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Profiles in Printing

Despite competition, industry members explain why they’re optimistic

By Andy Brown, LaShell Stratton and Rebecca Trela

From Kenai, Alaska to Coral Gables, Fla., distributors and manufacturers are bullish about their prospects in 2007. Competition is fierce, and industry statistics show long-term declines in the total number of printing companies and employees, but the companies profiled here have found ways to prosper. The profiles are organized by region.

East:

Maintaining a “Culture of Yes” as Your Company Grows

“Print as a commodity in and of itself has matured and the industry is ‘doing well’ at this point, though only due to the overall economy,” says Bill Woods, CEO of The EPI Companies, a manufacturer in Marietta, Ga. “Specific companies are doing better or worse than others based on their leadership in the industry and their willingness to invest in people and offerings that bring additional value to the customers.”

Woods should know. In addition to being on the board of directors for the National Association of Printing Leadership, he also heads a company that has diversified its products and services for several decades. Now EPI’s product offerings include both traditional and digital print as well as cross-media services like logistics, mailing, promotional products, creative services, corporate graphics and merchandising. The company stays away from the local market, selling mostly to national and international clients. This year, EPI’s biggest challenge hasn’t been bringing in clients but consolidating its seven facilities down to just two and “imparting our new culture to the new hires,” Woods says.

“EPI will continue a 20-year trend of compounded growth exceeding 15 percent per year,” he says. “We plan on adding staff to support that growth and we will continue to improve upon our various service offerings—adding new ones when they can bring additional value to our clients. We will also continue to market our services to corporate clients.”

But Woods foresees some challenges in the future. It will probably be “maintaining the company’s ‘culture of yes’ while we grow upward of 300 employees,” he says.

You Are Your Customer’s Purchasing Department

Joe Morra, principal of Jamstic Graphics Inc., Brooklyn, N.Y., has worked in the printing industry for nearly 40 years. He started by selling forms, primarily large-volume orders to retailers, but over the years added pressure-sensitive labels, promotional products, marketing collateral and more. Though he admits his career is winding down, Morra has no plans to exit the industry soon. “I wouldn’t still be in this business if I wasn’t optimistic,” he says. “The industry has changed. It’s constantly changing. That’s the great thing about it.”

The most significant change now is the widespread adoption of digital printing technology, Morra says. He compares it to the past, when printers made the transition from letterpress to offset equipment. “I’m old enough to remember going from letterpress to offset,” he says. “All the old guys back then complained.” Instead of resisting change, Morra suggests that up-and-coming generations embrace it. “If I was 20 years younger, I’d definitely get more involved in digital printing, and maybe not as a broker,” he says. “I tell my young vendors that have offset shops to go digital. It’s here now. Anyone that tells me different is nuts.”

One reason digital printing has caught on is that it makes 4-color printing more accessible. “In the past, when someone wanted 4-color work, if they didn’t want 10,000 pieces minimum, it was cost prohibitive,” says Morra. Now customers can order much smaller volumes and still afford full color. Industry veterans will debate the quality of 4-color work on digital versus offset presses, but Morra says they miss the point. Customers see the difference in quality as negligible, especially when they compare the difference in price. “The bottom line is cost,” says Morra. “The customer says ‘I want these 1,000 pieces of 4-color work to be great.’ The distributor says, ‘Here’s the cost if we do it offset, and here’s what it costs if we do it digital.’ The customer looks at them and says, ‘I’m still getting my message across [with the digital piece].’”

Competition, Networking and Direct Mail Characterize Sunny Locale

Patrick Veltri thought the New York/New Jersey market was competitive. Then he moved to South Florida. “It’s highly competitive,” he says. “You must have extremely good pricing. Starting from zero in an area that you don’t know is a challenge.” To make up for this, Veltri seeks—and finds—a lot of orders through business clubs and networking groups. “Everyone there knows who you are and what you do and they’re willing to talk. This is a much more viable business plan than, say, making five or 10 calls just to get one interview.” When not out on sales calls, Veltri says, he likes to work by the poolside at home.

