Crouser & Associates Performance Group program helps printers prosper through
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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.
Return to Crouser Index at http://www.printusa.com/articles/crouser.htm
Saturday, April 20, 1996 11:24:13 AM
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