Crouser & Associates Performance Group program helps printers prosper through
on-site assistance and twice yearly group meetings. For more information by Email or call (304) 342-5100. Crouser Report OnLine is the Copyright Thomas P. Crouser. Material may not be reproduced in whole or in part without written consent. Current reports are on the WWW at http://www.printusa.com.

Letters: Unfair Competition and Other Stuff

Crouser Report OnLine April 17, 1996

Transmitted from Winston-Salem, North Carolina YIPES! We ve already SOLD OUT our Saturday morning session on pricing and other topics in San Francisco HOWEVER, please call Clark at (304) 342-5100 if you want to attend. He ll put you on the waiting list as we work to get a larger room, etc. We will try to accomodate everyone. The session is FREE on April 27th, but we you must PRE-REGISTER. Also, we already have folks signed up for our other sessions: DETROIT, May 11th; ATLANTA, May 18th; CHICAGO, June 1st; MIAMI, June 22nd; and COLORADO SPRINGS, August 24th. So, please email, fax (304) 342-5187 or call (304) 342-5100 if you want to attend any of the upcoming sessions. It ll be a great chance for us to meet and compare notes. See end of this message for details. Well, let s get started with our letters this week. First, a very comprehensive reply to last week s letter from GM Fowler s on unfair competition has been sent by Martin Turnbull of PrintUSA.com.

Subj: Alco & Xerox V. United States Quick Printers
From: martin@usa.net
To: TomCrouser@aol.com


Dear Tom:

RE: ALCO Standard and XEROX by GM Fowler.

I believe ALCO Standard is the largest paper, paper products, and Quick Printing company in the world. It is only a matter of time before they buy out one of the top five Quick Printing chains or the XEROX facilities management division of XEROX in the United States. I am on WEB approximately 100 hours a month advertising for clients and doing market research. The companies owned by ALCO Standard, mentioned in your newsletter, are just the tip of the Iceberg. I am finding that they are purchasing new companies at a very fast rate. If it has to do with a paper product or paper finishing, ALCO STANDARD IS BUYING IT with your help.

To me this indicates that a plan is in motion to dominate every facet of a certain industry, to which I believe that it would be in your readers best interest to uncover/discover/rediscover. They prey on buying out successful groups and individual firms across the nation by making them a very strong offer. The buyout is generally clean, no family contracts to deal with, no long term notes, etc.

As your readers know, ALCO owns NightRider, a chain of legal and print on demand services. When ALCO moved into the Denver region they purchased two paper distributors. First one, then another. These distributors covered several states giving ALCO a inside look at their competition and how they paid their paper bills. Next they started acquiring Quick Printers, first in the legal area, then in commercial QP. Their tactic in invading the Denver legal market was to employ a number of sales people and show up every morning at prospective clients offices with donuts and bagels trying to buy more of the business. To a large degree this first strategy worked and they bought their way into a larger share of the legal market. Some of the less successful initial sales crew were discharged, or their guarantee ran out.

Next their sales representatives began to tell people they purchased their paper right . I was told this by one of their sales people. Their company belonged to the largest paper distributor in the world and prices began to fall in an effort to capture a larger share of the market.

Now it costs ALCO the same $14,000 - $17,000 per month for their Docutech s your readers have to pay for theirs. They pay the same hourly rates for operators, the same square footage rates for rent, employee insurance, health insurance, etc. So where are they cutting their costs? They are not cutting costs. How are they selling for less? Discounted supplies? I don t think so. Their corporate would not allow that. They are in business to make money, not fight legal battles for unfair trade competition.

When ALCO purchases a company they know exactly what the gross margin/profit is. This is the money they have to use in gaining market dominance in targeted markets. IF YOU PURCHASE A WELL RUN $2MM TO $5MM QUICK PRINTING COMPANY, YOU HAVE A LOT OF GROSS MARGIN TO USE TO DRIVE THE COMPETITION OFF OR OUT OF BUSINESS. I believe that for six months to a year they apply all of their gross margin in gaining new business. Their managers are not to lose money as they increase the client base. This fierce competition has ripple effect across the local market as Quick Printers struggle to survive. They take on projects formally left to the medium and larger companies. The end result is inevitable, some companies go out of business. Last month five Denver printers filed bankruptcy. Not a pleasant thought when personal assets are collateral for loan guarantees.

Was this all ALCO S OR XEROX S fault? Certainly not, but their fierce presence definitely contributed to the problem.

Then come the paper cost increases and supply cost increases. Naturally ALCO raises their prices. The big increase comes as they re-define their services and rates. Some of the things you were getting free, now cost a few mills. Before you know it the old client is paying more than he was before ALCO came to town.

All of the above has happened or is happening in Denver and across the nation in large metro areas.

Complaining or bitching about Xerox and ALCO is not the key to keeping them out of a market or competing with them. Nor is it the key to making your business bullet proof. What is the solution? How do you compete for the business when a well financed giant steps into the market with $150,000 to $500,000 to spend getting the business? How do you retain old business? How do you get new business?

What have we done as a industry to define our services and develop national service agreements with the top 1000 firms in the US?