After the 9/11 terrorist attacks, security in South Florida changed dramatically, the Coral Springs, Fla.-based distributor says. Making cold calls or visiting an industrial park is a more difficult experience. Coral Springs is a city of 117,000 on the edge of the Everglades west of Boca Raton. Due to zoning ordinances, it is the only U.S. city where McDonald’s signs do not have the golden arches.

Although Veltri, who has been in the print industry since 1976, sells signs, banners, decals, brochures and mail services, among other items, he has seen a dramatic rise in direct mail campaigns in the local market. “Obviously the internet and digital technology have made a radical impact on the print industry,” he says, “but that money just comes out of one pocket and goes into another pocket. Even if things change there is still money to be made.”

In the heavily populated housing developments of South Florida, there are a lot of real estate companies vying for attention in a small space. “You’re constantly getting opportunities to bid on postcards and mailers for the real estate people. And they like to hit the clients with hard copy—I’m not so sure the internet is going to squash printing yet.”

A Distributor Adds a Quick-Turnaround Digital Print Shop

In the 12 years he’s been in business, John Rutledge, president of Greensboro, N.C.-based Piedmont Graphics, has seen the speed of everything increase. The company has dropped much of its business forms sales and placed new emphasis on short run commercial jobs and fulfillment. They also handle more ad specialties every year, he says.

“I’ve seen the printing industry change,” Rutledge says. “It keeps moving toward a quicker turnaround.” Recently, Piedmont installed a digital print center at its facility to accommodate short-run digital jobs and attract business. “We needed to put it in because of our lack of quick-turn access with the vendors we have now,” he says. The company still shops out digital jobs to vendors for overflow and backup.

Greensboro, the easternmost point of the “triad” of Winston-Salem and High Point, N.C., in the north-central part of the state, is a competitive market. “There are a lot of commercial printers in this area because of the furniture industry,” Rutledge says. In the coming year, Piedmont will continue improving its digital print center and will be hiring a sales rep to bring on new accounts. “Setting up the equipment is easy. It’s all the other things you add, like bindery, that make getting into the business complicated.”

Invest in Technology for Long-Term Survival

Part of Unity Printing’s success comes from adopting new technology as it gains a foothold in the industry. For example, the company invested in computer-to-plate technology and realized improved efficiencies in its workflow. “It’s such a time and labor savings,” says Jay Ernette, president of Unity Printing, Latrobe, Pa. “A human being can’t do the same tasks that fast.”
Technology innovations occur so quickly now, says Ernette, “that we’ve had to make significant capital improvements to keep up. Things we used to do, people now are printing on laser printers.”

This year, the company will invest in a digital press to enhance its short-to-medium full-color capabilities. Unity Printing targets financial institutions, health care organizations, colleges and universities, and manufacturing companies. Ernette is optimistic about 2007: “I think there will be moderate growth. Maybe four to five percent.”

Unity Printing’s strategy focuses on long-term competitiveness, but that’s a challenge in the industry’s current state. The company continues to compete with printers who haven’t made the same long-term investments in their equipment and processes. Those companies often are desperate to survive and subsequently drive down prices to win clients. “We’re still competing with mom-and-pop copy shops that are barely hanging on,” says Ernette. “We just have to weather the storm until some of these companies fizzle out.”

Surviving in the printing industry means constantly responding to new developments, Ernette says: “I think change is really important. When you see which way the industry is headed, you need to make changes on the fly. You’ve got to move.”

Central

Expand Services, Build Relationships

The Alamo fell in 1836, but its defenders’ fighting spirit still exists in the San Antonio business community. Competition among distributors is fierce. They battle for clients, even if it means offering prices that leave little room for profit. Don Schaefer, owner of Infiniti Marketing, Bergheim, Texas, set himself apart from the rest of the field. “If you offer service, sometimes that’s enough for a customer to do business with you, even if your price is a little higher,” he says. The strategy has paid off; Infiniti Marketing has grown each year since it was founded. In fact, Schaefer’s biggest challenge in 2007 is managing his growth. He plans to convert a part-time employee into a full-time employee to help run daily office operations. “It’s going to cost more, but I think it will allow me to go out and do what I do best—sell,” he says.

