Archive for August, 2010

More Paper Merchant Consolidations

On August 23rd Frank Parsons signed a letter of intent to sell their Fine Paper Divisions located in Maryland, Pennsylvania, and Virginia to Lindenmeyr Munroe. They are working to close on this transaction no later than September, 30th, 2010. According to their web site:
“Our name, Frank Parsons, will not change and our ability to serve the paper needs of our commercial customers will remain the same. Instead it will allow Frank Parsons to focus all of our energy on serving Corporate America.

Just like we have for the last 28 years, we’ll continue to provide state of the art business solutions and office products including:

* The full range of office product solutions
o This means paper plus all your other office products needs

* Technology products such as:
o Data center solutions
o Storage area networks

* Business services including:
o Managed print services
o Post-warranty maintenance
o Printer maintenance
o Media buy back
o Data eradication services”

In my opinion, the Personal Selling model (traditional print sales) does not work for digital. In spite of wanting to be “one stop shopping”, can you or any company afford to have you chasing and handling the details of a digital job that pays you $15-30 in commission? One Trip to a client will burn that in gas money…not to mention phone calls, proof reviews, RFQ, a lunch, etc.

The digital model, in my opinion, only works when it is a direct Internet sale with no human intervention. As a Salesperson, you could
direct them to the web, and then collect the equivalent of a referral fee without intervening; but you would have to be excluded from the rest of the production process and concentrate on non-digital. And, as you can read below, Salespeople are not very pleased when their company buys digital and expects them to sell it…for pennies in their pockets. This is an article excerpt I recently came across, and I couldn’t agree more…

Why Sales People HATE Selling Digital Printing
August 4, 2010       By Bill Farquharson

Sometimes, I don’t get what people don’t get about digital printing and VDP. Like when it first came out and Charlie Pesko et.al. ran around the continent yelling their “Emperor’s New Clothes” message, challenging anyone who didn’t see that vision. Now that those pie charts and graphs of yesterday have been downsized to reflect reality, we are faced with another “Don’t get it” moment: I don’t get why no one else but me sees why their sales reps won’t sell digital printing and VDP.

Imagine being in a sales meeting and the owner walks in. He’s jacked up and wears a smile from ear to ear. “Ladies and gentlemen,” he begins, “This is a big day in the history of our company. Today, we install the new Xerodigomapress 3000, a device that will put us in the race to capture digital and variable data print. Here to describe what your sales future looks like is our new digital sales savant, Bill Nevergonnahappen. Bill?”

“Thanks, Dick. Sales reps, this new device is going to push you from your comfort zone. You will no longer be calling on buyers, but instead, a whole new breed of potential clients. These people are in Marketing and Product Management. They’re owners and C levels. So, immediately, you are going to feel discomfort. Eventually, you will come across the IT Department. They know a lot more than you do, so prepare to feel stupid. Also, selling digital and VDP takes time. In fact, know that if the selling cycle for traditional print is 3-6 months, the selling cycle for digital and VDP is twice that. Plus, you can expect the average order size to be in the hundreds of dollars, meaning that according to Dick’s current sales compensation plan, you will see commissions in the tens of dollars (pause for dramatic affect).
“Thus, you can expect a solutions-driven sale made to someone who is smarter than you. It will take longer. You will sell less dollars for more work and make far less than you are used to. Remember, this is a team effort. My door is always open. Best of luck,” concludes Bill.

When the Economy Recovers…

Not a day goes by without hearing the familiar phrase “when the economy recovers….”. Quite honestly, I think people that use that phrase are badly misinformed. There is no “when the economy recovers”, there is only “when the economic restructuring is more complete”. We are not in a recession alone, but in the midst of a restructuring of the business world we live in. Many market sectors will never “go back to the way business was in pre-recession periods”.  Real estate, banking, automotive and  media markets are only a few of the industries that will never be the same.

Even before the recession hit, these markets were under pressure to restructure (cognizant or not) and re-invent their business models. It was only a matter of time before high/uncompetitive costs caught up with GM. Likewise, cable and legacy TV networks have been under attack since the first video was streamed online; real estate prices were so out of touch with what the average person could actually afford for at least the last 10 years, the resultant unscrupulous lending practices (under pressure from the Federal Government) were always a recipe for disaster.

So – don’t “wait for the recovery” – learn what needs to change in your business or daily practices in order to survive in a new world. Those that wait for recovery will be waiting a very,very long time…

More Paper Mill Price Increases

Today, yet another mill, Suzano Mills announced a price INCREASE effective August 15, 2010 of $2/cwt. The letter merely states there is an increase, and gives absolutely no explanation. Keep in mind that many economists would agree that we are in a deflationary mode (prices should be going DOWN, not up. Allow me to quote one of them:
“Four major considerations suggest that the past several quarters may be nothing more than an interlude in a more sustained economic downturn, with further negative quarters still ahead. Such an outcome will suppress inflation further and quite possibly lead to deflation. ” (http://www.marketoracle.co.uk/Article21046.html – 7/10/2010)
This increase is on the heels of many other mills increasing prices as well. I wish the Department of Commerce and Justice would worry more about paper mills engaging in collusion than worrying about taxing foreign imports and protecting their antiquated pricing models.