Something to Think About - Where are we heading?

[mediavic]

We’re all in this Together.​

Things are tough in the printing industry. We are seeing materials cost jump up and prices tighten which makes for lower profits and/or lower sales figures. As if this hasn’t been tough enough, we are seeing more competition from “Communal” (gang run) printing facilities that have and still are drastically hurting the smaller commercial print shops. Many do not understand the impact and the long term effects of such facilities on our industry.
The obvious – Small and medium sized shops will close down; especially those who have serviced the wholesale market printing “commodity type” printed materials - such process color flyers, brochures, postcards and business cards. Some may close, some may try the “if you can’t beat ‘em, join ‘em” approach and go up against the big boys only to find that they simply do not have the money needed to ramp up such an operation.

Less printing supplies will be sold. Whether or not a shop closes its doors, it’s undeniable that the communal, aka: Gang Run approach to printing uses fewer materials. For example, the typical flyer, 8 ½” x 11” printed in four color process on two sides would ordinarily take four plates assuming it was run as a work and turn on a 12x18 or similar sized sheet. If you have 8 shops all doing one job each, that translates to 32 plates being sold. However, if those same jobs are run at a communal shop, it would only require 8, albeit, larger plates. Along with that, the chemistry, ink, cleaning materials, labor, etc. are all reduced substantially. So, we are seeing a decline in the supply businesses as well.

Less paper will be sold. Once upon a time, clients wanted good paper, paper with body, and a nice hard printing surface, or a specialty finish. Most communal shops however, only use cheaper, lower-quality, foreign paper. Clients are now tempted by these cheaper products and many opt to leave the good stuff on the shelves. As time goes on, many paper mills will discontinue the higher grade stocks as they are not cost effective to make it in lower quantities. This ultimately translates to fewer choices for the end user, lower sales and profits for paper companies, and ultimately the closure of paper mills.

Jobs will be lost. Of course one can argue that this happens in many industries experiencing change. However, we can’t forget the talent that is lost when qualified people leave the industry, disenchanted and demoralized by this fast forward movement to mediocrity. Yes, our clients will pay less, but they will get less.

Standards will be lowered. Because the print jobs a grouped together, a default setting is normally used, where densities are adjusted to industry averages. These work ok on jobs where all aspects of the job are perfectly adjusted to run on this way. However, jobs which contain digital assets that are “outside” of the norm will have unpredictable and sometimes unacceptable results.

Misc. Collateral Effects. Less labor = less tax revenue for our government, less insurance for the broker, less for associations, the list goes on.

So what should you do? A few shops have reinvented themselves, specializing in just a few different products where they can be competitive while others have merged to include themselves in this bottom-feeding market place of the gang run world. I know it’s cheaper to send your next flyer job to a gang run house, but maybe in the long run, it’s better that you don’t. I know you might be inclined to tell your customer they can get it cheaper from a gang run house, but in the long run maybe its better that you don’t be and agent for the guys taking you down. Maybe this is just sour grapes, but we will all be drinking from the same bitter cup sooner or later.

Let's hear your opinion on this very controversial issue!​

What will you do?

 

[1Integrity]

Customers decide where they want to shop. If higher priced equals personalized service, some will gladly pay for the service, while others are happy to cut costs at the expense of service.

Free Enterprise--> Can't demand customers to pay a local guy.

Best strategy: Study competition, find weak points and capitalize on your own strengths. Optimize process, Make it easier for customers to order from your shop, and make it a quality output on time every time. Showing ROI on these can be hard since clients don't always measure how many of their own manpower hours were used to get the same order that a small shop used to do for them, but it is often real enough to point out. The personal touch and continued One on One contact is a strong help also.

Ultimately, technology advances are opening doors for the small guy to compete against anyone. Key is to be open minded to learn what you need to outperform your competition.

fyi: The large print shops I talk to, are often hurting worst than us. We buy a machine for 50k and go ouch. They buy a machine for 5 million and die often unfortunately. Keep in touch with customers business and integrate technology advances in your shop. You'll be surprised what a great asset you have in your loyal long term customer base.

