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Member Spotlight: Alexander's Print Advantage

Posted Wednesday, December 13, 2017 by Jules VanSant.

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Source: Printing Industries of America’s The Mag

By Sarah Sudar, Copywriter, Printing Industries of America

Jeff Alexander, president of Alexander’s Print Advantage, always knew he wanted to have his own business. In the late 1970s, this entrepreneur saw a need for a retail copy center in Provo, Utah. So, with no background in printing, but experience in marketing and public relations, Alexander jumped into the copy business when quick printing was in its infancy.

“I didn’t do any research,” says Alexander. “I just jumped in and wanted to last long enough to make some money.”

The business expanded into four copy centers, and in 1993 he acquired his first Xerox DocuTech and transitioned into commercial print. The company eventually sold the copy centers to employees and transitioned to a single-production-center model, becoming a full-service print and marketing communications firm in the late 1990s.The move to all digital came in the 2000s when Alexander decided to not sell print, but rather sell “product solutions” in which print was the deliverable. This allowed the company to grow outside of Utah into national and international markets and has provided tremendous growth in the last five years.

Alexander saw a need to leverage the Internet and created Divvy, Alexander’s exclusive web-to-print software solution. Divvy helps organizations like franchises or network marketing companies provide outlets or distributors all their operational needs efficiently and in an automated way. Though web-to-print is a household word in the industry, Alexander’s Print Advantage has leveraged it with their outstanding customer service to serve more than 60 corporations with their needs.

In addition, Alexander’s has developed automated nationwide appointment reminders for medical professionals and has become the exclusive printer for a major national wedding and event invitation company for whom they print and distribute straight to customers. Alexander says Alexander’s digital spot foil and varnish on their MGI press has changed the whole game of the invitation industry.

“We help our customers succeed with their customers,” says Doyle Mortimer, senior vice president. “We are not just a print provider but a trusted advisor helping companies make their market better.”

Several years ago, Alexander’s started working with Ancestry.com to print personal histories. Customers of Ancestry.com can upload their own data into the MyCanvas software and create family history books that are then printed by Alexander’s. To enhance the client experience with Ancestry.com, Alexander’s suggested the addition of calendars and family tree posters into the product offerings. The new products proved to be successful, and Alexander’s just recently purchased MyCanvas from Ancestry.com.

Another client of Alexander’s is a technology start-up that allows customers to print photo books from an app. Alexander’s has helped them increase the quality of photo renderings and photo books so they could deliver a better product to customers.

Alexander’s has embraced digital technology not only in its product line, but also has been experimenting with helping existing clients with SEO optimization and blogging. Another way the company has gone digital is through its own marketing initiatives. Alexander’s maintains social media accounts as well as a blog and has a full-time staff member dedicated to telling the company’s story through social media. Though social media has a driving presence in today’s electronic age, there’s still a desire to have something tangible.

“We’ve seen a bit of a swing with people bouncing from exclusive electronic marketing back to print,” says Alexander. “Something tangible, and in their hands, still has a profound effect on buying patterns.”

Also in the digital realm, Alexander’s is working with Day One Journal to take their journaling app from digital to physically printed books.

“Everyone knows that their computer will crash one day, and a lot of people want to physically protect a piece of their past,” says Mortimer.

Alexander says he never thought he’d be in the printing business for more than four or five years, but the constantly changing industry has kept things interesting. He adds that the company’s success depends on discipline, efficiency, adherence to the fundamental principles of accounting, and good business practices.

“They say that the ink gets into your blood and when you’re creating something every day, it gives you a sense of accomplishment,” says Mortimer. “Jeff is so creative, he’s creating all the time, and after all of these years, he still has the passion for what we do.”

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New Product Category Rules Issued for Paper Products

Posted Monday, December 11, 2017 by Jules VanSant.

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The American Forest & Paper Association (AF&PA), in collaboration with the Forest Products Association of Canada (FPAC) and FPInnovations issued Product Category Rules (PCR) for Market Pulp, Paper and Paperboard, Containerboard and Tissue products manufactured in North America.

