Never Leave Money on the Table

Steve Brocker walks down a hallway at the headquarters of Western States Envelope & Label in Butler, WI, eager to listen to a presentation from a team that just arrived. He is hoping to hear details about new products that might help his company grow.

The surprising twist: The presenters now entering the conference room aren’t from a current or hopeful vendor. They are leaders at a competing printer—a nearby company that also serves as an outsource partner of Western States Envelope & Label.

“We have a trusted stable of printers that can handle orders we don’t produce in house,” says Brocker, vice president of sales and marketing at Western States Envelope & Label. “We invite some of those firms to meet with us. They take the opportunity to bring us up to speed on new trends, opportunities, and products. They want us to be fully aware of their capabilities. We would rather work with them than turn down business.”

Turning down business is not something the company does often. Its main plant can produce more than 12 million envelopes daily, and the firm offers more than 1,600 envelope and laser label products to its customers. “In the envelope and label niches, we bring a lot to the table,” Brocker says. But that doesn’t mean it wants to handle every order on the docket.

“Most businesses today don’t want to buy from multiple vendors, but the truth is that they also don’t really care who does the actual production,” Brocker says. “As long as the customer is getting maximum value, is thrilled with the end result, and views your company as the key reliable source, outsourcing can work very well.”

The main challenge, Brocker says, is developing trust in an industry that’s predicated on competition, not cooperation. (See the sidebar “View an Industry Partnership Like a Marriage”.) “Our outsourced print partners understand our culture and people. They understand how we do business, what our strengths and goals are, and what we expect from them,” he says. “Once those important things are established, then heck—they might as well move their plants onto our parking lot. The best partners become extensions of our staff.”

The reverse is true, too. Western States Envelope & Label gets many calls weekly from other printers, Brocker says, especially commercial printers that seek an outsourced partner for labels produced in-line on a flexo press or for customized digital labels requiring fast turnaround.

Moving to a New Mindset

Conventional thinking among printers—especially in a down economy—is to fight harder, “pound the pavement” more resiliently, and compete against other industry firms for business. While healthy competition will always remain a mainstay of any industry, printers are identifying new opportunities to work together.

Today, the print supply chain is less clear and linear than it was in the past. Internet sales have led to disintermediation, and no rules stipulate who can sell to whom. Also, some savvy firms are realizing the benefits of specialization rather than being “all things to all people,” and those niche-based firms are well positioned to gain outsourced work. Today, a substantial amount of print (some experts say as much as 30 percent) is bought by other printers from printers.

The competitor-centric model of business is common but outmoded, says Charles H. Green, founder of consultancy TrustedAdvisor Associates and co-author of “The Trusted Advisor”. Instead, he says, companies should focus on trust as their number one competitive advantage. “Too often, our beliefs harden and persist long after they’re no longer in sync with the world, driving behaviors that are no longer appropriate,” Green says.

In the printing industry, the cost advantage of volume production has been largely eked out, Green says. Instead, businesses overlap and intersect, and savvy firms realize their fiercest competitors can also be partners and even clients.