A strong business is a sustainable one and one way dealers can create a sustainable operation in the wake of declining clicks and tighter margins is to expand into production and industrial print.
In the coming months, you will see ample evidence of our conviction regarding the increasing importance of production and industrial print. You may have seen our ITMA coverage addressing printing on textiles on thecannatareport.com and will see more in our September print issue. This will be followed by our coverage of PRINT 19 and PRINTING United, which are both taking place in October.
This is not an accident or The Cannata Report reacting to invitations from various organizations. We have sought these events out and determined that they are more than worthy of our attention. By that, we mean they are important because these exhibitions and conferences provide a significant amount of content that demonstrates the present and future directions of the leading manufacturers.
What is the motivation for this desire to promote production and industrial print? One only must be aware of what is currently happening in the imaging industry that addresses the office. In recent months we have learned of happenings that clearly demonstrate the continuing deterioration of MFP pricing and the decreasing use of toner for those same devices.
What leads to form those opinions?
- Secondary suppliers of off-brand toner coming under a great deal of pressure with potential bankruptcy staring at least one of them in the face. Time will tell if we are correct.
- An award that has the potential of thousands of MFPs and printers with a CPP at the lowest price we have ever been made aware of – .0035. (This comes from a single source and has not been confirmed but we believe it to highly accurate). At some point, we will be able to confirm it.
- As an organization, we service vendors such as manufacturers and suppliers of aftermarket products and services. There was a time we were paid well within 30 days and today it is 60+ days. This is not true of all vendors as we are speaking of our average days outstanding.
- We closely monitor the budgets the industry has available for marketing and advertising support. It was made abundantly clear to us that revenues were cut by a significant amount in 2019. Here again not all but, enough so that it represented the majority.
Imaging is still a very good business, but it must be supported by managed services and an alternate product strategy that includes wide and large format as well as high-volume printing. There are dealers who are very close to balancing their business at 50% imaging and 50% services and high-volume printing. That should become the model for all dealers.
If we did not believe this, we would join all those that are selling out and find someplace warm to spend our remaining years. We are betting that is not going to happen.
We are a 40-year-old company that is managing our business to remain sustainable and that means profitable. If you think we make sense, then take the ride with us. This is not a quick fix and there will be many challenges for both of us to overcome.
We have been doing this for a long time and we are thoroughly convinced that dealers will make that leap and the survivors will spawn an industry of far fewer dealers with the vast majority of them highly successful.