Trading on up

Rewind even 20 years and you would find an industry landscape that is virtually unrecognisable from today. Not only would you see a distinct lack of products from wide-format digital print through to sign letters available for trade only supply, but a sign-makers range of products and services would be far more narrow than they are now.

Jumping back to the present, the number of ‘trade only’ suppliers to the sign industry has expanded significantly. What has also changed fundamentally is that extensive digital machine automation has
meant that the productivity, quality and cost of such technology has come down signficantly in relative terms. 

The result has been that over the last five years especially a number of bigger sign-makers and niche visual communication product manufacturers have invested in top-end pieces of kit, realising that their overall profits could be significantly improved by ceasing direct-to-consumer trade and instead moving to supply smaller businesses in our sector with products at a trade price that they can then add value to, mark up and sell on to end-users. This has meant that even the smallest sign-maker can now buy in products from laser engraved name plates to long runs of PVC banners—essentially allowing them to say, ‘yes’ when a customer asks for products they have no capability to produce themselves.

So, with the number of trade suppliers to our industry continuing to grow, which of their business models are proving most successful, and why?

Venturing out

Perhaps one of the biggest success stories in the trade supply sector is Venture Banners, stepping into the now very heated competition arena of wide-format print supply four years ago. The company is run by directors Scott Conway and Wayne Bodimeade, taking the company from strength-to-strength through a no-nonsense approach to servicing our industry.

“We started out as marketeers and bought in an awful lot of print from banners to letter heads and various marketing materials. The one thing I noticed when buying in print was that the prices would fluctuate quite seriously, so when we founded Venture Banners our first move was to create a clear and consistent pricing policy across the board,” says Conway.

He continues: “At the moment it is £10.50sq/m, and in that way you can go to the trade, they know exactly what they are paying, they know exactly what they can put on to reflect market conditions and they don’t have to phone every two minutes for a quote. 

“As we are not being swamped with producing quotes all the time, it means our productivity levels are much higher than they otherwise would be. So I can honestly say that looking at our trade supply model, what has set it apart and formed the cornerstone of our business is clear consistent pricing.”

Conway explains that the main pressure that faces many trade suppliers to the sign industry is competition on price. What he claims the Venture Banner model has done is remove this as a deciding factor, flattening out the peaks and troughs that many sign-makers often have to contend with when considering where to buy from. He emphasises that another successful factor of the Venture model is that a sign-maker can put a 100 percent mark up on its products, and that this can be  justified with the quality of the product and speed of turnaround.

“If you look at our competitors their business models are often so complicated. You may be able to find banners that are a couple of quid cheaper per square metre this week, but it will change next week. This means time wasted trying to find another lower priced supplier, rather than just running your business. The other issue is there are often many ‘add ons’ which ‘cost extra’, eyelets are extra trimming the banner is extra, whereas we have simplified the whole process. For example our basic roller banner is £35, and you don’t have to buy ten of them to get that price.”

Conway concludes: “What this means in the end is our trade customers know exactly where they are, know what margin to put on and can be comfortable knowing the product and the price won’t change overnight. You can’t have your prices behind some captain midnight decoder ring that are impossible to work out. Products haven’t become more complex, its just that some companies have made things unnecessarily complex to justify their existence.”

Venture Banners has also taken the bold and innovative step of creating the VB Media Website, as co-director Bodimeade explains: “Our new platform basically gives our trade customers a completely autonomous website that they can update and manage themselves which can become their own ‘wide-format division’. I really do believe this is a very powerful tool which opens another channel of communication for a sign-maker with their customers. We do charge a nominal fee for it, buts it’s not a profit centre for us, if we didn’t charge something for it, everyone would have one but no one would do anything with it.”

A multiple approach

Another successful trade supplier which has seen year-on-year growth despite a moribund economy is Northumberland-based Multitechnic, which specialises in chemical etching and digital anoprinting. Formerly the company did a mix of direct-to-consumer work, but has made the move recently to become a dedicated trade-only supplier. The company’s managing director Colin Edge, much like Venture Banner’s Conway, is a strong advocate of simplicity: “We are a dedicated trade-only supplier as we believe this is the only way to take our company forward. We are certainly the only trade-only sign etching company in the UK, and one of just a very few trade-only suppliers to the sign industry.”

Due to the more complex nature of Multitechnic’s products and services, the company has created a service that sees it able to turnaround qoutes in under an hour, and the ability to dispatch jobs within two to three days. It currently manufactures its etched signs in stainless steel and brass, and its anoprinted signs in satin or matt aluminium. Once again this service fulfills a niche in the market place that sees hundreds of sign-makers up and down the length of Great Britain seeing customers regularly ask for such products, but not in volumes that would justify a capital investment into the equipment and training to create them.

Edge continues: “Like everyone else we used to have a mix of direct and trade customers. It took a long time for us to realise that the two were incompatible. We used to take on projects that were very profitable, but while servicing these we were not able to focus fully on our trade customers too.”

