Printing For The Trade

Trade printers are flourishing at a time when the industry's “independent segment” is tossing aside former taboos and adjusting to a stark new rule: No rules stipulate who can sell to whom. But that wasn't always the case. Traditional buyers of trade print services were quick printers and brokers (most despise the term, preferring “distributors”), and the printers who sold to those firms had to be “dedicated”—no direct sales forces of their own—or they were dead. The supply chain was clear and linear.

Now, it's a diverse and inter-connected web. Companies that once dotted the periphery—service bureaus, software providers, mailing houses, database specialists, advertising agencies—are squarely part of trade printers' business strategies. Fierce competitors have become one another's customers.

Thousands of office retailers operate print centers. Distributors that once bought exclusively from their trade partners are buying in-house equipment and partnering with Web-to-print providers. For example, RBO PrintLogistix, a distributorship in Maryland Heights, MO, recently launched an in-house digital print-on-demand center that turns around orders in 24 to 48 hours.

One print service provider, Webb/Mason of Hunt Valley, MD, works with no fewer than 150 qualified trade printers representing nearly $1 billion in manufacturing capacity. And the mega brokerage just launched its own commercial printing facility, WM Commercial.

“When we established a distributor sales channel 18 years ago, a number of traditional manufacturers in the industry had a problem with our approach because we weren't trade-only,” says Timothy Dust, president and COO, The F.P. Horak Co., a trade printer in Bay City, MI, offering Web printing, commercial printing, digital print-on-demand and more. “Today, some of our customer base—especially ad agencies—won't buy from businesses that don't provide direct service. A few years ago, we developed a direct arm to go into larger metro markets and call on those agencies. Some distributors weren't happy with that decision but, looking back, it was a good business move.”

Internet sales have led to disintermediation, as no one can block anyone from selling to anyone. In fact, a substantial amount of print (some experts say as much as 30%) is bought by other printers from printers, including book printers.

InnerWorkings, Inc., the largest of the huge brokers, got so big so fast—sales of $161 million in 2006, up 109% over 2005—that the company went public two years ago. Based in Chicago, the firm is led by former RR Donnelley chairman John Walter, who brought over colleague Steve Zuccarini as CEO; the COO is Eric Belcher from press manufacturer MAN Roland. Two months ago, InnerWorkings acquired $59-million Corporate Edge, New York City, a national distributor of promotional products, and also has purchased several smaller brokers.

“With the blurring of distribution, it has become even more evident that if one member of the channel falters, so does the entire channel,” says Peter Colaianni, exec. VP of the Print Services Distribution Assn. (PSDA, formerly DMIA), Alexandria, VA. “For our value chain to be effective, the entire trade-printing world must work together to identify and meet the needs of end users.”

During the 1970s and '80s, traditional business forms experienced almost two decades of uninterrupted growth. Between 1970 and 1988, the value of forms shipments grew at a compound annual growth rate of 10.5%, according to PSDA. Demand for continuous stock forms began to decline about a dozen years ago.

Today, progressive trade printers are broadening their product lines or refocusing to better connect with a wider pool of potential customers. One such firm is Mankato, MN-based Taylor Corp. (#1 on GAM's trade printer list, p.32). Earlier this month, the $1.7-billion firm merged three of its independent entities—Carlson Craft Business Solutions, Regency and Label Works—into a new brand called Navitor.

Tom Ninneman, Taylor's operations VP, says the combined company has five large U.S. print production facilities and 30,000-plus active customers, making it one of the country's largest custom print providers. Navitor has implemented several lean-manufacturing initiatives and provides 24-hour turnaround on many products. Ninneman adds that Navitor's customer service representatives have access to a broader range of products than they did when the entities were independent. “We will be better able to help our customers navigate through their often-complicated printing needs more efficiently and effectively,” he says.

Another successful, evolving trade printer is Ennis, Midlothian, TX. Keith Walters, its chairman and CEO, cites cost control, new products and product diversification as reasons for the firm's consistent growth. He also pursues a two-pronged acquisition strategy: Buy firms that sell similar products and those that make different products (like imprinted clothing) that can be sold through its current distribution network