Corporate Buying At Work

I had an insightful conversation with a member recently.  He and his spouse had been in business for 30 years and primarily served the small business community as well as select large accounts.  With nothing larger than 11×17 presses, they had carved out a nice business, as have many printers over the years.

The company has gone through dramatic re-shaping over the past five years.  Where at one time they employed over 15 employees, they’re down to the husband/wife and two part-timers.  No, they did not have their heads in the sand.  Over the years they adopted desktop prepress and adopted short-run color copiers and still utilize their offset presses.  This is not an isolated story but one that is being seen more and more frequently across the graphic arts landscape.

Yes, the printing “pie” has gotten smaller, but there’s something else at work which is truly affecting our “ma & pa” printers.  It is corporate buying patterns.  As corporate America has downsized and become leaner, they have started to outsource to integrated buying firms.  In our industry those firms come in different names, but are familiar — FedEx Office; Staples; OneSource; WorkFlow One, and Standard Register to name a few.  Their model is simple.  Purchase through their centralized systems and you will see significant savings.

This has played havoc with the commercial/quick printer who was already seeing his slice become smaller because of Internet based technology.  In this new world, the decision of using a local supplier in not an option.  No longer were competitive pricing, service, and ability to meet deadlines important.  The driving issue was corporate profitability.  Squeeze the “fat” out of the system had become the mantra.  In search of this year’s improved earnings per share, things changed.  Yet, one has to ask at what cost to manufacturing? Employment?  The Consumer?  From the macro economic perspective, were we that much better off?  And can anything be done?  Probably not in the short term — but somewhere down the road, some corporate mogul will realize that there are hidden upsides in using vendors who are committed to doing the right thing for a company, not the cheapest.

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