The UK’s trade printers are producing at least £100 million of work on behalf of other printers and resellers. This is without taking into account the work that these companies – Solopress, Route 1, Where The Trade Buys and more – are producing for small businesses directly through web portals, work that arguably might traditionally have been placed with commercial printers.
It is easy then to think of these companies as the bad guys, revenue leeches on the industry that make life difficult for upstanding commercial printers through consistently low pricing. When printers complain in the BPIF’s quarterly Printing Outlook report that their biggest challenge is other printers pricing below cost, the chances are that it is the trade printer in the firing line.
But instead of complaining and hoping that the situation will change, it may make more sense to work with these suppliers rather than fight what must be a losing battle. Simon Cooper is managing director of Solopress and puts it succinctly: “I was speaking recently with the director of a commercial printer with sales in double-digit millions. We discussed a typical 5,000 A5 flyer job. I said we might price this at £70-90 depending on turnaround. The cheapest he had quoted was £168.
“For that company, this was a single order, not so for us. We have dozens of jobs that have this configuration that can be consolidated and we are very efficient. The long perfecting B1 Heidelberg installed last year generates 70 waste sheets at start up.
“And when comparing paper, plates and shipping prices there are some pretty extreme differences: we are paying 25% less on shipping, 56% less on plates and so on.” A small commercial printer cannot compete on price. The logical response is to place this type of work with trade printers and pocket the margin.
Many are doing so, hence the growth rates that the sector is showing. It is set to grow still faster as the tectonic plates under the commercial printing industry continue to shift. Covid naturally is considered the spark, or at least the accelerant to the flame.
Gary Peeling, chief executive of Where The Trade Buys, says that Covid led to a lot of companies reviewing their options. “They took money on CBils and now have to start repaying it at the same time as an energy crisis, a cost of living crisis and increase in wage bills. And if they regain the turnover they had before Covid, they are no longer generating the cash needed to make the business work. For some it can mean mergers, others have been asking ‘Can I carry on?’.”
The trade printers were not immune. Solopress suffered a 90% drop in revenues, says Cooper. Both Solopress and WTTB were able to produce the signage and stickers needed for social distancing and produced safety screens to help replace lost revenues. Neither was as swift nor as committed as Bluetree which filled an empty factory with equipment to make medical masks and built a multi-million-pound business almost overnight.
“We lost some people during Covid,” says Cooper. “At that point we didn’t realise we would later have problems recruiting afterwards. In reality we can’t recruit the staff we want to.” Its response has been to become more productive. “We had 330 people for a turnover of around £30 million before Covid; now we are running at £36 million revenue with 230 people,” he says. This is the same across the industry. “Since 2019 declines in industry revenues have been marginal, but the decline in people employed has been far greater.”
The larger trade printers are in position to make the investments that create a divide to smaller commercial printers increasing pressure on these businesses. As one becomes more efficient, the challenge of finding staff and investing based on weakened balance sheets opens the divide to the independent sector.
“WTTB is there to allow our customers to borrow production rather than having to own it themselves,” says Peeling.
“As a strategy that continues to grow. We are a full service solution, not just a producer of commodity products. Our customers can call on the capacity across the group. We are even in discussions with companies to take on their production sites as they move out of production themselves. This will help our utilisation and gives us more office space that companies that work with us can base themselves in.
“Bringing things together and pooling resources, makes sense. We are open to do more. Anything that keeps work in our factory and people in business is good and prevents the bad debts that are underwritten by the rest of the industry.”
WTTB will not be attending the Print Show, but others including Tradeprint will. The Scottish company took part in the show last year where it had 100 customers sign up says Anthony Rowell. “That was our first show for six-and-a-half years, so was a bit of a risk.”
This time around the printer can talk about investments in a long perfecting Speedmaster XL106 and Canon iX inkjet press as well as its acquisition of Tayprint. “This was a tour de force business for Scotland as a provider of large format print products. It is now consolidated within Tradeprint and we can offer a wider portfolio of work from business cards up,” says Rowell.
“We have been successful at retaining Tayprint’s customers and have onboarded them to Tradeprint’s systems and have started to include their products into the online offering.”
There was also a big upgrade to the browser interface and software that underpins it over the last year. This enriches the experience for resellers and printers using the company and includes a more sophisticated way to create estimates for bespoke products. “It’s a mix of the best of online with the best of bespoke,” he says. “We can offer a full bespoke service like a traditional printer, but we are very different to a commercial printer.” Job flows are optimised between digital and offset print feeding to three booklet makers, “where one job just follows another” .
Both Solopress and WTTB make a point of having offline customer account management to step in where online technology runs out. While this works for businesses where there is a diversity of work for a larger company, it works too for companies that have very little experience of dealing with printers.
WTTB has deliberately targeted crafters and traders on platforms like Etsy. These are artisan producers, says Peeling. “Paper works for them and just how is developing.” That covers promotional print that may be handed out at a craft fair to influencers who can tap into an army of followers to sell a book of recipes highlighted online, which can lead to orders for a cook book or branded items sold through the Instagram or TikTok presence with WTTB producing print. “This is just another type of reseller,” he says.
Solopress has also been adding to its portfolio of promotional items, the idea being to provide resellers with the range and tools that will enable them to meet every print need that their customers have.
“We have expanded the merchandise range,” says Cooper, “in order to enable resellers to say Yes to their customers more often. Until now it’s been about jobs that we can print on our HP and Heidelberg presses.
“We have more products that we can offer each customers and so retain the relationship that has been established.”
Making full use of trade printers may not always make commercial sense. A company where the vast majority of its products are commoditised print would do well to close down in house production and make more extensive use of trade printers.
Where the printer has just 20-30% of work that fits this category with the rest from complex bespoke work with a requirement for handwork, it will make sense to outsource only that portion of work and to continue to handle production for the majority internally. This might apply to campaign kits for example where a different combination of printed sheets, tokens and other inserts is needed and a degree of handwork is necessary.
The value for such a job lies not in the print element, but in pulling together the elements and as a service to the end customer. With their focus on efficiency and automation, trade printers have little interest in this type of work where manual dexterity trumps robots and automation.
Says Cooper: “Increasingly people do not see us as competition but have realised that they should be working with us.”
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