 

[Warren]

Mediavic,
You have a good grasp of the state of the industry. True enough, paper production has fallen quite dramatically over the last several years and there are plans to downsize operations even further. Several articles in Printing Impressions magazine have noted this but the core editorial staff seems to want to still paint a rosy picture. Additionally, the quality of materials have fallen as manufacturers use less expensive products and reduce the ratio of expensive elements in their ink, paper and fountain concentrates while claiming that their products are becoming more environmentally friendly. A conversation with a company owner that specializes in die-cutting, foil stamping and embossing has noticed that the composition of paper has changed causing the dies and cutter blades to wear significantly faster and ink just refuses to dry.
Fewer jobs are being sold and print volume cumulatively has been decreasing steadily over the past five years. The March 2008 issue of Printing Impressions magazine states that printing sales are increasing (p. 18, Facts and Figures). While prices have increased only slightly, wages have increased causing a zero increase in margins. All in all, the Cheryl Adams, the managing editor of Printing Impressions magazine stated the obvious: “with the number of printing establishments consolidating, laying off or going out of business, the graphic arts is not a promising industry in which to look for work, let alone a career” (March 2008, p. 28, para. 12).
Standards of printing quality have already been lowered as customers’ require shops to print low resolution, highly pixilated graphics that are difficult to read or focus on to save on the cost of having the printing professionals generate adequate content to be printed. As print buyers attempt to cut costs even more dramatically, they are turning to offshore firms and comparing the savings to the higher cost of having the jobs done in the U.S. where wages are higher, environmental considerations are more stringent, health benefits are demanded and transportation costs are higher as a result of fuel, taxes and maintenance requirements.
Print volume has declined across the board causing some printing firms to consolidate or just go under. For the first time in the thirty years that I have been in the printing industry, competent employees are leaving printing altogether causing a vacuum. The demand for skilled workers is rising slightly causing wages to rise even considering the number of shops that are going out of business.
Where is it leading to? In the 1950s W. Edwards Deming introduced the Japanese to the concept of Total Quality Management. Instead of only looking inside of the shop, Deming looked at the total supply chain from beginning to end. For our practical application, printing firms must know our customers’ business as well as our own. It means that the elicitation of customer specifications must be completely accurate every time and the translation into trade language (job jackets) must be complete and equally accurate, every time. An introduction to ISO 9000 to printing firms will help put an end to the 1:10:100 ratios of losing profits because of mistakes. If you are in the printing industry, you already know that when business slows down the propensity for mistakes grows. I don’t know why, but it’s a fact in the industry everywhere. Fixing a mistake costs ten times the amount of doing it right the first time. It all starts from the front office where the job comes in.
Find a niche in the industry by looking for what the customer needs and filling it. There is money to be made out there and you can grow your business but you must meet with your customers often to find out what they need and match it to what you can provide. I’m not going to lie to you, you are going to have to break your back bending over for your customer. Focus on quality in every area of your business from sales to delivery. Every time your delivery guy drops off a job make sure you include a thank you note with the job and make sure that you MAKE the delivery guy say: Please let us know if there is anything we can do for you”. The last impression is just as important as the first impression. (and that is not a pun!).
Best of luck, and God bless all my brothers and sisters in the printing industry,
Warren

 

[Travis Young]

This makes for quite interesting reading 13 years later. I was a production manager in a medium size shop back then and we were battling away trying to gang print business cards and flyers on our old 4 colour MO in order to compete with emerging online printers, often trying to replicate spot colours in CMYK. It was a good time to leave the industry and that's exactly what I did. Between offshore gang printing and digital technology being embraced by both our competitors and clients, we were slowly being pushed out of the market.
2008 was the Australian iron ore mining boom and any able bodied man prepared to go and work in the desert for a month at a time could make a small fortune.

I now have my own tiny little one man band business with an antique single colour GTO 46, Ideal guillotine and conventional plate maker. Incredibly, it's a pretty good time to be in the industry. You can buy a setup like mine literally for a few hundred bucks, take it home and plug it in. No loans for machines that are depreciating quicker than they can be paid off and if you buy something with Heidelberg stamped on the side, very few problems (touch wood).
Poor quality low resolution work is now common place and it's pretty much all digital, so a nice bright, strong spot colour is ironically now a selling point.

