Is Print Outsourcing Right for Me?

by Bobby Deraco

Last week I was speaking to a colleague of mine, the owner of a print management firm located on the outskirts of London, about the state of printing across the Pond. He shared with me a surprising statistic: 25% of all printing purchases in the UK are managed by third party firms. All told, over $15 billion worth of print is bought not through a printer, but through a company that doesn't own a single piece of printing equipment.

In comparison, only 2% of all the print bought in the US is purchased through a 3rd party. This translates into about $2 billion annually.

But that is changing. While domestic print spending is down 40% since September 2007, many 3rd party sourcing firms have seen positive growth — despite the woes that many printers are facing today.

The question is, why? What is driving the trend to buy print through 3rd parties instead of directly through a printer?

Although I could spend the good part of a day explaining all the reasons, I'll start with a primer based on three major points:

  • More with Less
  • Expertise
  • Money, money, money

More with Less

I talk with dozens of marketing people every week. Many are stressed. Their bosses expect them to accomplish more than at any other time in their careers — with fewer staff, less time, and tighter budgets. They are working long hours and juggling a million tasks at a maddening pace. And the last thing they need is to drop the ball on a print project.

3rd party outsourcing firms — print management companies, print brokers, production houses, print distributors — are keeping these marketers sane. The best firms not only manage the vendor relationships, but also offer project management and value-added services like fulfillment, mailing services, and electronic media. Outsourcing print to a 3rd party more than pays off by saving a marketing department time and preventing mistakes, while keeping overhead to a minimum.

One Director of Marketing I know put it best. "I love having a single source in my corner to bounce ideas off of," she said. "Besides, Accounting outsources their payroll duties, so why can't I outsource my printing?"

Expertise

I know of another Marketing Manager that used to have three graphic designers and a marketing coordinator to oversee print projects. The economic downturn and layoffs cut his staff in half, leaving him with two junior designers. They are great designers — technically proficient — but inexperienced in aspects of producing direct mail (which is a major communication channel for his company).

"I just don't have the depth on my team that I once had," he confided. "So I rely on partners to help fill in the gaps." For this marketing pro, delivering results means hiring experts that know the print industry inside and out.

Besides partnering with a 3rd party firm with specific expertise of the printing industry, another benefit is that these firms specialize in sourcing hard-to-find products and managing complex or short-turn projects. Any printer can produce a decent business card; it's another thing to find a cost-effective source to produce those die-cut, 4-color plastic card variable mailers that you want to use in an upcoming campaign. 3rd party firms often have hundreds of unique sources that give marketers freedom to produce any type of printed product, many times at substantial cost savings.

Money, Money, Money

Speaking of cost savings, let's talk about money. One of the biggest misconceptions about working with a 3rd party firm is that they simply act as middlemen, taking a price from a printer and tacking on a mark-up. While a few print brokers still operate this way, professional print management firms do not. Many operate sophisticated reverse auction systems and skillfully negotiate with hundreds of vendors to get their clients the best product at the best price. Additionally, many firms work directly with a printer's management team, bypassing their commissioned sales reps and passing along the savings to their clients. Typically it costs no more to work with a 3rd party than a printer, and in many cases it costs less.

One CFO sums it up best. "Working with [print management firm] has saved us about 15% on print projects across several departments. We've found out that some of the printing we were doing was unnecessary. We've reduced hidden fees — like AA charges — and had them do database work to cut the amount of postage we were wasting on bad addresses. My department managers report that they no longer receive 'surprises' on their invoices. These changes took some getting used to, but they have translated into real dollars and cents that we need to stay competitive in today's environment."

It Never Hurts to Look

In terms of product selection, quality control and consistent cost savings, outsourcing firms offer an incredible value for today's marketing executives. These firms are helping marketers get more done with fewer resources in a cost-effective and efficient way.

I mentioned earlier that only 2% of the nearly $110 billion annual US print spend is bought through 3rd party outsourcing firms. While most of that comes from large Fortune 1000 companies, smaller to mid-size companies are starting to realize the benefits of having their own print experts as well. If you're curious about how a 3rd party firm can help you, having an initial meeting will quickly determine if their solution is right for you. It costs nothing to have a conversation, and you just might be surprised at what you find out.

NEXT ISSUE: The Eight Questions you must ask of any print provider during the first meeting, and the One Question to avoid at all costs.