Schaefer also sees his success in 2007 tied to existing customers. “I think [the key is] penetrating my existing accounts even more, letting them know everything I can do,” he says. Infiniti Marketing already offers promotional products, business forms, commercial printing, apparel and design consultation, but Schaefer continues to explore new products and services. He sees an opportunity to move from sales of index tabs into turnkey filing solutions. He attended a class last year on filing and folder systems, and plans to increase his knowledge about them this year. “I think it’s going to be a good year,” he says. “There are all these things you can worry to death about, or you can just go out and sell.”

Take Care of the Customers You Have

Lippmann Printing Inc. had a blockbuster year in 2006, and owner Rich Lippmann expects the St. Louis-based company to continue growing in 2007. “We’re up 23 percent for 2006,” he says. “I can see double digits for this year.”
The manufacturer credits its success to a number of factors, not the least of which is an investment in marketing. “When things get bad, a lot of businesses cut their advertising budget and don’t do direct mail. That’s not what you should do. You should have consistent marketing throughout the year,” says Lippmann. “I don’t have a marketing background, but we test different things. If you do that, you find out what works and what doesn’t.”

Industry trends also favor the company. As smaller printers consolidate or exit the industry, Lippmann Printing has picked up their 1- and 2-color print business. “We take the place of the local print shop for a lot of distributors,” says Lippmann. Another trend—increases in paper prices—also helps the company…or at least it doesn’t hurt. Lippmann’s sons own a paper company, allowing him to buy direct and minimize the impact of rising costs. It’s those costs that will pose the biggest challenge for printers during the coming year, Lippmann predicts. “Printers continue getting increases and aren’t able to pass them on,” he says. “You have to be more creative on the back end of your business and see if you can become more efficient.”

Manufacturers that streamline their production successfully can look forward to the future, despite rising costs. “I think the independent distributor market is going to grow,” Lippmann says. He sees the distributor channel winning over clients that large, direct-selling organizations can’t service with the same one-on-one relationships. In fact, if there’s one piece of advice Lippmann has for other manufacturers and distributors alike, it’s this: “Don’t constantly worry about new business. Take care of the customers you have.”

A Distributor Charts His Own (Profitable) Course

Chris Casey, president, CEO and sole employee of Paladin Printing in Hudson, Ohio, is the first to tell you how happy he is to be a one-man band. “Sometimes I chuckle at these people on the DMIA listserv or in the magazine who have all sorts of complicated situations due to the volume of their business or how many employees they have,” he laughs. “I don’t have to worry a lot about a big payroll and so many other factors that larger businesses do. As long as I stay busy and keep working, I’ll make a decent living.”

Casey, who has been in the print industry for more than two decades, says he enjoys working for himself from home. “I started out in Cleveland working for one of the majors. I worked out of state and that was really hard.” In 2003, he says, he took off on his own and hasn’t looked back.

The business has always been competitive, but there are enough opportunities in the Cleveland area for everyone who wants to sell print, he says. “The products have changed so much. Technology can help you, but you have to keep offering new ideas and helping people creatively market themselves in a print media format.” In that way, he says, it’s interesting to be constantly challenged. One thing he doesn’t sell much of is promotional products, which rarely yield a repeat order and are more difficult to pitch.

Over the years, Casey says, the print industry has been squeezed, but “at no time in America was everything bluebirds and lemonade. There are challenges every year no matter what.” Next year, he anticipates a surge in business because it’s an election year. “Everyone spends money then; everyone is in an eager mood.”

Cutting-Edge Press Differentiates Plastic Card Printer

At Plasticprinters.com, this year’s hot Christmas gadget wasn’t the PS3 video game console that customers camped out for. At the Hasting, Minn.-based manufacturer, a new six-color card press, one of only a handful in the country, helped ring in a merry new year and a profitable season.