Even back in 2008 there were two things that were plain to see. Gang printing equals $$$ and one pass technology is the only way to do things (maybe two if it's double sided).

The online world is absolutely inundated with digital printers who offer every product you can imagine at extremely competitive prices. Is it worth attempting to compete in that market?
Wasn't then, isn't now. A lot had no choice sadly.

So do I offer business cards?
No.

Docket books?
The only time the numbering unit gets inked is when I print my own job tickets.

Letterheads, with comps, stationary?
Never in a million years.

Envelopes?
Dead set could not be bothered.
Good way to wreck a blanket.

Coated papers?
Sorry. It's 80 GSM copy paper or the highway.
Why? Because I can buy it at kmart (our version of Walmart) in reams of A4 at a lower price than a paper merchant can supply full sheets.

I don't target that work and if it comes in the door I send it away.

If you've been in the industry for any period of time you will be thinking, but that's all bread and butter work for that press. No, IT WAS.
All the printers who drowned 10 - 15 years ago had a portfolio of work that slowly got taken away from them by bigger fish and modern technology. What's more, most had substantial overheads that needed to get serviced by that work. A pretty bleak picture.
If you start up today with a blank canvas (and no overheads), you don't have that shrinking portfolio, and the option to chase that type of work basically isn't there. Copy shops do business cards for less than it costs to make a plate.

I had a friend who owned a small shop with a digital press and he said to me that he would turn away any job larger than 5000 copies. He's only one operator but it highlighted the chink in the digital armour.

So I chase the work I'm set up to do competitively. High volume, single sided, single colour. It's out there. What's more, if I market to the right businesses in the right industries at the right time, I can actually gang print using spot colours.
Sound unrealistic?
My record is 4 plates at 3 jobs to a plate all in the one colour. 12 jobs. 4 plates. 1 washup. No staff, no overheads, just me.
Businesses looking for large quantities of DL flyers or take away menus find it hard to get a competitive quote. They are shopping on price, not quality. Hit 5000 copies and offset wins every time.
Offer them an extra 10% off and they'll happily wait a week until another job in the same colour comes in. Or a 10% discount to go with a colour that's scheduled to go on the press.
Of course you need to build a rapport with your clients, but are they expecting the best quality in the world or do they want the delivery guy to ask is there anything else we can do for you?
That model is gone.
It's Facebook or text messages and the job travels in the post anywhere in the country.

Am I a big guy? Of course not.

Do I deal with large companies and big accounts? Not very often.

Do I make better money than I would working for wages on a machine that was destined to become scrap metal? Sure do.

The days of the small to medium print shop with a few staff, a rented premises and a front counter are coming to an end (or pretty much gone), but there's definitely still a place for small, conventional offset presses.
You just need to think outside the box.

 

[mantman]

I fear that our biggest problem is not gang way printers or digital print shops. It`s the decline of people who want to print on paper.
Nowadays if you want to advertise yourself, you do it via Google/Facebook/Instagram etc. Sadly it is cheaper, WAY more informative and interactive compared to paper. I mean you click at their site and see videos, reviews, photos, even chat about it etc.

 

[Travis Young]

Any serious marketing campaign includes both online and print.
The big selling point for flyers is that they can target specific areas.
This is pretty appealing for Trades type businesses that offer a service rather than a product.
There's no online platform that can reach out to an entire suburb in a short space of time.
I find it's easier to sell a single colour flyer with links to a businesses online presence than it is to try and sell a full colour or larger flyer.
I say to people that the flyer doesn't need the information from your website, it needs the domain name.
Your average mowing guy or pest controller can pick up leads cheaper and closer to home with flyers than they can by paying a social media marketing company.
If they go and get double sided, full colour flyers printed on heavy gloss paper they probably won't see the greatest ROI, but throw me 120 bucks for 5000 single colour ones and then come up with another 300 to have them dropped and they'll normally pick up somewhere in the order of 100 leads. And they'll be genuine leads close to home.
If you can convince them to do it once, they normally come back.