Lauren Hanna isn’t necessarily looking to invite new competition into her dealership’s markets. But the production print manager for Blue Technologies, based in Cleveland, sees an undeniable opportunity for dealers to not only go deeper with existing accounts, but generate net-new business among an ocean of vertical markets, in-plant operations, CRDs, print-for-pay providers and commercial printers through the sale of light production equipment.
There are ample reasons to consider adding light production printing to your product arsenal. This class of machine offers solid margin opportunities, with prices ranging up to $1 million, along with supplies and service. They’re available to the dealer channel through many of the major OEMs, including Canon, Konica Minolta, Xerox, Sharp and KYOCERA. The ability to build business through traditional and nontraditional substrates adds post-sale value, as does the need for finishing solutions such as binding, folding, cutting, laminating and other postpress accoutrements. Not to mention prepress and workflow accessories.
As for the buyers of light production equipment…they’re lurking within your own book of business!
But perhaps one of the biggest reasons to consider light production printing solutions can be traced back to the Great Recession of 2008-2010. During this period, many businesses tightened their belts, and one of the areas hit hardest was the marketing department. Budgets were cut to the bone and in-house marketing collateral fell victim to the crunch, which led to outsourcing. In recent years, however, the tide has shifted with improvements in the economy and the willingness of many verticals to reinvest in their own homespun marketing efforts.
“Over the last three or four years, we’ve seen a major increase in customers bringing marketing back in-house. They have a budget again,” Hanna noted. “The increase in funding for marketing is the real reason why dealers should get into production printing.”
Market Opportunities
Blue Technologies carries the Konica Minolta line of light production equipment and has enjoyed much success on the monochrome side with the bizhub PRO 1100 and the AccurioPress 6136 series, along with the AccurioPress C6100 and C2070 series digital color presses. Blue Technologies’ primary territories are Cleveland, Canton, Columbus and Sandusky in Ohio, where Blue Technologies supplies and services many in-plants (color placements to address branding initiatives), central reprographics departments (CRDs), quick printers and commercial printers.
On the vertical side, education has significant need for high-volume monochrome and color, particularly in the K-12 market, and accounts for roughly 10 percent of Blue Technologies’ production printing business. Both in-plants and legal firms have significant transactional printing work, with in-plants also providing a solid opening for colleges and universities with high-end marketing departments. Variable data printing is also fertile ground for digital production printing.
Blue Technologies entered the production printing space in the mid-1990s and performed well out of the gate with legal and financial firms in need of transactional printing. The dealer has been able to evolve its offering by staying current on equipment and printing trends, emphasizing a custom solutions approach. Hanna was hired into the role five years ago, and she has kept abreast of developments through trade publications and shows such as the annual Graph Expo/PRINT printing industry show. She also follows adjacent markets such as packaging printing to see how advancements in those fields could impact Blue Technologies’ small-format printing clients.
“It’s important to know what your customers are looking for, but if you can educate them during the conversation and provide insight as to something they may want to look at down the road, you can build a value-added reseller relationship,” Hanna said.
Print as Revenue
One of the more obvious differences between MFPs and production printing equipment is the latter has revenue directly or indirectly tied into the output. It requires a more nuanced sales approach and evaluation, taking into account the output product, usage and peak times, operator training and other variables. In addition to Hanna, Blue Technologies has an applications specialist to address the software and custom solutions that are funneled into the offering for that prospect.
“My team works with sales reps pre-sale to demo the machines and solutions, and ensure they understand the prospect’s unique production needs,” she said. “We also provide post-sales support. It’s important to remember that when these machines stop working, customers are losing revenue that’s generated off what’s being printed.”
Barry Simon, Datamax
Datamax of Little Rock, AR, with Texas facilities in Dallas, Tyler, Longview and Lufkin, provides clients with Canon and Konica Minolta digital production presses. Barry Simon, company president, notes that the Canon imagePRESS C750 is one of the more popular models, with in-plants accounting for the lion’s share of their sales. On the in-plant side, much of Datamax’s business is tied into religious, engineering/construction and government agencies, the last of which generate the highest volumes. Datamax also serves the commercial printing sector.
Datamax’s success in the development of its print production platform is due in large part to bringing in a dedicated specialist with a graphic-based workflow knowledge.
“Expansion has come from a multilayered sales approach creating a viable split program for primary account managers, then educating them on how to discover hidden opportunities currently being outsourced in accounts they call on every day,” Simon explained. “Also, you must keep the specialist focused on building relationships with commercial printing and data center prospects in the area since that is where the largest volume comes from. Those opportunities are fewer and farther in-between and typically take years of farming to acquire.”
