Show me the money

Time and again in interviews with the good sign-making public of the UK I have heard complaints about a ‘price war’ around applications like banner printing and its associated forms of application—whether that is your bog-standard eyeletted promo advert outside Tesco or a high-end stretched and backlit light box in a fashion store.

Indeed, just last week I was on the phone to a sign-maker in Glasgow who had just lost a major national contract to a brand new ‘fly-by-night’ firm that was quoting prices that were roughly half his. His view was there was simply no way they could be making any kind of profit margin on the job and it was simply to steal away customers and then hopefully get them for better margin work at a later date. This story is all too common, and long gone are the days of the ‘banner boom’ when buying a 64” printer and securing a supply of next-day vinyl was a sure-fire recipe for making your riches. In fact in some areas, like pop-up exhibition stands, prices have actually decreased by half or more in the last decade.

So, with this issue in mind I set out to discuss it with some of the great and good of our sector, quizzing suppliers about how our industry can re-discover the value in this sector. Russell Alexander, national sales manager at Innotech, was first up. A key supplier of large-format printing materials, portable displays, and point-of-sale solutions, we discussed how sign-makers can lift themselves out of the price war around ‘banner printing’ and offer extra value to enhance their profits. 



“To improve their profits on vinyl banners, sign-makers can stock and offer their customers two different grades of PVC Banners, such as basic and premium. They can then highlight the benefits of the premium range, such as the quality of the images printed onto it and the longevity of the hardwearing material, positioning the premium alternative as providing a higher return on investment,” suggests Alexander.

‘Ok, done that and got the t-shirt I hear you say’. Well, let us dig a little deeper here. What Alexander went on to explain is that you essentially cost and create a price list that would help you identify quickly where work is just not going to pay off, and where you can upsell a job to retain better profits.

He continues: “Sign-makers should also make their customers aware of the advanced materials available for vinyl banners such as Fire-rated PVC materials and PVC-Free materials, as these both offer higher profit margins.
 
“At Innotech, we offer both materials. Our Fire-rated PVC banner makes a great high value product and meets the FR-B1 UK standard. Added to this, we offer an environmentally friendly alternative—the Envirotech PVC-Free Banner—which helps customers improve their carbon footprint and boost their green credentials.

“To rediscover the value of vinyl banners, the industry as a whole needs to diversify product ranges to add value to customers. An easy way to do this is to provide useful accessories for banners. Supply bungee cords, zip ties and fixings—things that customers need, which are not costly for your business. To gain buy in from customers you can also offer and market the add-ons as a special ‘bundle’ deal, and position them as things that make customers’ lives and jobs easier.”


Another fundamental factor Alexander points out is that many customers call up asking for a ‘banner’, but if you spend time talking to them and understanding their objectives, you will often find they are happy to pay more when they find out how much better their advert or brand would look if that graphic was integrated in a flex face, backlit, or even integrated into a free-standing pop up stand.

Green fingers

It is well documented that competition out there amongst sign-makers, wide-format print specialists, and commercial printers is tough when it comes to banner printing work and its associated spin-offs, with a large number of sign and graphics companies in our case offering this as a low value, bread and butter commodity.

However, given the right materials, there is still good profit to be made from banners if the right choices are available to attract large retail brands and the ever-expanding exhibition industry—and green is definitely the way to go.

Already mentioned by Alexander from Innotech, this is also very much the view of Andrew Simmons, sales director at Soyang Europe: “In recent years, large retail brands have set about addressing a shortfall in their environmental credentials, and one way in which they have done this is by specifying all their banners, lightboxes and other sales and marketing graphics are produced using recyclable materials, with eco-friendly inks, making as minimal environmental impact as possible.


“Printable substrates, such as the Terratex PVC-free range of textile banner material, are printable with latex and UV inks and can ensure sign and graphics providers stand a good chance of attracting these high calibre brands, and as a result, can charge more for providing that all important ‘green’ service.”

Another sector that seeks out recyclable and green solutions is the exhibition market, and Simmons says he sees more and more that ‘green products’ are being stipulated to reduce the impact that the events industry is having on the environment and this is something that print providers can tap into to boost banner making profits.


He concludes: “The range of 100 percent recyclable banner material we provide here at Soyang gives sign and graphics companies the credentials required to win big contracts in the exhibition arenas. Other benefits of PVC-free recyclable banner, like the Terratex range from Endutex, is that it’s textile-based so not only does it have your environmental boxes ticked, but it’s lightweight to ship, doesn’t get creased in transit and the finished products look amazing.”