The PCR provides rules and requirements for conducting paper product life cycle assessment (LCA) reports as well as developing Type III Environmental Product Declarations that communicate the environmental footprint of products to customers. The PCR development process included the participation of a broad stakeholder group including manufacturers, trade associations, government agencies, non-government organizations, retail representatives, independent parties, academia and other Environmental Product Declarations program operators.

“This PCR has been approved by an independent peer review panel of recognized LCA experts,” said Debbie Steckel, Executive Director of the American Center for Life Cycle Assessment. “It conforms to the requirements of ISO International Standards, providing consistent and transparent environmental evaluation standards with the highest degree of credibility.”

Lal Mahalle, project leader for FPInnovations, said, “Paper buyers can feel confident that product sustainability documentation using our PCR guidance covers the environmental impact categories that are published in recognized scientific literature and are most relevant to pulp and paper products made in North America”.

The PCR is available on the FPInnovations website:

PCR for North American Pulp Market Pulp, Paper and Paperboard Products, Tissue and Containerboard

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Printing Industries of Utah Joins Forces with PPI

Posted Tuesday, December 5, 2017 by Jules VanSant.

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Happy Holidays from Pacific Printing Industries! We hope that 2017 has been a great year for you, and we look forward to continuing to partner with you in the coming year.

The PPI Board of Directors and staff are pleased to announce that we are welcoming the Printing Industries of Utah (PIU) into our larger organization effective December 1st – this means PPI is now serving a seventh state. The regional membership coverage area is now Alaska, Hawaii, Idaho, Montana, Oregon, Utah, and Washington. We are excited by the opportunity to serve a broader print and graphics industry audience and wider geographic range. Moving forward, PPI is integrating the day-to-day business operations of PIU and has begun to offer expanded programming, partners and resources immediately. We extend our thanks to Alisha Hill for her service managing PIU as well as the entire volunteer board of PIU for their support during the transition and beyond.

This merger represents an amazing opportunity for both PPI and PIU. “In the long term, this change will be a huge benefit to our members here in Utah. It will allow us to expand our circle of influence across multiple state lines and build national relationships that will benefit our businesses. This merger will allow us to serve our local communities and foster regional growth within the printing industry” says Brad Johnson, chair of PIU.

A few other membership items – we are in the process of our 2018 strategic planning and continue to expand our calendar of local and national educational offerings. In addition, the majority of the iLearning Center curriculum managed by Printing Industries of America will be free to members starting in 2018. This is a great chance to support your new and experienced staff in on demand, expanded instructional opportunities. Stay tuned for more.

We are hoping to reignite advisory groups for the unique state / metro areas we serve. If you are interested in supporting your industry organization’s voice as we strive for relevancy, growth and new initiatives let us know! We’re looking for guidance in the following areas: workforce development, education, legislative advocacy, partners and expansion of our PrintROCKS awards. This will not require much time – we want your perspective and guidance as an industry leader.

Given our renewed geographic reach, PPI is considering a new identity and marketing strategy that adequately reflects all of its’ members and our ever-changing business segment. This will likely translate to a new website and overall branding for PPI. We will still provide all the same services, membership benefits and enthusiasm for the graphic communications industry - just with a new face and name!

We hope you finish 2017 on a solid note and are looking towards great opportunity into 2018. If you have any questions, want to get involved or just want to say hi, reach out to us!

Cheers,

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Jules Van Sant, Executive Director

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Trends in 2018 for the Print Market

Posted Friday, December 1, 2017 by Michael Makin, President and CEO, Printing Industries of America.

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With 2017 behind us, it is time to think about 2018 and what might be in store for print and printers over the next 12 months. My focus is on four topics essential to print in 2018:

  • The Overall Macroeconomic and Business Environment
  • 2018 Print Market Trends
  • Key Micro-Market Trends in Print
  • Crucial Business Opportunities and Challenges for Printers in 2018

The Overall Macroeconomic and Business Environment

First off, the most crucial determinant of 2018 trends will be the direction of the overall economy. Going forward, will the U.S. economy accelerate and pick up speed? Or, will it break down and fall into a recession after over eight years of slow growth? Or, will it continue the steady but lackadaisical pace of the past eight years? A case can be built for any of these three scenarios.

