Distributors contemplate the present and future state of the industry.
Has this year's economy had an adverse affect on the forms business? And with endless possibilities for print popping up via ad-vanced online technology, do distributors stand a chance to stay in the forms business in the years to come? Whether or not the recent fiscal slump gives way to major changes within the in-dustry, or simply serves as an opportunity for industry professionals to refocus their efforts, remains to be seen.
To gain better insight into the concerns distributors have been facing of late, how they are handling them and where they see the industry heading in the long term, BFL&S contacted the following panel to form a roundtable discussion:
- Bob Cronin Jr., president, MAC Graphics Group, Oakbrook Terrace, Ill.
- Andrew Duke, president, Metrograhics Printing & Computer Services, Fairfield, N.J.
- Steve Hawes, president, Advent Print Resources, Seattle.
- Raymond Mahar Jr., Image-now by Mahar, Victor, N.Y.
- John Osborne, president, Midwest Single Source, Wichita, Kan.
- Jeff Martin, vice president of sales and marketing, Control Printing Group, Independence, Mo.
What are some of the major concerns within the industry and what should be done to handle them?
Cronin: "The main concerns right now are developing the effective use of electronics and surviving the downturn in traditional forms use. The tack we've taken is to diversify the lines and products we offer—for instance, we're adding promotional marketing materials to our offerings We're also looking into digital printing, the Internet and e-forms."
Osborne: "The biggest concern is that we don't have clear definition of the industry, because so many product choices exist. In the past we had three or four major manufacturers who defined the market by what they sold and many distributors simply followed their lead. These days only true entrepreneurs, who can offer the most innovative products and services, will be able to survive."
Martin: "One concern is that too often distributors spread their businesses too thin by using many different manufacturers. They should, instead, align themselves with just a few manufacturers that offer the right combination of quality service and price. That way, they can offer more value to their customers."
Duke: "The technology issue has gotten everybody concerned as to where the traditional forms market is going, but the answer is simply to keep on top of it, get involved with it and learn as much as possible.
"In general, the forms distributor's role is in transition right now, but that's not necessarily a bad thing."
Has this year's economy affected your business?
Hawes: "We've found some downsizing and consolidation among our clients, but we've also found that a lot of companies are turning to suppliers like ourselves to outsource work previously done in-house."
Martin: "Even though we are ahead of last year's pace, the growth isn't exactly what we an-ticipated. We definitely expected a slowdown in the economy because it's been so hot lately, but it turned out to be a little slower than we figured."
Cronin: "There's been a slowdown in the turnover of receivables, but because it's the first downturn in some time, everybody has forgotten what it's like."
Mahar: "The economy hasn't really affected us. In fact, our business is pretty strong because we began offering ad specialities and encouraged our sales representatives to sell them. We are also doing well because we provide full service to our customers, something they usually don't get from our competition—direct-selling manufacturers."
What products that have done well in the past are losing ground and how are you compensating for that?
Osborne: "Obviously, the traditional multi-part continuous forms are almost a thing of the past because it is simply a hassle to use them. While those forms were useful at one time, now they are just passé.
"To compensate, we are aggressively selling office supplies and technology products such as digital printing, statement processing and point-of-sale products."
Duke: "We're seeing a downtick in traditional continuous forms usage. To compensate, we're diversifying by getting into promotional products and direct mail."
Mahar: "We've made an entry into direct mail and commercial printing because there has been such a decline in demand for multiple-part forms."
Cronin: "We have been losing ground in the traditional forms market. To compensate, we've looked to promotional products and have been aggressive in going after commercial printing work."
Have any of your suppliers gone out of business or been acquired by another firm?
Duke: "The first one that comes to mind is Transkrit. Consolidation of the market makes it difficult for the distributor to find competing manufacturers and to locate specialized products."
Cronin: "There have been a few, and as a result we've had to forge new relationships with suppliers. However, where we used to see suppliers go the extra mile for us, unfortunately, now, we don't."
Hawes: "No. We have a stable of significant print suppliers, but if we did have one that went out of business we have a number of suppliers in the same product category that could supply us. It's about being flexible."
Mahar: "Yes, we've seen a few suppliers that have been ac-quired, but it didn't effect us because we don't depend on a lot of suppliers. Instead, we have five main manufacturers that we can rely on in times of need."
Have you had any problems attracting the right personnel?
Hawes: "No. If anything, it's gotten better. In the last couple of years we've seen a wide spectrum of quality candidates looking to align with distributors."
Duke: "Well, that ties directly to the economy where a year-and-a-half ago it was very difficult to find people, with the softening economy there are a lot more people available."
Osborne: "Yes, we still have a huge turnover with new hires. I would say only one in every five people that we hire stays with us for more than five years."
Where do you see the industry 10 years from now?
Osborne: "I see an increase in color business and a decrease in the cost for color output devices. And, as more technologically-savvy people enter the workforce, I expect end-users to purchase the equipment necessary to produce their own color printing in-house. As a result, we will have to be able to offer this service more quickly and efficiently than clients can do it for themselves."
Mahar: "In 10 years, I see distributors teaming up with manufacturers to create a completely different dynamic. The relationship between the two will be more supportive and more productive."
Hawes: "As customers continue to downsize, they are recognizing the advantages of outsourcing to providers such as ourselves. Electronic data management will also continue to grow "
Cronin: "Ten years from now the industry will need to be much more consolidated, which isn't necessarily a bad thing—there will be more profitability for those that do survive.
By Sharon R. Cole & Allan Martin Kemler