This approach has no doubt been driven by a wider industry trend that has seen sign-makers demand quicker turnaround times, for more complex projects, to perfectly exacting standards. This in itself has been driven by end-users who, in a heavily competitive buyers market, are becoming increasingly demanding. Another influencing factor is that the volume of work for trade suppliers has not grown as fast as the number of companies in this sector, giving their customers—the sign-maker—more leverage when it comes to pricing and service.

“Inevitably we let people down, and that is no good for a trade supplier, so we took the bold step of turning away our non-trade work so we could concentrate properly on our trade service. It was the best decision we could have made. We changed the equipment, the way people worked, the entire way of thinking in the whole company from production to administration to become a dedicated etching department for each of our customers.”

Edge admits the move was a hard decision and highlights that it, ‘cost a heck of a lot of money’. From his perspective it was a gamble worth taking though, pushing the company into a space where it could efficiently cater for the trade rather than compete with it. He also highlights that during 2008 and 2009 there was a lot of price competition, but that sign-makers are now increasingly valuing quality of service and product.

“The trade supply model we have created has been customer driven, and that is why it has been so successful. What our customers wanted from us was a trade supplier who was ready to respond rapidly to enquiries and jobs, so we changed everything to give them exactly that. We are regularly told by customers that we are the best supplier they have, and that has to be the best measure of success.”

A professional approach

Another young contender which is making a name for itself as a ‘trade-only supplier’ is The Sign Group. Founded three years ago, it has seen its customer base grow exponentially by adopting the latest manufacturing methods while staying flexible when it comes to changes in demand for products and services.

“We have always been a trade-only supplier, and fully focusing on this area instead of dealing with end-users has made us much more efficient and able to provide a highly professional service,” explains Graeme Hoole, director, The Sign Group, adding: “The big change for us was to improve the way we market ourselves and communicate with our customers. This is something few of our competitors do properly and by advertising in trade magazines, using social media and direct marketing such as e-mail marketing, we have been able to communicate our strengths and what sets us apart.”

A central reason for The Sign Group’s rapid growth over the last three years is, as Hoole explains, they stick to a tried and tested method of taking continual customer feedback and then acting quickly to implement good ideas into its business model. In this way the company has been able to adapt quickly to fluctuations in demand and fashion in the market place by diversifying as a trend is gaining momentum.

An example of this method has been the recent creation of the range of circular projecting signs illuminated with LEDs. Hoole outlines they could not source pre-fabricated elements to put together, and so designed and manufactured the product from core components in-house. This development has also led to the creation of a dedicated website supplying LEDs as a trade-only product, passing on volume buying discounts they gain from buying the units for their own product manufacture.

Hoole continues: “Another element that has been successful for us is rather than entering a price war, we provide targeted discounts on products that we know our customers value and rely on, or we offer services like free delivery. This works to keep our revenue generation on track, supports our customers and gives us the means to reinvest in new products and services for which demand is growing. If we can’t say yes to a customer when they ring us with a product requirement, then we always refer them to a supplier that can—we want our customers to know that if they ring us they will always get a constructive answer.”

The Sign Group’s success in recent years becomes all the more interesting when Hoole reveals that is still only has twelve core staff members. But perhaps this is part of why the model works, as Hoole outlines their focus is on total efficiency and perfect logistical organisation. To facilitate this the company has invested in a digital signage-based management information system (MIS) that keeps every member of staff continually updated with the company’s ongoing production processes and job schedules. Another central element has been focussing on customer education, and making sure that the correct artwork and information is provided in the right format so that there is no time wasted in changing the finished product or chasing customers.

Hoole concludes: “Another key element for us last year in strengthening our portfolio of products and services was going to Sign and Digital UK. This meant we could make a series of capital investments that improved the quality and speed of service we provide to sign-makers, which in turn has helped us stabilise our pricing structure. The other result has been that we have been able to reduce our margins as we are selling higher volumes, meaning both our turnover and profits have improved by more than 20 percent.”

The choice

Speaking to three trade-only suppliers that service the three core segments of our industry has given rise to some conclusions that have surprised me. Firstly, I always assumed that the more complex and staggered a suppliers services, the more flexible they would be to respond to demand. The common wisdom I have taken on board is that complexity can often lead to clumsiness from a trade supplier, and that now it is business models that revolve around simple, well-developed, clearly-priced and quickly supplied products and services that are currently making the most headway in the market.

Another key factor is that trade-only suppliers are now being forced to become far more flexible and adaptable than they were even five years ago. This is being driven by a wide-range of sign-buyers from mega-retail stores through to small shops that are far more influenced by fashion trends when it comes to branding signage than ever before. Indeed, in the last three weeks my local ASDA has changed its outdoor branding from soft signage tear drop flags, through printed PVC hanging banners, to staff carrying digitally printed and cut promotional boards. 

With this in mind, my advice is to invest loyalty in trade suppliers that are flexible when it comes to product development and have a clear pricing structure that allows quick quote generation and job turnaround. If they are worth their salt, then that loyalty should bear dividends and result in far less time wasted in shopping around every time you place an order.