PIA’s view is that the economy will most likely grow at a modest but increasing pace over next year. We believe the recent economic acceleration will continue with growth in the 2.5- to 3 percent range. This is a significant improvement over the past few years and is based on some form of corparate tax reform being enacted.

2018 Print Markets

Print will, of course, generally track with the economy in 2018. Over the last few years, most printers that survived the Great Recession have seen their sales recover, although it has taken a few years. The typical printer that managed to survive the recession still took a severe hit in sales over the years 2008–2010—a sales decline of almost $300,000. On the plus side, survivors’ sales swelled by over $500,000 in the recovery phase of the cycle.On an annual percentage change basis, total sales of the average surviving printer (since many printers did not survive the recession) dropped by almost 10 percent in 2009 before stabilizing in 2010. Since the end of the recession, the average printer has experienced single-digit positive sales increases each year.

For 2018, we expect overall print sales to increase slightly, which would align with print’s tendency to perform best in a mature recovery phase of the business cycle. If the economy continues to grow in the 2- to 3-percent range, print should do well, growing by 1 to 2 percent in total shipments. Of course, if the economy picks up speed, print will accelerate. Conversely, if the economy declines, print will decline deeper and faster.

What about printers’ bottom lines? Over the last decade, the average printer’s before-tax income as a percent of sales has been around 3 percent. If the economy performs as forecast, we expect the profit rate may rise slightly to around 3.2 percent. If the economy stumbles, the average profit rate would drop to 2 percent or less.

Key Micro-Market Trends in Print

Within this overall sales and profit pattern there will be some key micro-trends. These include:

Profit Leaders Outshine Profit Challengers—While the economy and overall print trends are important, historically some printers always outperform others. PIA’s Dynamic Ratios program indicates that printers that achieve profit-leading rankings do so consistently. That is, achieving high profits is not a random occurrence but is achieved from strategic and operational excellence. Similarly, printers in the profit-challenger category typically remain in that category. This is not to say that printers that change their ways—improve themselves strategically and operationally—cannot move from profit challengers to profit leaders. They can, but the pattern will remain the same—about a quarter of printers will be high-profit printers and the remainder will basically break even.

Print Processes Winners—The current trends regarding print processes will continue in 2018 regardless of what happens to the economy and overall print markets. Print processes that will grow relatively fastest over the next 12 months include:

  • Inkjet—both wide format and production
  • Wide-format digital and inkjet
  • Digital toner based

Fast Growing Print Market Segments—The current trends for specific print market segments will also continue over the next one to two years. These print market segments will likely grow at relatively higher rates than other sectors: - Packaging and specialty packaging - Labels and wrappers - Signage - Direct mail - Point of purchase

Crucial Opportunities and Challenges for Printers in 2018

As described above, the 2018 environment will be challenging yet full of potential opportunities. Here is my checklist for printers as they contemplate their businesses for next year:

Plan for the worst but be ready to capitalize on opportunities

There is no doubt that the risk of an economic downturn is rising. At the same time, there is also increased opportunity for the economy to break out of the tepid recovery and accelerate. What to do? Educate and energize your management team and entire workforce to the possible economic and print market scenarios for the coming year. Remind them that the end of the year is the time to think about what went right, what went wrong, and what needs to change for next year in their areas of responsibility.

Additionally, remember that increased risk is not a reason to delay or eliminate investments. While the risks are high, the rewards are also high.

Make time for strategic thinking and defining your business

Strategic thinking is always imperative for success but it is even more important in a changing environment. When it comes to strategy in the printing industry, printers should address the dual issues of product/service focus and value-added ancillary services. Financial performance typically correlates with specialization by a printed product or vertical market. Also, diversification into various ancillary services usually correlates with higher profits. Printers need to re-think where they are in this process and consciously define their own business models.

Take a fresh look at pricing, estimating, and utilizations

Increased profits result from some combination of lower costs, higher prices, and/or increased sales. Too often, printers focus on costs and sales and ignore pricing and utilization rates. Profit leaders have higher profits for two core reasons—lower costs or higher prices. Develop a more nuanced and complete view of the relationships between costs, price, and utilization rates. The fact that a typical printing job is composed of 40 percent fixed costs and 60 percent variable costs provides printers with a lot of discretion in pricing.