The year-end holidays are the company’s busiest season, with sales comprising mostly gift cards for retail business. In other seasons, the company also offers plastic membership cards, VDP services, phone cards, specialty cards and add-ons such as encoding and embossing. “This market has only grown,” says Mike Bateson, chief operating officer at the family-owned business about 20 miles from Minneapolis. “Gift cards are the number-one gift in America. They’ve become more acceptable to give and people like them, because it allows them to go wherever and for whatever they’d like.” Bateson expects the market to expand in coming years.

The company, which prints about 20 million cards a year, currently touts a new program of smart cards, which respond to electronic readers at retail and chain food establishments. They’re equipped with passive chips that work in close proximity, says Bateson, more like library EOS tags than active RFID transponders. Plasticprinters.com also recently purchased a new building that’s being remodeled and plans to hire four or five employees in the coming year.

“Business is good, partly because we’re the only one in our local market, but partly because we’ve built a real solid reputation in the industry,” Bateson says.

Face-to-Face Selling Strengthens Relationships

John Schmudde, owner of Wood Dale, Ill.-based Stellar Graphics, thinks the local and national business environments will bode well for his clients next year. He aims to grow with them. “I think the market’s going to stay strong, and the economy’s going to be good, and my customers will do well,” he says. “I’m more successful working through my good customers and increasing what I do internally with them. My goal is to strengthen those relationships.” As committed as he is to his goal, Schmudde acknowledges that it’s sometimes tough to stay the course. “We’re a very small company, and I’m the only salesman,” he says. “It’s very easy to stay in the office and take phone calls. The challenge is to be in front of customers, showing them different ideas and concepts, and frankly, picking their brains to find out what their needs are.”

Schmudde doesn’t meet with clients just for the sake of meeting with them. He constantly seeks ways to improve their businesses and offer services and his expertise. “I always try to grow in the print and mail side,” he says. “I try to do more mailings for my customers, try to work with them to incorporate digital applications.” Schmudde hopes that maximizing face time with clients will insulate him from another aspect of the industry—price competition. “The biggest challenge [right now] is pricing,” he says. “Everybody’s sharpening their pencils. We’re trying to devour each other.”

West

Hot Printing in Icy Alaska

A week before Thanksgiving, and it’s already 5 degrees below zero as Dustin Aaronson, principal of Copy Cats Printing and Design, starts his workday in Kenai, Alaska, several hours southeast of Anchorage on Cook Inlet. This time of year, the sun rises just after lunch and sets slightly after dinner—a mere 7 hours and 20 minutes of sunlight. No wonder Aaronson, who has owned and operated his own print shop for 13 years, describes it as “not an easy life.”

“It’s an expensive place to live and work, because everything has to be imported,” he explains. “Incoming freight bills are horrendous, because everything comes out here on a plane.” Even items shipped at ground rates are flown in, Aaronson says, because Copy Cats is nestled away in rugged terrain that proves difficult to navigate. “I hate to say this,” he laughs, “but our mountains make the Rockies look stupid. Think of the Alps. It’s just a beautiful place to be.”

Kenai is a small town of about 6,000, so Copy Cats doesn’t need to a lot of advertising because the residents are familiar with the business. Business is growing, Aaronson says, and the firm is moving into advertising specialties and whole-concept packages. As tourism season starts in the late spring, he expects to see a lot of 4-color brochure work after the first of the year. Right now, the shop handles several 4-color jobs per week, mostly restaurant menus, brochures and mailers.

“Actually, we’re doing fewer direct mail pieces now,” Aaronson says. “We’ve started designing and maintaining websites for our clients, and once we get a smaller client hooked on a website, their strategy changes.” Those campaigns are followed by a 4-color postcard touting the site, as opposed to a two-fold black-and-white newsletter.

“There aren’t many people out here,” he says. “You’ve got eight months of winter and three months of ‘warmer.’ It’s pretty, but for the most part it’s dark outside and people work their fingers to the bone.”