The first step to answering these questions and others is to re-define the problem. I believe there exists among your readers the business moxie and acumen to tackle the problem. Your comments and thoughts are invited. Send them to solutions@printusa.com and we will organize and publish for the benefit of the Quick Print Industry on a bi-monthly basis.

NOTE: Printers are basically very independent, highly competitive business people. There has existed and still exists an attitude of I can do it better than you can. In this age of modern communications, intelligent publishing software, and hyper speed electronics there are no more trade secrets. Our long term survival depends on our uniting to address issues like XEROX and ALCO. For too long they have preyed on our fierce independence and lack of unity.

Looking forward to your replies. Martin L. Turnbull, PrintUSA.com

You may visit PrintUSA.com on the World Wide Web at: http://printusa.com/index.html Now, a response to Hal in Southgate about direct-to-plate and the questions he has about camera-ready art.

From: JoeJKool
To: TomCrouser


Tom: The shop where I work is a beta site for a new Itek product, the DPM-2000, which combines a direct-to-plate rip and a scanner which accepts camera-ready mechanicals. While we have only had the DPM in for a couple of weeks and have had a few bugs to work through, it so far seems to be the only piece of equipment on the market right now that handles that transition that many of us in the industry are facing between the mechanical world and the digital world. The RIPS are fast and beautiful: 133-lpi screens print like a dream and RIP in 3 minutes or less. The scanner is at least as good as the old-fashioned Itek platemaker/cameras and should get better with the promised software upgrades. I believe this product is supposed to go live on the market in the next couple of months. It s not cheap (around $50,000 I believe), but if it continues to perform well, it should bridge that gap to digital platemaking very well for a lot of quick printers out there.

Joe Webb, Graphics/Prepress Mgr., Sir Speedy, Marietta, Ohio

Thanks for the advanced peek, Joe. Pamela and I were through Marietta just last week -was those your lights we saw on late at night? Anyway, Steve Blatman from Ink Spot Printing has a question regarding applying those pesky labels.

Subj: question(s) about mailing service
From: sblatman@locke.ccil.org (steven blatman)
To: TomCrouser@aol.com


Whenever we have to mail something we ve printed for a customer, we use the rates in cqe (Crouser s Quick Estimator software). Lately, we ve noticed (yup, it took us a while) that continuous labels are much easier, at least with our equipment, than 33-up laser labels. More of our customers, though, are supplying the latter. We think it d almost be easier to ask for the labels on disk, and print our own continuous labels, than to apply their 33-up labels.

I m curious about what your other respondents have to say about: charging different rates for different types of labels (continuous v. 33-up) any semi-automatic or automatic equipment that applies 33-up labels (everything that we ve seen needs to be threaded--by the time we thread the system, the label sheet is finished)

Thanks in advance, Steve Blatman, Ink Spot Printing

Okay, Steve. Let s see what kind of response we get. Whatcha say? Let us know about your labeling equipment and we ll feature it in a forthcoming message. While we wait on those cards and letters, let s hear from a relatively new subscriber to this service, Barry Reischling of aBCD Printing in Seattle, Washington.

Subj: Excellent Service
From: barry@abcdprint.com (Barry Reischling)
To: TomCrouser@aol.com


Hi, Tom. I m a recent subscriber. I m very impressed with the idea of your online newsletter. I believe the benefits derived from the dynamics of e-mailing exchanges of ideas with people like yourself who have earned their credentials from many years of printing experience will pay future dividends. Because of your industry expertise, I ve always enjoyed your articles. They are well written and always to the point. I m also a scarred up pioneer with arrow holes. I was the one behind the SuperMail idea promoting printers to invest in Group III fax for local delivery of minute mail. This was some 16 years ago.

So allow me to introduce myself. I m the owner of Seattle s aBCD Printing Company. We feature twin Docutech 135 s with a most sophisticated front end system. We ve been printing regional software manuals from printfiles FTP d to us over the Net, for over two years. We ve validated the benefits of the concept. Sales last year were over $2.25 million from only 12 employees. Our return on sales was astronomical. The implications of our future controlled growth from file transfer strategies is most exciting. And we ve barely scratched the surface. Hence our PrintersLink quest. Check it out: httpp://web.abcdprint.com/p-link/p-link1.htm

Check out our aBCD site: http://web.abcdprint.com/ Beware. Our jingles are super corny, but people say they re entertaining, so we re widely read. But I digress.

FYI: For file transfers, we feature our own custom *FTP IZ EZ* program tailored to the platforms of our targeted clients, together with our edited version of another printfile transfer program called First Class Client. Also, we were just selected by Xerox out of Rochester to become one of 3 commercial printers in the nation to act as a beta test site for their new InterDoc Software. e.g. A print buyer accesses an InterDoc printer s home page, clicks on their InterDoc hyperlink, follows the prods, and sends their PostScripted printfile which is transported quickly over the Net s TCP/IP, to that printer, for production printing. No modems or FTP tweaking required. Presumed benefits: Convenience, speed, simplicity, reliability.

