Print Solutions Magazine, May 2005 -- 433 E. Monroe

Since the late 1990s, distributors and manufacturers have discussed e-commerce excitedly—and anxiously—at industry events. Much of the early discussion focused on the obvious benefit of e-commerce: empowering end users to order online at any time and from virtually anywhere.

Today, e-commerce means much more to printing firms and their clients. Just ask the three industry pros who shared their companies' e-commerce initiatives and new business models during the session "E-Commerce, the Revenue Stream!" at PSDA's Spring Management Conference, held April 13-16 at JW Marriott Starr Pass Resort & Spa in Tucson, Ariz.

Joel M. Chyke, CFO and owner of Nashville, Tenn., distributorship FSi and a DMIA Board member, was the first person to speak. In 1999, FSi's sales were $4.4 million. Last year, its sales were $16 million, and 95 percent of incoming orders were placed online. "E-commerce has been our most significant tool for success. It has changed our business model, sales model, compensation model and service model," Chyke said. "Our customers now are loyal to the company as well as the salesperson. That's huge." Coupled with an ambitious, aggressive approach to warehousing and distribution, e-commerce enabled FSi to access regional and national accounts, compete against the majors, expand the products and services it provides, and sell programs instead of products. (The company is featured in our cover story, "E-Commerce Excitement," beginning on page 42. The piece includes tips from Chyke and others about launching or improving your e-commerce strategy.)

Gail O'Roke, CDC, CEO of Hayward, Calif.-based distributorship Independent Business Group (IBG) and DMIA's 2002-03 president, followed Chyke. IBG has increased its office supply volume by 19 percent a year since implementing Dealer Station, the online solution provided by software company DDMS, in 2000. The company sold more than $4 million in office supplies last year. O'Roke described how Dealer Station gives clients more than the ability to order 24/7; it incorporates features that mirror the benefits of working with IBG's office product specialists. Four such features are departmental billing and shipping; "best-value item substitution," which recommends similar, cheaper items when customers select products; multi-level approval options; and spending controls based on clients' budgets.

Maverick Label, Edmonds, Wash., has become a model of profitable, internet-based print sales and service, and its CEO, Mark Trumper, followed O'Roke. He awed attendees by explaining how the internet is his company's business. Every order—more than 10,000 last year from approximately 8,000 customers—arrives online through Maverick Label's "instant quoter" system, and search engine optimization is the firm's main marketing tool. "In the web world, a nice back side is everything," said Trumper, DMIA's 2001-02 president.

FSi, IBG and Maverick Label have different e-commerce systems and goals, but two important similarities stand out:

� Each company eliminates human "touch points," enabling them to decrease transaction costs while employing fewer salespeople and customer service personnel than similar-sized firms. (FSi is a $16 million company with two salespeople; MaverickLabel.Com doesn't have a salesperson.)

� Sales have improved annually since launching their e-commerce systems, and average online orders are higher than ones placed via phone or fax. (IBG's average online order is 25 percent higher.)

According to Gartner Research, 20 percent of business-to-business commerce will occur online this year. What is your company doing to get a piece of that action? The growth of the printing industry will be sparked by tomorrow's e-commerce.