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Why growth may be the wrong path for printers

Article written by

Matthew Parker

Written on 11/01/2016 | Posted 1 year 7 months 6 days ago

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There are plenty of good news stories about print. It has undergone a renaissance in recent times and companies are increasingly looking at print as a valuable part of their marketing mix. But one thing is still certain: print volumes are declining.

We live in a world of smaller and smaller budgets. People may want to use print, but they buy less of it than they used to. There's no escaping the fact that there is less and less volume around, so why do so many printers invest in more capacity?

It seems that, as soon they have busy machines, a printer wants to be able to handle more work. They will be talking about what the next purchase will be and how it will have a greater throughput.

Yet the more capacity there is in our industry, the more people are fighting on price to fill it. As the volume that printing companies want or need to produce goes up, the more print becomes commoditised.


Is continual growth really necessary?

 

I spoke to two companies recently that are fighting against this trend. One told me that they would like another ten to 15 percent more work, to make sure their factory and plant is used as efficiently as possible. After that, they will stop trying to increase their turnover, as they don't see the need.

Another company has two B2 presses that are fairly long in the tooth. Rather than buy two new engines, they calculate they can get roughly the same throughput by investing in a single, more efficient machine. For them, that's enough to be getting on with.

Both companies saw an advantage in stopping the relentless pursuit of growth; in fact, the second company will reduce its cost base dramatically by losing a machine. What's more, both companies will need less sales people to maintain a static sales volume.

The two printers I spoke to said that they wanted to continue selling hard, but that the focus of the sale would change. Rather than chasing volume, they will instead look for the right profit margin. Their plan is to try and win more work at higher margins and reduce the number of customers that give them lower returns.

 

Don't get me wrong, investment is vital


To achieve the right profit margins, you need to be efficient. That means having modern, productive machinery. It also requires having an up-to-date workflow that reduces manual intervention as much as possible. But it also means investing for smaller capacity: it means investing for profit, not volume.



Matthew has more than 20 years' worth of print buying experience, with more than 1,400 sales pitches from different printing companies under his belt. Matthew now uses his experience as a buyer to train and mentor printing companies to sell more at higher margins.

For more ideas on how to increase sales with today's buyers, download Matthew's free e-book: Ten common print selling errors and what to do about them

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