Developing a Reputation
Building a reputation for selling production printing equipment is not for the faint of heart or those dealers looking for a quick-growth solution, Simon notes. He feels it takes years for an independent dealer to earn respect following the onset of the offering. This is particularly true in dealing with commercial printers.
“While (commercial printers) are all competitors, typically they all broker services to each other’s specialty equipment and know one another from previous employment engagements where they’ve worked together,” Simon stressed. “Dealers have to prove themselves in what seems to be a tight-knit vertical of business owners in the commercial printing industries and you must recognize that.”
Joel Running,
A&B Business Solutions
Opportunity came knocking in 2002 for A&B Business Solutions of Sioux Falls, SD, when one of its larger accounts expressed a desire to break free of the ink press iron and settle into a high-volume, high-speed digital black and white printer. As the dealer was not active on the production printing side, Joel Running, senior vice president of business development for A&B, sought counsel from a number of colleagues across the country who were well-versed on the subject. He also tapped John Longfield, the production specialist for A&B’s primary manufacturer, Ricoh.
The dealer started out methodically in selling black-and-white machines and gradually moved into color. Today, A&B is enjoying much success with the Ricoh Pro 8120 and 8220 monochrome, with several customers churning out one million to two million prints per month. The real “game changer” according to Running is the Ricoh Pro C7100 with a fifth color, and the dealer plans to offer the high-end C9100. To date, A&B has more than 50 units in the field and production printing now accounts for roughly a quarter of its $22 million of overall business.
Initially, A&B was placing units in the educational and government spaces. The dealer now has a solid book of business with in-plants and commercial printers. “It’s all about reputation and service,” Running observed. “In the production printing arena, companies aren’t willing to hand over business to you without knowing about your company, but when we started latching on to in-plants, we gained more references and it started to blossom from there.”
Building the trust and internal competencies (A&B has a number of production specialists) has been critical. Given that commercial printers already have a great deal of equipment knowledge, the dealer has to really perform a deep dive surrounding printer workflows and processes when they sit down with the client.
“Sometimes, a bit of luck is involved,” he added. “A commercial printer’s current vendor might have ticked them off, and they’ll turn to your dealership. You’ve got to be ready to step through that door whenever the opportunity comes.”
A&B also offers finishing equipment from Duplo USA (a Ricoh partner) for its full line of products, most notably its slitter/cutter/creaser lines to finish business cards, flyers and posters, to name a few. Given that Ricoh also partners with C.P. Bourg, A&B is exploring the possibility of offering in-line finishing gear. Running believes the dealership will also make a foray into wide-format printing.
Ted McLeod,
Gordon Flesch Co.
Gordon Flesch Co. (GFC), at $157 million in annual sales, is one of the largest dealers we queried. With more than 60 years under its belt, the Madison, WI-based dealership—which services customers in a multitude of verticals including education, manufacturing and health care—broke into production printing in earnest during the early 2000s, at a time when Canon partnered with Kodak to enter the black-and-white production printing space.
According to Ted McLeod, manager of print solutions for GFC, the dealership has been able to develop and enhance its production printing scope via quality service and equipment, the latter fortified by what he sees as Canon’s emergence as a leader in both the color and monochrome spaces.
The Right Tools
“Today in the color market, the imagePRESS name represents true press-like output with dynamic pre/post process accessories,” he noted. “And now the recent release of the Titan series from Océ has us very excited for the future of growth in the black-and-white market.”
GFC employs a team-based approach to selling production printing gear, bringing in technical specialists at different junctures during the process. McLeod echoes his fellow dealers on the notion that it is imperative to have deep insight into the client’s workflow needs and what is important to them.
“This will separate you from the competition when you can speak to what drives their business and prove you are looking to form a partnership,” he added.
Scott Schnabel, Centric Business Systems
Centric Business Systems of Owings Mills, MD, offers the Sharp and Ricoh line of light production equipment for in-plants, commercial printers and verticals including higher education, legal and religious. Scott Schnabel, executive vice president of Centric, notes the dealership has grown its platform via the development of the digital production systems while gaining an understanding of the trends taking place in printing technologies and focusing on workflows.
“Bundling the equipment with software solutions to optimize their workflow has been a key in developing end-to-end solutions,” he said. “Our growth in production print can also be attributed to ongoing training of our staff as well as our clients on the developments in the industry, with the equipment and the solutions and services available to support a highly efficient print environment.”
Dedicated production print specialists back Centric’s sales and support teams to help identify opportunities and customize solutions within the client base.
