schrader.
DSI has no formal partnership arrangements, according to Tabor, but does have programs in place to bring the company closer to specific suppliers. ñThese are generally the suppliers with which we do the most volume,î Tabor noted.
Small Distributors: DonÍt Count Out the Tiny Titans
Survivingand thrivingas a small business against larger companies takes ingenuity and perseverance
By Janet R.Gross
Branding works for one small distributor, careful customer selection for another and niche marketing for a third. While all have different approaches, each of these companies has found a path to survival.
Branding works for one western company. No, not cattle branding, but a proprietary suite of services and products comprising document management, paper products, hardware, software and consumables.
ñThatÍs our niche,î said Vinod Kripalani, president of Inflowtech in San Francisco. ñWe offer a unique delivery option that has created a stable customer base.î
Inflowtech has changed during its 15-year history, offering electronic forms and maintaining a Web site for nearly four years, but Kripalani said, ñPaper is still critical. We stay pretty true to our mission; weÍre a forms company.î
For Broughton and Associates in Orlando, Fla., choice of customers is critical. Hand-picking manufacturers is one thing; hand-picking customers quite another. Yet, thatÍs exactly what President Bill Broughton does. The company deals primarily with non-profits and doesnÍt advertise. ñIÍm very fortunate in that I donÍt have a lot of competition. Not everyone can do all that we docradle to grave,î said Broughton.
Five years ago, Broughton hung out his shingle to capitalize on more than 25 yearsÍ experience in direct mail, forms, graphics and data processing. He had been a data processing manager and both bought and produced graphics, printing and direct mail products. ñIf I were just selling forms, I wouldnÍt have made it. IÍm successful because I have four revenue streams,î Broughton said.
Tony Mendes is the archetype of the small distributora one-man band serving up business forms, commercial printing and promotional products throughout Rhode Island and the surrounding area. He started Enterprise Business Forms in Riverside, R.I., five years agoafter eight and a half years with Mooreand has 15 to 20 core customers.
ñThe advantage of being my own boss is IÍm not pigeonholed into a market segment or territory,î Mendes said. ñSometimes, thatÍs also my undoing as itÍs so wide open.î
How do smaller operations allocate their limited resources? InflowtechÍs nine employees wear multiple hats, Kripalani said, adding, ñThereÍs never enough time to sell. If we could, weÍd spend 24 hours a day in front of customers.î
Instead, employees operate on a schedule and are disciplined about segmenting their time. There are procedures and people assigned to the primary business functions. This programmatic approach, plus a reputation built on years of experience, allows Inflowtech to create a persona ñso that the customer thinks weÍre bigger than we are,î Kripalani said.
Most smaller distributors go for the custom sale. Mendes is moving away from commodity items to avoid competition with office supply superstores or online print shops. ñIf I do relationship selling, when commodity sales come down to price, I can tell a customer itÍs better to go elsewhere and the relationship stays for the value-added products,î Mendes explained.
Manufacturers: Manufacturing in the New Millennium
Suppliers share their thoughts on the industryÍs future
By Carol Katarsky
Despite its maturity, the forms industry has shown remarkable resilience.
In the face of increased competition from direct sellers, the constant challenge of keeping up with technology, the prospect of mergers and acquisitions and shifting trends in what end-users are buying, suppliers have countered with expanded products, improved telecommunications and better servicefueling the continued growth of the industry.
Although the oldest products in the industry are still plugging along, the majority of growth has been in newer solutions.
Richard Miller, sales manager for Calibrated Forms, Columbus, Kan., said his companyÍs top growing products are long-run cut sheets, due to the increasing popularity of laser-compatible products. Calibrated still sees growth in more traditional products such as continuous forms, but is changing its product mix to meet client demand.
Jon Singer, president of Roanoke, Virginia-based TRANSKRIT¬, also said he expects to see growth in laser-generated formsincluding InfoSeal, InfoCard, direct mail and self-label applicationsdue to the growth of direct marketing companies. He also cited other growth factors, such as the expanding need for pick-and-pack solutions as more people buy online.
According to David Holt, president/CEO of PrintXcel, traditional products are going to decline slightly while the majority of growth in the industry will come from labels, integrated form/label products, commercial printing, one-piece mailers and digital print solutions.
ñThe biggest trends will be more color and digital printing. These products will likely see the highest growth rates, even though they are a small market segment,î he noted.
One of the most pervasive trends of the past few years has been the increasing frequency of mergers and acquisitions.
Mergers and acquisitions have been a big part of PrintXcelÍs growthit has consolidated business document companies Poser, Apico/Perfection, Denver Forms and IPC Graphics; label businesses Discount Labels, Lancer Label and Poser Labels; and Wisco and Century Index envelope companiesbut Holt said its activity would probably slow this year following the acquisition of Discount Labels.
ñEven so, we will continue to look for companies with strong growth potential in their product lines and technologies for cut sheet, integrated label/forms and digital/variable imaging companies,î he said.
ñConsolidation is inevitable and will continue for some time,î Holt predicted. ñItÍs not economical for people to use many vendors, people are looking to reduce the hassle and paperwork. But there will always be a sizable number of suppliers who specialize in certain niches.î
Singer said TRANSKRIT is looking to grow internally and will have a plan in place within the next six to 12 months. But he believes that many companies will continue to consolidateboth manufacturers and distributors. ñIn the coming years, competitive fitness will depend on the companyÍs creativity, flexibility and response time.
ñCompanies will need the capability to provide a wide range of solutions for customers. Others may survive by focusing on a narrow, specialized area to hold large market share,î he noted.
Miller also believes the trend will continue for some time. ñLots of companies are ready to sell as the industry becomes more competitive,î he noted.
End-Users: Establish Long-Term Relationships
Print buyers are slowly overcoming their fear of commitment to program buying
By Eric Fiedler
PRINT BUYERS traditionally have had affairs, semi-serious business bonds and even one-job-stands with print distributors. Now, because of industry trends, many are ready to settle with one partner who can fulfill all of their evolving needs.
ñThe distributor has to play more of a role of project manager if they want to form a lasting bond with the end-user,î said Ivars Sarkans, president of Sarkans & Associates, a Los Angeles-based consulting firm for the printing industry.
Previously, the distinction between forms, commercial printing and labels was clear, but Sarkans believes the line between these segments of the printing industry is blurring. ñBuyers donÍt care, as long as they can get what they want how they want it.î
An overload of information, both from the Internet and suppliers, has created a struggle for many print buyers. ñAll these things are driving customers to print management programs,î Sarkans said. ñA good program resolves a lot of the uncertainty, technological concerns and overload because they get it all in one package instead of dealing with 20 suppliers and conflicting information.î
Sarkans feels the next step for program buying is automation of the requisitioning process. ñBecause you are dealing with one supplier, you now can automate the whole requisition process so people can contact the lender or the print management person on their PCs and order anything they need,î he said.
Sarkans added that automation is particularly effective in large forms management programs because buyers no longer need as many purchasing agents. They can be replaced by someone who can monitor the program. ñDistributors need to get out of physically handling small orders and repeats. If they donÍt automate their buying programs, they will eventually lose them,î he said.
Sarkans said the best way for distributors to automate is through the Internet. ñNot only does it benefit the customers, but it also automates front-end processing for distributors,î he said.