Focus on education and training

Printers can gain a competitive advantage in human resources management. Profit-leading printers have a much stronger focus on human resources management, particularly training and education. Implement a “high performance work system.” - Be all-inclusive in benefits, awards, profit sharing, and bonuses. Employees should perceive equity in sharing gains in good years and pains in bad years. - Be transparent in sharing information on financial status, business plans, strategies, etc. - Develop knowledge workers. Invest in education and training opportunities for employees. - Link performance and reward. Reward employees based on individual performance, their team’s performance, and the firm’s performance.

Pay more attention to people costs

The profit gap between profit leaders (printers in the top 25 percent of profitability) and profit challengers (the remaining 75 percent) averages 10 percentage points—a whopping difference of $1 million in profits for a $10-million-a-year printer. Since roughly 40 cents of every dollar of a typical printer’s sales is expended on people (wages, salaries, benefits, and payroll taxes), managing people and their costs is a key determinant of profitability. Profit leaders are able to use less labor per sales dollar because they abide by the classic dictum of substituting capital for labor. Profit-leading printers employ an average of more than $15,000 in net assets per factory worker employed compared to average printers.

Prepare for tighter labor markets, higher compensation costs, and tougher recruiting

Finally, two out of three of our possible economic and print market scenarios point to significantly tighter labor markets. For printers this means be prepared for:

  • Increased wages and salaries to hold on to your workforce
  • More labor turnover as employees take advantage of the increased job openings
  • Tougher recruiting to fill vacancies

Take advantage of any tax law changes

Keep an eye on any changes to both personal and corporate tax laws and evaluate your business practices accordingly. Be ready to take advantage of changes in investment and depreciation rules, pass-through options, and other aspects of tax changes. Don’t wait until the end of the year to see how your business might be impacted.

At Printing Industries of America we will continue to focus on providing our members with the programming and services they need to maneuver in the coming dynamic environment. Good luck!

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Planning for Tax Reform

Posted Thursday, November 30, 2017 by Megan Moes, CPA, Falco Sult Supervisor.

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Source: PPI Partner Falco Sult

As a PPI and Printing Industries of America member you have access to a wide array of benefits, tools, and discount programs designed to help you succeed in today’s competitive market. Check Out what we have to offer.

It isn’t too late to save on taxes for 2017. However, year-end planning for this year presents a unique set of challenges for taxpayers. There are many uncertainties created by the proposed GOP tax reform legislation which could have significant effects on the current and future tax years. Tax planning in an uncertain environment is complicated, as you should consider current legislation as well as the potential scenarios if new regulations are enacted for the current tax year.

For individuals, the GOP framework calls for replacing and lowering the current individual tax rates with a new, three-bracket structure – 12, 25, and 35 percent. If you believe that the tax reform will pass for 2018 and you will be in a lower tax bracket for the next tax year, the standard tax planning advice continues to apply; defer income to next year while taking advantage of additional deductions in the current year.

The GOP framework, although not finalized and highly disputed, also eliminates all individual itemized deductions except for the mortgage interest deduction and charitable contribution deduction. On the assumption that any elimination or reduction of certain itemized deductions won’t be in place until 2018, acceleration of some of these items into 2017 seems to be a go-to tax strategy for this year-end.

Additionally, the GOP framework would limit the tax rate to 25 percent for pass-through taxable income reported on an individual’s 1040 from small businesses such as a sole proprietor, partnership, or S-corporation shareholder. For those currently in a higher income tax bracket with taxable income from a pass-through entity, a similar tax strategy deferring income to next year and accelerating deductions into the current year could be followed for small family-owned business as well.

The GOP framework calls for a 20 percent corporate tax rate. For year-end planning purposes, a strategy to defer income would only work for corporations currently paying the maximum 35 percent corporate rate. However, for small corporations currently paying an effective rate less than 20 percent, deferral of income might not be as effective for current year tax planning strategies.

Tax planning is not an exact science, and for 2017 with uncertainties of tax reform, year-end tax planning is especially challenging. As such, taxpayers must be prepared to implement timing strategies into late December if the GOP successfully passes tax reform legislation affecting tax years 2017 or 2018.

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