Excellent Service Distinguishes Distributor Who Seeks to Manage Growth

Andy Smalley, president of Phoenix-based distributorship Creacor Print Solutions, knows that his home-based business offers something FedExKinko’s and Office Max can’t: service. Smalley, who held positions at both coast-to-coast conglomerates, handles $1.2 million in annual business by tailoring his approach to every client.

“I have a huge competitive advantage with customer service,” he says. “I’m not in business to bring in the masses or go after the retail environment. I want to bring on customers strategically, employ new technology to the customers’ advantage, and develop custom solutions.” Currently, Smalley says, he handles 25 to 30 major accounts, and plans to grow up to 60 accounts as time allows.

“Managing growth is a challenge right now,” he says. “The printing industry is doing great, due to all the new technology, and using that web-based technology we can compete against big box stores because the overhead is so low.” When Creacor is busy, he works with partners to handle overflow work, but tries to keep everything in-house.

Creacor’s core business is in training manual reproductions and conference materials, Smalley says. As the cost of 4-color work falls, and customers realize the return on investment in direct marketing VDP projects, he has acquired those jobs for retail firms and franchised restaurants based in the Phoenix area.

“I think the printing industry is doing great,” he says. “Ink on paper is never going to die. If you’re able to provide the services your customers want, they’ll stay with you.”

Focus on Digital Printing and Fast Turnaround

John Hodgman, president and CEO of Direct Connection Mailing & Marketing, LaVerne, Calif., says the direct mail service provider has to compete with both small mom-and-pop firms and large publicly-held firms in the Southern California market where most of its clients are based. Though the company mostly handles direct mail projects that are fewer than 250,000 pieces, clients’ mailings can range from 1,000 pieces to 1 million.

“Our goals for the coming year are to continue building sales and achieving overall growth of at least 10 percent annually,” Hodgman says.

Hodgman has noticed certain trends in the printing industry that led his company to invest in offset color printing and digital printing. “The trend I see in our business and market is small-run color printing, including digital color printing,” he says. “That’s why I invested in digital presses and a small-format color offset press with CTP prepress. The other trend is that even more customers demand fast turnaround on jobs. Those companies that meet their clients’ demand for fast turnaround times and maintain quality will thrive. Those that can’t will perish.”

Hodgman also sees impending Postal Service changes challenging the direct mail business. Parcel rates will switch from solely a weight focus to a weight and shape focus later this year, subsequently increasing the price for many mailings. “The postal service is increasing postage rates in May by an average of 9 percent, which will hurt direct mail volume,” he says. “Postal reform is urgently needed in order to stabilize postage rates, which in turn will drive direct mail volume up.”

Survive by Selling More Than Print

Intra-Media Solutions constantly evolves. Not only has the company recently changed its name from Intraform Inc., it continually enhances its product offerings.

“Now it’s very broad,” says Greg Marks, president of Intra-Media Solutions, Phoenix. In addition to traditional print pieces, Marks says that the company produces “lots of internet communications: email marketing, webinars and even e-learning programs. We talk to customers about our integrated offerings.”

Marks says that Intra-Media sells mostly to clients in the Arizona and Southern California area, a competitive market. The company is trying to expand its client list and services. “We’re always seeking large customers and we recently hired three new sales professionals,” he says. “We’re going to increase the size of our graphics department to offer more creative services.”
Marks says that overall, the industry is experiencing an upswing. “I think the industry is doing fantastic,” he says. “It’s booming from our perspective. We’re seeing more marketing related pieces, VDP and commercial print. Promotional products are also booming. We started selling them about six or seven years ago, so we’ve had a chance to get the formula right.”

But he does see future challenges for his business and the printing industry. “A couple of months ago I would have said the biggest challenge for us was finding sales reps who want to sell print,” Marks says. “The challenge for traditional print distributorships is that they will have a hard time finding kids who just want to sell print. Folks that aren’t able to diversify or find those kids will have problems.”

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