The only problem is, it doesn t work. Too many bugs. And their asking price of $30M + $20M hardware is simply outrageous. (Typical Xerox- :-) But with the help of Xerox s programmers, we re dedicated to getting the bugs out of this software, and to see if we can make it work. Xerox, of course, is still burning their candle at both ends. They are also working with Page Path to customize PP s *Launch* printfile transfer software, and of course, with Sir Speedy and AT&T on a printer network using slower modems.

The point of all of above is that we think our small company s perspective of the future of our printing industry is correct. Printing from file transfers will become more and more popular. It is characteristic of both speed and peak efficiency. More importantly, the benefits inure equally to the printing buyer by offering the buyer both convenience, and control. So our printing price becomes less important. All of the above equate to much higher profits for the printer.

We hope the software industry can come up with printfile transfer software (as Xerox s InterDoc is attempting to do) which features platform compatibility standards. Every platform including DOS, Mac, Windows, Unix, Sun, etc. all have different printfile transfer problems to solve. Most people don t know how to prepare printfiles for printing. Most have no idea (even sophisticated software companies) of how to PostScript a file. Speed of file transfer, dependent on different size bandwidths, is another problem. Logistical headaches caused from the need of proof OKs is still another hurdle to overcome. (How can we improve upon FedX s next day? How does one undo a PostScript file for last second pagination changes before printing?) All these problems require unique solutions. So we ve elected to solve these problems ourselves, one account at a time. Benefit? When we re successful (the majority of the time :-) we end up selling the account, not the job. We earn credibility by performance, and most significant of all, we leave our competition in the dust.

We think digital color is still in it s experimental stage. Pixels require an enormous amount of memory. So for the time being, we re content to wait, occasionally experiment by farming jobs to a local Indigo printer, and watch.

Many thanks, Tom. Keep up the good work. You re a well respected guru in this business. When you have time, I d appreciate your comments relating to the above overview.

Barry R.
aBCD Printing Co.
222 Wall Street, Suite 100, Seattle, WA 98121
Ph toll free: 1/800/443-1875 Fax 1/206/443-4322


Hey, Barry. Think you said most of it yourself quite eloquently. What do you all think about the picture Barry paints? Give us some feedback and we ll feature it in a forthcoming message. In the meantime, this printers says he needs help badly. Subj: Need Help Badly!
To: TomCrouser


I opened a shop in June of 1992. When shopping for a location, we were sold on one in the second Phase of a new shopping center. In this area was to be two large anchor stores. With a layout like this... how can you miss... Plenty of traffic right?, Wrong. 43 months later there still are no anchors and the layout of center funnels traffic to the other side.

To make a long story short. I ve lost a bundle.... Usually bringing in only $13 to $17 K a month, I ve had a hard time meeting expenses, not mention the rent... At the present the landlord is suing me for $15,000 in back rent, most of which is bogus money due to his creative accounting... Well, we have found another location and have moved our shop two weeks ago.

This is scheduled to be heard in a court before a jury. I am looking to counter him for $500K + for Fraud, misrepresentation, loss of income, suffering, damages to business reputation, personal reputation and what ever else we can think of..... Basis of most of this, that I feel we could have grossed an easy $10k more a month if this area was as active as originally described. Maybe even more.

What I need is a direction to a source of basic Quick Printers monthly gross or Yearly gross figures based on national or local averages.... Hopefully, This may be useful (or any other information) in stating our case. Appreciate any advice

I received this note a few weeks ago and have connected our writer up with the studies provided by the National Association of Quick Printers. George Rounds was kind enough to send him information, etc. so he does have some ammunition now. Nevertheless, I wanted to share the letter and see what you thought about our friend s circumstances. And, finally, a note about getting together. . . . Subj: Chicago, NAQP
From: LaserTed
To: TomCrouser


Tom, will you be at the NAQP show in Chicago this summer? Maybe your subscribers could get together at sometime and meet each other and you, as well.

Thanks for the suggestion, Ted. You bet your bippy we will be there. Pamela, Edward and I will have a booth in the trade show showing off our latest software and other things good for printers. So we do invite you all to come by. As far as getting together, there may be a way to do that if there is an interest from the other folks out there. So, you all send me a message if you are going to the NAQP convention and show in Chicago and would like to get together to chat. Also, you ll note Pamela and I will be conducting some Saturday morning gatherings around the country this summer. Information on these follow. So, let s hear it from you.

Until we meet again, Happy Trails... Tom Crouser BACK ISSUES May Be Found at the National Association of Quick Printer s America On Line Site (keyword: NAQP, publications, Crouser Report) or on the internet at the PrintUSA web site (http://printusa.com/articles/crouser.htm) or on PrinterNet. Hey, do we get around or what?

Crouser & Associates - Helping Printers Prosper Since 1985

Crouser & Associates Performance Group program includes two on-site evaluations by Tom Crouser each year along with two group meetings. Management training is held during the group meetings along with participation in a meeting with non-competing printers. Join others who have decided to run their business instead of the business running them. Reply to by Email to Tom Crouser for more detailed information or call Clark Workman at (304) 342-5100. Or fax (304) 342-5187 or contact crouser@ibm.net.

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Saturday, April 20, 1996 11:24:13 AM Return to PrintUSA home page WWW at http://www.printusa.com.