“When evaluating a production space, we find that factors like physical space, expected output speeds, overprint waste, turnaround time and other resources play a much stronger factor in the cost-benefit analysis than in a typical digital imaging sale,” Schnabel said.
Centric has enjoyed much success within the in-plant environment, where there are opportunities for both existing and net-new facilities that are becoming more popular and cost effective. Schnabel points out that large organizations who currently outsource print production can obtain significant cost savings by implementing an in-plant facility.
“There was a previous mindset where the same quality wouldn’t exist in digital production as it did in a press environment,” he said. “The bounds made in production technology have proven that quality exists in a digital environment.
“Variable data growth has also impacted demand on in-plant environments. Now, complex data and transactional data projects don’t require outsourcing. Overall, the print-on-demand model proves to be less expensive and less wasteful in so many environments.”
Todd Brown, RJ Young
Sometimes, it is easier and more efficient to import several production printing specialists into the fold to create a platform that will grow to scale in short order. That certainly was the case for Nashville, TN-based RJ Young. The dealership, which offers the full Canon and Ricoh lines, has made its greatest production printing inroads during the past eight years, coming out of the Great Recession, by stocking its personnel with former production/reprographics shop owners and manufacturer imports as an overlay to its sales territory reps.
RJ Young has thrived in placing the Canon varioPRINT 110, 135 and 140 range of monochrome printers, which have provided strong aftermarket margin through service and supplies. The Canon varioPRINT 6000 is quite popular in the larger production environments. Canon and Ricoh are about evenly split on the color side of RJ Young’s business. While it has some pay-for-print and commercial clients, RJ Young’s sweet spot is with not-for-profits, religion, education and business office.
Consistency of Lines
Familiarity with a manufacturer’s MFP line can often play a role in end users opting to maintain consistency in the production line. “It’s all about finding the right product for the customer,” noted Todd Brown, director of production sales for RJ Young. “Some customers like the continuity and feel between their (MFP) device fleet and their production devices. Most of the interfaces are the same, so that often dictates the way we go.”
Much of RJ Young’s growth is tied to customers bringing light production in-house for on-demand printing as opposed to outsourcing jobs that often end up with excess that can spoil due to obsolescence while taking up valuable real estate on shelves. Having the expert personnel to demonstrate ROI to the client, as well as offering in-house financing has given the dealership a distinct advantage in its markets.
Brown adds that while RJ Young offers an array of ancillary binding and finishing equipment, it takes great care in matching equipment to clients, considering the degree of difficulty for operators.
“We’ve placed some small folders and cutters in churches that are simple to use,” he said. “The high-end production printing facilities know how to operate the larger gear.”
Sean Sullins, Prosource
Cincinnati-based Prosource has logged 10 years in the production print equipment space, but in the last five years it has blossomed thanks in no small part to Konica Minolta’s proliferation in the segment. Most of its competition comes from manufacturers directly selling into Prosource’s core customer base of CRDs, in-plants, data center and commercial printers. Black-and-white units such as the 1100 and 1205 in the 120-125 ppm range, and the 1070 and 2070 color models—along with the C6085—have enabled the dealer to be highly competitive.
“Konica Minolta seems to be going more up-chain in production printing and we see that continuing to develop because of the competitive landscape in regards to Xerox and Canon,” said Sean Sullins, senior vice president of sales for Prosource. “We feel we can compete in those markets more aggressively now.”
Willingness to Invest
Prosource has added a second production specialist and continues to invest in its production print platform, which now accounts for about 15 percent of its overall business volume. In the past three years alone, the dealership has grown its position in the Louisville and Lexington markets, having captured several large accounts first through MPS/MFPs, then widening its client relations via production gear. Assembling an infrastructure that has specialists familiar with the full workflow of the production print process, and supporting it with network engineers, color specialists and analysts on the technical side has helped augment the growth. Prosource also has upwards of 20 relationships with various prepress and postpress providers to accentuate a client’s requirements.
In the end, the key for continued penetration among current clients is showing how they can reap cost savings and enjoy the fruits of on-demand printing by bringing outsourced jobs in-house. Sullins and his department work with both Konica Minolta and clients to test applications on native files to ensure that quality standards can be met, then offer the best possible hardware solution to address those needs. Part of Prosource’s homework is to understand a client’s current outsourcing proclivities—run lengths, frequency, types of jobs—to have that deeper conversation and accurately illustrate the ROI.
“It’s about understanding applications and internal outsourcing costs today, so that customers can understand how they can justify a large spend like production printing within their environment,” he said. “The growth we’ve had didn’t happen overnight; we’ve gone from several hundred thousand a year to millions. It takes time to have a good stream of revenue coming in.”
