Top Ways to Fight Cut-Rate Pricing from Online Printing Giants

BIG PICTURE OFTEN asks the Brain Squad for feedback on the type of content that’s shared in the magazine. A few months ago, the editorial team received this message: “I think the industry should evaluate our value. The internet pricing structure has pushed margins very thin on so many items.”

So, we asked the Brain Squad: How do wide-format printers get back to better margins? Here’s what they have to say:

• It’s difficult to compete with online sign stores, but we try to offer value-added services such as design and installation that they can’t offer. Also, with the high cost of shipping, we can often close the deal because we’re local. I would continue to work with your customers, offering them better solutions and services. I don’t drop my pricing to match internet companies. At such small margins, I’d rather not have the client. — Ann Durso, Express Sign & Graphics
• Stand unified and do not undercut each other. Base competition on the service you provide. — Jason Roberts, Futura Color

Existing Areas of Automation

What best describes your current level of workflow automation?

• Lowering prices is the easiest sales strategy. Hold the line and keep pricing at a healthy margin level. Ensure quality, solid customer care, and find ways to add value, especially through customization. — Jim White, Go Graphix
• We will always try to be competitive, including building a web-to-print solution that will compete with any online seller. But when someone does not want to pay for quality and service, then they will get what they get. — Ryan Clark, Direct Edge
• Evaluate areas to improve efficiency in their operations by procuring materials and substrates directly from manufacturers, and by implementing new software and automation tools to streamline the process. Basically, pursue continuous improvement in all areas of manufacturing, from estimating through final production. — Brian Hite, Image Options
• We are constantly looking for creative ways to be more efficient. We have automated many front-end functions, in prepress specifically, using software and scripts. Not only can we process more work, but we have managed to do so using fewer labor hours and a lower headcount. Customers are not going to quit asking for “better, cheaper, faster,” so we have to look to areas we can control within our own operation to try and gain those margins back. — Elaine Scrima, GSP Companies

2019 Top Wide-Format Applications

• Become more than a printer and compete where the ecommerce companies cannot. It is a losing battle for most companies to gauge their pricing on the cheapest online company they can find. The reality is, to compete with these companies you typically must be very large with super aggressive equipment and find efficiencies that are very difficult for brick-and-mortar companies to implement. Plus, who wants to be a “sweatshop?” Instead, find some products and services that you are good at and become an industry expert. Be the go-to person for your client and offer service that an online company cannot. We offer robust graphic design, 3D design, CAD design, and even have an engineer on staff to create complex environments that our customers will never be able to achieve with online companies. — Gary Schellerer, ER2 Image Group

• Proving our value to the consumer and their needs is paramount. There are many caveats to the web-only-based internet pricing structure that mislead consumers and lead to situations where [online purchasing]may not provide the best value. If we can show the client they get what they pay for – not just for the actual item, but the overall service and value they receive – margins will be better. — Derek Atchley, Atchley Graphics
• I feel like if we do our best to control cost and waste (which is a big issue) we should be able to continue a growth curve. Clients are buying; we just need to work hard to get the jobs. — Diana Herrera, APImaging

• Reduced waste and increased accuracy (fewer mistakes) by way of automation, paired with open-loop recycling. — Jacob Meier, SuperGraphics

• Find added-value products that differentiate your brand and/or offer exclusive products, and set the margins you want. — Jon Sherman, Flavor Paper

• Customization. — Gina Kazmerski, Image360 Woodbury

• We won’t “get back to better margins.” I don’t believe the print industry has ever had huge margins. Print is a mature, competitive industry with excess capacity, and we’ve been operating on fairly tight margins for the past 20-plus years. There are certainly things printers can do to add value to their customers that is market specific. If the customer is willing to pay for these value-added services, your margins will be a bit stronger, but my belief is margins will be tight/compressed for years to come. Brian Adam, Olympus Group e In our business, we have separated sales channels to support the online buyer differently than an enterprise client. An enterprise client pays more but receives consulting from a sales professional and personal service from our support teams, such as client services and custom structural design. — Kristi Duvall, The BoxMaker

• High-quality output and service. — Pat Dacy, 3V Signs & Graphics
• Adding value, not through commodity items, but through service, timing, design and/or install. — Rick Mandel, Mandel Graphic Solutions
• Service, service, service. — Chris Raleigh, Visual FX

• If you’re losing to low-price online services, you are selling the wrong product! Your advantages over online suppliers are exactly what the best clients are looking for: in-person service, local knowledge, connections, and the reassurance of the in-person contact when trouble arises and when something special is required. If you and your organization are even moderately plugged into the community, that – when carefully employed – can be of incalculable value to the client. Provide a complete package. What can you provide that the online company can’t? Installation? How about a mention of their tradeshow, gallery opening, or big sale in your newsletter or social media accounts? Presumably, you have well-trained, competent, bright, and enthusiastic staff. Provide opportunities for clients to interact with your people to better understand what you do and how you can assist them. Becoming the team that solves customer challenges and makes them more successful is worth far more than a buck or two per square foot. — Jim Dittmer, JDA Creative Color

• Working with clients that value quality allows shops to be able to afford to do things the right way. Working with your vendors to get great pricing by purchasing in bulk and/or establishing great credit terms can lower your costs. — Jared Smith, bluemedia
• We have never competed with the internet. We have lost customers to the internet, but because of our focus on quality and service, we have seen those customers return within three to nine months. — David Kaiser, Digitype Design

• Stay with custom. If you are competing in commodities, then your only levers are price and speed. — Tim Bezner, Westmount Signs and Printing Co

• Pick a non-commoditized area of expertise and be known for it. People will always price-shop, but they will come back if you meet their deadlines and quality requirements. We cannot be all things to all people. You will die trying. — Linda Fong, Fastsigns Oakland, Fastsigns Hayward

• I have yet to allow pricing of any kind based on the internet or competitors. If I buy at Y, I want X. I’ve had situations when a potential customer told me I should be aware of my competition because they have lower pricing. LOL. Really? I don’t worry and none of my peers should. — Tommy Melendez, Master Graphics NYC
• Offer installation and design to make the process easier and more predictable by eliminating online guessing of quality and material choice. — Tami Napolitano, Awesome Graphics
• By adding value and building relationships with customers. Having a “can-do,” customer-focused strategy. — Pete Brunner, Full Sail Graphics & Marketing
• “Value” is a great word to use here. Ultimately, our value is in the service we provide, not in the product we output. We are a solutions provider for our customers, not just an output vehicle. Be their expert. That is where the margin is, not in the product. Wade Neff, Strategic Factory