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.

“Entrepreneurs today are paranoid, afraid that even their friends will steal their business. Yet a creative collaboration with your biggest competitor in the same industry may be the best opportunity for revenue and survival,” says Martin Zwilling, CEO and founder of consultancy Startup Professionals, Inc. For industry cooperation and strategic alliances to work best, he says, printers need to clearly define when they are working together and where they are competing. “Your goal is to find a way to partner with your competitor in such a way that both parties can substantially benefit from the other’s resources—but without stealing customers or damaging anyone’s credibility.”

 

Trust is Key to Partnerships

Some printers have built their business models around the trade partnering concept. One of them is growll.com, an online wholesale printer that exclusively services and protects resellers. “Our accounts are rigorously screened to verify authentic wholesale status—we absolutely will not accept a job from an end user,” says Sam Vignjevic, the company’s director.

To partner with growll.com, printers complete an online application that is reviewed and verified by growll.com’s customer service department. Qualified printers receive a reseller kit, as well as a growll.com user ID and password that enable them to receive the online printer’s pricing for a wide variety of items. Vignjevic says the most common items ordered by print partners are business cards, postcards, brochures, catalogs, and posters. Most of those items are “gang run” with multiple orders on the company’s equipment in Greenville, SC.

Vignjevic says a growing number of orders from printers are custom jobs that often require personalization, and growll.com now employs a creative services team and mailing experts in addition to print production employees. “If you’re a printer, there’s no reason to reinvent the wheel or to turn away business,” he says. “We take our customer relationships with printers seriously, and make sure we protect their accounts. They grow, we grow.”

Another print company that is succeeding because of its trade partners is WebbMason, Inc., a Hunt Valley, MD-based firm that grew sales 31 percent in 2010 to about $89 million. It operates a commercial print facility, WebbMason Commercial, as well as 20 US sales offices. “We want our customers to view us as single-source experts for on demand print and marketing technology, but we carefully pick and choose what to produce in house and what to outsource to trusted partners,” says Doug Traxler, the firm’s executive vice president of sales and marketing.

Believing in the importance of openness to its clients and the integrity of the print supply chain, WebbMason created a National Preferred Partner program that now includes 150 trade printers, representing about $1.5 billion in manufacturing capacity. Traxler says the companies are prequalified to meet WebbMason’s quality, turnaround, and pricing requirements. These firms include book printers, promotional products suppliers, commercial printers, and others.

“At the end of the day, it’s our reputation on the line, and it’s our responsibility to deliver value to customers,” Traxler says. “They look to us to get the job done, but generally aren’t concerned with where it’s done. Our trade partners represent our goals. We believe we can keep moving forward and grow sales, and we can accomplish that together.”

Expert: View an Industry Partnership Like a Marriage

If you’re considering forming a strategic partnership with a fellow printer, the key is to find a company with unique capabilities and insight — but with the same core values as your firm, says Ed Rigsbee, author of “PartnerShift: Developing Strategic Alliances”. “The best advice is to treat the relationship like a marriage. You must successfully deal with the same kinds of fears, hopes, and issues.”

Keep these points in mind, he says:

* Who will do the chores? Partner responsibilities and activities make the relationship a success or failure. Too often this is the area where unrealistic expectations of one another present themselves. Be clear when you commit to which company will be doing what.

* Make it official. The palest ink is better than the most powerful memory. When possible, articulate your partnership in writing, including detailed explanations of activities, expectations, and responsibilities of each company. This document can be your guiding light or road map for your successful alliance.

* Be considerate and respectful. While each of you is responsible for your own success, you should also consider how your actions will affect your partner’s business. Be aware of the things you do and how your actions might create a need for your partner to change its strategic plan. Confer before you act.

* Seek counseling if necessary. What happens when your partner takes all the covers? Open communication is critical. When roadblocks occur, it may be necessary to seek third party counsel for mediation. In this situation, authenticity and openness are meaningful.

* Have fun. Embrace new possibilities and reap the rewards.

Darin Painter, a frequent contributor to print industry publications, is owner of Writing Matters (www.writingmatters.com).

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