Avoid Middle Child Syndrome

Remember that show, Malcolm in the Middle, where the lead character sort of ran interference between his older and younger siblings? Malcolm’s predicament was a lot like that of distributors who work with manufacturers to serve end-users. On the show, Malcolm’s angst could be instantly communicated—and dispelled—by simply glaring directly into the camera. In reality, the drama needs to play out before the happy ending.

Particularly with a worsening economy, stress and frustration can lead to dysfunction within the supply chain. What’s ironic is that an industry whose very soul is rooted in printed information often fails to communicate to resolve its issues. Two trade printers, however, are relying on honest, open communication to make the most of challenging times and strengthen relationships with distributors.

Ross Avedissian, president of ColorFX, a sheet-fed shop in Burbank, Calif., noticed an unsettling trend intensifying over the past year. Requests for job quotes were sharply increasing, while the number of actual orders being placed was significantly declining. “Where there used to be a 40 percent response, it is now like 20 percent,” he reported.

“Distributors will e-mail a request for a quote, and when they get the price, some will just take out our heading and e-mail the quote on to other printers to see if they can beat it,” he shared. “From there, it goes to the next and the next and finally, it comes to a printer without a job at the moment whose press is down. [That printer] is going to offer any price just to get the job. This is just a symptom of the real problem, which is the economy. People are trying to make as much as possible out of one job because they don’t know when the next job is coming in. There is no profit anymore. Some printers are doing jobs just based on paper costs.”

It used to be, Avedissian observed, distributors would get three quotes before deciding on a printer. “Now, some are getting upwards of 10 estimates before making a decision,” he continued. The situation isn’t helped, he added, by those printers who eschew the ethics of the independent print supply channel and sell direct to end-users.

In a marketplace obsessed with rock-bottom pricing and one- or two-day turnaround times, Avedissian acknowledged distributors can bear the brunt of supply chain pain. “[Distributors] are the bridge between the printer and the end-user,” he said. “We have to help [distributors] help us. And so, I’m asking them the same question: ‘OK, what is your problem today?’ And, they are sharing their problems with us and it helps me know where I am.”

Distributor feedback has prompted Avedissian to compose an open letter to distributors offering suggestions and insights which will be e-mailed to his customers this month. “The distributors are my salespeople. If a salesperson doesn’t know about the business [he or she is selling for] how can the salesperson be successful,” he continued. In the letter, I’m going to explain all our daily problems: why I have to have the proof approved the same day, why I need the paper ordered one week before instead of last minute and why I have to have certain other things which will help me keep costs down [on a job], and help their markup so we can all make some living out of it.”

A typical markup used to be 25 percent, recalled Avedissian. “Today, some [distributors] are going with 10 percent markups and they still can’t get the job. I want our customers to be informed. It has to be a partnership.”

Buffer Zones

Varaz Gharakhanian, marketing manager for Glendale, California-based 4over, agreed with Avedissian that it is tough being in the middle, haggling back and forth to close a sale. His company’s solution was to empower distributors so they can get quotes as fast as possible.

“We put all our products on our website. Everything is in real time; [distributors] have full power and control and know what they are selling and how the shipping works,” offered Gharakhanian. “They just log onto their account, select their product category, select the run size and any type of special shipping or service request, and basically in 30 seconds they can give a quote to the end-user. It has been working really well. They see the price they have to pay on the website and can work out a decent margin with the end-user to get the job.”

(He mentioned the company is a pre-paid business, so distributors enter their credit card information when uploading orders, which eliminates payment issues for the company.)

4over also offers coupons on a regular basis to help distributors be more competitive. “We recently sent out a coupon to [more than] 100,000 print resellers in the United States and encouraged them to bring orders to us and receive a 15 percent discount if they have never tried us before,” continued Gharakhanian.

“And, for some orders, like up to 5,000 business cards, we don’t charge for shipping anywhere in the United States, and we [provide] free delivery in southern California. The idea is to offer a lot of added value and a competitive edge so [distributors] can grow and make their money.”

The company opened three new production facilities this year—Miami, Dallas and Newark, N.J.—to facilitate two-day ground shipping anywhere in the United States, and drop shipping is optional, offering yet another advantage. “We made [distributors’] jobs easier and more efficient, which makes them look good with the end-users,” concluded Gharakhanian. “We have [more than] 35,000 loyal customers nationwide. We share their interests and continue to be 100 percent trade-only. They, in turn, protect our interests.” PPR