Competition is fierce in the B2B large-format printing industry, in large part because companies can still make a decent living at it.
“We see a lot of printing and reprographic companies expanding into the space. That is happening quite rapidly, which is actually a concern because they typically work very low margins so I feel they can’t make money doing offset printing or blueprints because their business model has been run down the margins,” says Wesley Faulkner, owner of PC Signs & Graphics in Garner, N.C. “So now they are getting into large format because there is margin there.”
Preston Herrin, vice president of sales and marketing for 4over Inc. in Glendale, California, agrees that competition in the large-format printing space is stiff, but “we have great respect for our competition. There’s always an organization out there [that] is going to be challenging you for your business. We like to think we’ve created a value for our customers that is very difficult to beat. Our competition keeps us on our toes and helps us to remain sharp.”
Even with the uptick in competition, Faulkner says his company stays relevant by adding new and more current equipment, like UV printing technology and latex printers. Both offer fast turnaround times and the prints coming off the printers are ready to laminate or finish. They also are cleaner technologies than solvent-based printing, which creates a safer environment for his employees, he says.
PC Signs & Graphics has a range of printer sizes, from 4-foot to 16-foot.
“We’ve added cutting and digital routing so we can print stuff and cut it out,” Faulkner says. His company also added industrial printers so that the time between failures is much longer than for commercial printers.
“Most print media only goes up to 60 inches on adhesive vinyls. Anybody can do that. It comes down to banners and mesh and with these wider printers you can run multiple rolls at one time so turnaround times decreased; we can put out stuff 100 times faster than it used to be with an eco-solvent printer,” Faulkner says.
He can run his industrial-grade printers for three shifts a day with no problem.
Faulkner’s wholesale customers include small print shops and brokers who don’t own a printer because it isn’t worth it to them to own one or manage the people needed to run them. A better use of their time is to sell and install and outsource the production. Others receive orders for large print jobs of 100 banners or more and a job like that would tie up their printers for a week, so they outsource to a wholesaler.
PC Signs & Graphics also has finishing capabilities, like sewing and heat welding, that many small shops don’t do in-house. It also keeps expensive materials on hand, like wrapping films and reflective materials. Items that small sign shops don’t want to invest in for the one or two orders they get for these types of things.
“We get a lot of specialty orders so they are not stuck with inventory they never use again before they go bad,” he says.
They also outsource their oversized jobs, things that are too big for their capabilities.
ER2 Image Group in Bloomingdale, Ill., has seen its business model change over the years as many sign companies have started bringing larger digital printing technology in-house.
“Today, most of our wholesale is in very large output, very high volumes and specialty products, such as dye-sublimation,” says Gary Schellerer, COO and vice president of operations for ER2 Image Group.
ER2 was founded 25 years ago by Schellerer and his parents, who knew nothing about the sign industry or running a business before they jumped into it. The company was called Signs by Tomorrow and it started using digital equipment when the technology was in its infancy.
“When I saw what advantages digital had over standard cut vinyl, obviously it would be a big influence in our industry,” he says.
The equipment was expensive, so to justify the expense, the Schellerers decided to approach different sign companies with a wholesale model.
“We’re going to get five companies that have need for digital capabilities and can’t afford the equipment on their own. We offer our printing at a reduced rate so they can make money. With the help of those companies, strategic relationships, we were able to purchase a larger piece of equipment,” Schellerer says.
Back then, a new piece of equipment cost between $30,000 and $40,000. Now, a high-end new printer can cost $500,000 or more.
The model worked. ER2 has three facilities and employs 65 people. It can print 16 feet wide with billboard-style printers and also has multiple grand-format devices, including dye-sublimation printers that can produce output up to 10.5 feet wide.
ER2 also has finishing capabilities. It builds custom extrusions in its metal shop. It also has full departments for fabric sewing and vinyl finishing. ER2 has eight graphic designers on staff, so “we built ourselves into a different animal compared to where we started,” he says.
Back when the company first started wholesaling, it could get a premium for its product because it was brand new.
“Today our business has changed. …Wholesale is different than working with end users. It is important to keep ourselves in the background. Create a system that ensures that your client’s client is not going to know who they are working with. It is important to create trust with a client,” Schellerer says.
If a client of a client approached Schellerer, he says he would not work with them because it would scar his company’s reputation.
“It is important to us we have ethics that allow us to do wholesale work. We’re a small industry. If we get a name for stealing people’s clients we would quickly lose our reputation,” he adds.
ER2 is hired by photo labs, offset print and sheet fed companies, advertising agencies, design firms, sign companies and graphic suppliers.
Pricing in the wholesale business is very important because the “person you are working with has to work between the margins. Stay competitive. Part of that is having the right equipment to do the right jobs,” he says.
4over’s Herrin says that his company, which was founded nearly 15 years ago, has always worked in the wholesale side of the business.
“We are very loyal to our customers. Over the years, we have grown exponentially as we spread out across the country geographically,” he says.
4over has 12 locations across the U.S. to better serve customers in local markets. It serves the graphic design market, designers, agencies, photographers, print brokers, printers, sign and banner companies and quick printers.
The company’s large-format division is its fastest-growing division. It has its own research and development division and introduces new products all the time for its large-format printers, both rigid substrates and flexible ones. Products range from Coroplast, PVC and aluminum signage to mesh, wall and window graphics.
It recently added dye-sublimation capabilities at all of its locations to make flags, table throws, tear drop and other shaped banners.
“That’s brand new to us. It has actually been explosive growth, and we are excited to see where it is going to go in 2016,” Herrin says.
4over’s customers drive its business.
“They will tell us what the relevant products are in the marketplace. We knew [dye-sub] had legs from the feedback from our customers. We knew it would do well,” he says.
Flag banners and tear drops are a “big opportunity for us. The segment, overall, is growing for the industry. We are excited about it,” he adds.
JW Media in Las Vegas, Nev., sells wholesale digital printing products across the country, including Hawaii and Alaska.
The company sells 13-ounce vinyl banners, magnets, fabric and backlit films with perforation. It also sells its own material rolls and ink.
Its large feather flag is one of the most popular products it sells. It also offers double retractable and backdrop stands in bulk.
The company has 10-foot printers for fabric and banner applications.
“The fabric one is very important,” says Daniel Vargas, a field associate at JW Media. “Not many companies have a 10-foot fabric printer.”
JW Media is constantly adding new equipment, including large-format printers and laminators.
“It is crazy because we started as a local business and have grown to resellers and distributors. It is crazy how fast we started expanding and growing,” he says.
Most of the company’s business comes through word of mouth, but the company is in the process of optimizing and upgrading its website as well.
Vargas estimates that about 60 percent of the company’s business is wholesale and the rest retail. There are employees dedicated to both sides of the business.
Mixing wholesale and retail may not be the norm for most graphics shops, but as today’s profit margins tighten, finding innovative ways to keep your printers running full-time can be the key to a successful business.