Remove the hassle

Now, while there have already been some very good suggestions to get you thinking about how to breathe new life into your bottom line, there is also a third way. The UK in particular, more than likely because it was a very early adopter of wide-format print technology, has a solid number of highly-reputable trade suppliers that offer banner, exhibition graphics, and finishing as a trade service. And it is using these firms that have seen a lot of sign-makers find their feet again in this sector, sending lower-value work to the trade supplier that has immense economies of scale, and focusing their print technology on the previously mentioned higher-value applications.



One of these firms is Venture Banners, the managing director of which, Scott Conway, has a very positive view of this sector, and believes there is now a bright light at the end of the tunnel when it comes to a stabilisation of the market. The trade supplier has also just spent nearly £600,000 on new infrastructure and equipment to expand its services, maintain its pricing, and widen its reach.

“We price our products so our customers can make a good margin on them. If you look at a Raptor roller banner for instance, at £35 trade price with the unit, you should be able to sell that for £70 to a retail end-user. Banners are the same. We sell at £10.50/ sq m and you should be able to sell it on at £16 to £20/sq m depending on the volume,” explains Conway, who adds: “We just don’t get customers coming back to us saying ‘I am being squeezed on margins’, because we do all the hard work and they just buy for one and they sell for two. There aren’t any hidden costs that would normally cause them to lose money, so miss-prints, errors on graphics, materials failure, poor workmanship, broken down equipment, failed printheads, and so on. They know the price, they set-up the job, and it is hassle free. It is these issues over time that start to eat away at your margin if you are doing all the work in-house on a small scale.”



Conway continues: “There is not a fight to the bottom between our customers. But that is because we can produce our products at a very low price because we have a big volume operation. In fact, most of our customers do not buy from us to fill big volume orders though. It is because very few of our customers can produce printed and finished banner-based products at the level we can, or even close it. And that is often to do with ink costs and all the issues I mentioned earlier that rack up the overheads for them.”

O Factoid: Venture Banners sell its printer vinyl at a trade price of £10.50sq/m, meaning it can produce it for far less than that. It achieves this not just through running heavy duty super-wide printers, but by investing heavily in automated finishing systems. O

Another key issue raised by Conway is that banners are not actually easy to produce and finish to a good degree of quality, and that mistakes in finishing can be time-consuming and sap further profit margin in terms of labour costs.



Conway continues: “If you get a volume job in it seems great, Christmas has come. But then you realise you only have a hand eye-letter and small-scale banner-tape seaming system. So, your staff have to spend a lot of man hours doing grunt work and end up with arms like pop-eye, or you have to invest in bigger kit for one job that removes all the margin again. They would have been better spent working on jobs that take less time and offer greater value per unit.”

Work smart, not hard

A key comment from Conway after this assertion also strikes home, as he says “unless you are really geared up towards volume work then you end up being a busy fool”. A heavy-duty eye-letter is £10,000 and its £25,000 for an automatic hemming system. And maybe a medium-sized sign firm could take that for a printer, but not then for finishing kit too. So, they end up trying to do it by hand and this is really where the margin just leaches away. So, Conway’s point is not that it is a price war that is causing the loss in value around banners, but that technology at the higher reaches of the industry and in the volume sector has brought down costs per unit. This means that it is becoming less feasible to make money from doing standard banner work if you are finishing them manually.

Conway concludes: “I think the positive thing, based on my own experience, is that the price war around banners is calming down. That is because many of those who bought a second-hand printer and a load of cheap vinyl went out of business as ink prices have continued to climb, and there is little acceptance of poor quality work these days. There is still those who try to set up in a garage or their front room and sell just on price, but they will also soon get bored running around and not making any money or they will go bust.



“Part of that stabilisation of pricing has come from us in the trade supply sector, as we offer a consistency in price, superb quality, and service. We have a large operation, and our pricing and set-up takes out the gamble for many sign-makers and gives them an assured profit on volume work—so they can focus on short runs of more bespoke work that can’t be done on a volume basis. We give them all the tools they need, including their own website, so they can go off and sell large-format print.”

Some sage advice from Conway, and also the other two wise men interviewed previously, is that if your customers are going elsewhere for cheap deals then it says you need to work harder on the service you are offering them and the value you bring to them. Of course, there will always be those who think they can have their cake and eat it too. But if you can keep your customers close and educate them early on ‘that there is no such thing as a free lunch’ when it comes to getting a quality product, when they need it, then you should see far less business lost.

And the other vitally important conclusion is that if you own some nice printing equipment, then it is perhaps well worth your while using it for applications where its strengths really lie, and tie-up with a trade printer to service your volume needs and get rid of the hassle. So, the banner boom it seems has not abated, but the way to capitalise on this growth market needs a lot more thought and strategy then was once the case.


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