Wednesday, 06 Apr 2016 15:39 GMT

Trade Supply Economy

Why do so many sign companies opt to use trade suppliers? Harry Mottram delves into this sector of the market to find out some of the benefits and potential problems

A band of brothers

There are more sign companies than ever before because it is easier than in previous years to set up shop and start trading. Gone are the requirements to have specialist skills in calligraphy and engraving, sign painting and fixing, along with a lengthy apprenticeship. Now, with basic equipment, a wide-format printer, a van, and a website, you can set up a business from your home.

Many a firm has started in a lock-up garage, a shed or as a side line to an existing business. Overheads are low, outgoings minimal, and for a few glorious months, a new signage outfit of one or two people can easily undercut established competitors. However, there is one major catch: you may advertise that you can do anything from a shop sign to information graphics at an airport, but in reality you will have to use more specialist trade suppliers to help you out.

All things to all men

“Getting into the sign industry is relatively easy seeing as there is no need for qualifications or licences to set up a sign making business,” says David Catanach, director of the British Sign and Graphic Association (BSGA). And there’s the rub. Take a look at the advertising for most small sign companies—often ones that have just appeared—and they appear to be able to offer just about every type of sign-making available. From sophisticated LED lit signage for a shopping centre, to basic banners for a farm shop to be hung up on the fence outside, or a modest point-of-purchase display in a corner shop, many sign firms say they can take any order great or small.

Obviously nobody wants to lose work and an order for something that cannot be done in-house can lead to other business that can be turned around by the company without sub-contracting. However, there is another obvious reason why more firms do not manufacture in-house and seek trade suppliers to subcontract out the work they cannot do themselves. The more technology and marketing moves ahead, the greater variety there is of signage to choose from, and the demands of clients continually increase as the global economy expands.


Look back: since the earliest days of the sign industry, companies have used trade suppliers to help them expand their business by using artists and new techniques like these enamelled signs



Indeed, the explosion in merchandising has led to new forms of signage. It is now possible to print onto anything from a mouse mat to a mug, plus there has been the growth of 3D signage, LED signage, vehicle wraps, plane wraps, and all manner of graphics and imagery on just about every surface from pavements to the floors of shopping malls, and directional and information graphics, as well as textile graphics. Not even the largest firms can now do it all in-house—if they ever could. Using trade suppliers gives a company flexibility and broadens their portfolio, making them more attractive to their clients.

“A lot of people are using a trade service to build the business up before bringing the production in house,” says Loïc Delor, managing director of Josero Printing Solutions, who adds: “It’s like a safe step, rather than having to invest in machinery without the order book. People use a trade service, grow the business and once the amount of orders can support a machine investment they bring the production in house.”

People use a trade service, grow the business and once the amount of orders can support a machine investment they bring the production in house”


The BSGA’s Catanach says it makes sense to use trade supplies when the job is too specialist for a company to handle. He adds: “It would make sense therefore that if you can use the skill sets of other companies who are offering their services, why wouldn’t you? It allows you to offer a wider range of products and solutions. In addition, buying what can sometimes be costly equipment for just one or two jobs that you are not sure will come your way, makes no economic sense. As time goes by and confidence in manufacturing yourself grows, that is when sign makers invest in equipment that they know will cater for their business, give them control in the manufacturing process and bring them in the bigger returns on investment.”


Complexity: with so many new types of signage available, it is impossible to be all things to all men and using specialists gives a better service



There is also another more traditional reason, and that is about capacity. Many firms will have experienced that moment when they just cannot cope. Too many orders for work, which they could normally knock out without any worries, come in all at the same time. That is when your friends in the trade up the road that have spare capacity come in handy—and of course there are some companies that specialise in only supplying the trade.

In an interview with our editor Brendan Perring, SignFab’s managing director, Carl Hodgson says: “We have always been a trade supplier, and we always will be. We would never entertain selling to the end-user. It’s all about working to your strengths; we stick to ours and let our clients do what they do best. There’s a lot of trade suppliers that do sell to end-users, and many of our customers come to us because they know we are not a threat to them, and the confidentiality is always there.”

O Factoid: The signage industry is part of the creative sector which is worth more than £75bn a year to the UK economy according to the government. O


“As a trade supplier, the biggest issue we have is price. We strive to achieve the top level of quality, combined with the service and pricing structure to complement that. Everyone can drive suppliers’ prices down to a point, but inevitably the major saving you can be making is efficiencies within your processes, and that’s the area we have focused on.”

Sheer volume

Craig Brown, managing director of Signs Express picks up on this point, adding: “Simply put, having supply partners can be much more cost effective for small- to medium-sized sign companies. The sheer volume of substrates, and materials that we use on a daily basis to create the large catalogue of signs that we provide, would be difficult and costly to house under one roof. At Signs Express, we are always looking to add value for our customers and cater directly to their needs, therefore we partner with suppliers who are the leaders in their field and can offer premium products at competitive rates. We then have the ability to pass these benefits onto our clients.”


Advice: Craig Brown of Signs Express says that having supply partners can
be more cost-effective for small- to medium-sized sign companies



Brown continues: “If we believe that we can do it better or that we can add value to a specific product, we will bring it in house, but the excellent relationships that we have nurtured with our suppliers, rarely means that we have to do this. We always marry our skillsets up with our supply partners in order to offer our clients the best signs and graphics on the market.”


Specialist: the world of signage is ever expanding with a variety of skills required as the possibilities for display grows, such as this frontage in Sao Paulo, Brazil



Rudi Blackett, the man behind one of the industry’s largest trade shows, Sign and Digital UK, also weighs in on the debate, commenting: “One of the main reasons for visiting Sign and Digital UK is to gain advice from the suppliers at the event. The show is perfect for this as you will find experts on stands who will give technical advice as well as information on how to maximise output and find new revenue streams and markets.”


Big: from billboards to building graphics, there are now companies that specialise in one or more sectors, meaning sub-contracting out other signage work is essential



If you have been to the show looking for new kit you may have noticed the ‘I’m-only-having-a-look’ brigade. They are investigating potential business opportunities such as expanding an area of work related to the sign industry. Shop fitters are one classic example, as are printing companies and architects. They already have contacts and clients who regularly need signage and they will sub-contract signage work to them for larger projects. As work grows, they look into the possibilities of starting their own sign-making wing and using trade suppliers to fill the gaps when they do.

Building a partnership

But one issue of using trade suppliers is the potential loss of control. Once the work has been passed to a third party then it can be a question of ‘out of sight and out of mind.’ That can happen, but as Brown of Signs Express emphasised, it is about building a partnership of trust that means for the client the work is seamless with a faster turn-around and a wider range of signage on offer.


Wrap: once all vehicle graphics were hand-painted, but with wide-format, trams like this one in Germany can be wrapped using a trade supplier



If a trade supplier can turn the work around faster and more effectively than the incumbent sign company that has an order from their client, then clearly the system works if the price is right. It is all about building a business with a band of brothers in the sign industry. The signage industry is part of the creative sector which is worth £75bn a year to the UK economy. And with an ever-expanding range of signage available in the flourishing creative and graphics world, then this is one aspect of the sign business that is set to expand.

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