Inside the Print Shop

11- Commercial Printers

Gain a better understanding of the most diverse type of printers — a general commercial printer. The module identifies what separates them from other types of printing companies, their customer set, production capabilities, and opportunities.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Pat McGrew: Hi, I am Pat McGrew with McGrewGroup, and I am with my colleague Ryan McAbee from Pixel Dot Consulting. Ryan, say Hi. 
    • [00:00:08] Ryan McAbee: Hello, everyone. Welcome to another edition of The Print University. 
    • [00:00:11] Pat McGrew: We are here this time to talk about commercial printers. Ryan, commercial printers are the jack of all trades of the printing industry.
    • Let's jump in and talk a little bit about what makes a commercial printer. 
    • [00:00:23] Ryan McAbee: They really are jack of all trades. They are a for-profit company. If a customer comes to them, they want to say yes. That is just a default behavior. Even if they do not necessarily have the capabilities to produce the in-house, they will still say yes and then figure out how to get it made.
    • [00:00:36] Pat McGrew: We often call them general commercial printers because they are willing to not only do things in-house but also work with organizations we call trade printers, who typically do not print for you and me - they print for other printers. That is the business model that they built.
    • One of the things that we like about commercial printers is that they are experts in everything from small batches, all the way through to the biggest ones. A general commercial printer can be a small mom-and-pop shop that just happens to have a certain kind of clientele, but it can also be a global entity that prints on every kind of equipment everywhere in the world.
    • [00:01:14] Ryan McAbee: That is right. The reason I said it is the general guideline here that it is small batch is that, by nature, they print a diverse mix of applications or basically finished printed products. What that means is that they will have one job or one run on the printer, which may be a 36-page booklet. The next run coming across might be postcards that are going into the mail stream. The next job across, even on the same piece of equipment, might be letterhead. It is just that kind of turnover.
    • In an ideal world, they will try and batch similar kinds of work and stage it back to back just because that is more efficient from a production standpoint.
    • A lot of times, they do not have that luxury because it is just such a wide variety of work that they are doing. The other thing I think that is interesting, Pat, from a commercial printer perspective, that is really happened over the last five-plus years, is the fact that they started out with many kinds of analog printing equipment that is small to the largest offset lithography presses, which is what you see here in the picture. Then the digital revolution happened, and you had the digital printers come into play, which is electrophotography and now inkjet in many cases.
    • They added that equipment along the way to augment their capability so that they could print very small jobs properly, and then they could still transition to the larger runs on the analog equipment if they wanted to. About five years or so ago, they started to adopt wide-format printing equipment. Now a lot of them can do many different signage applications as well. We do not often associate that with general commercial printers. I bet if you walked into nine out of 10 commercial printers these days, you would probably find them with wide format equipment, too. 
    • [00:02:36] Pat McGrew: Because wide format is generally not expensive to get involved in. If you are already a printer and you understand textile or other substrates, and you understand color management, away you go.
    • That brings us to who the customers are. Again they could be just about anybody. They could be the local businesses. General commercial printers very often have national and global accounts that they service. Sometimes even small shops will service very large accounts because there is some niche specialty that they have been able to sell into a specific market. They are not really very constrained. 
    • Some of them are specialists, though. We talk about real estate people having certain requirements, restaurants having certain requirements, doctors' practices, and heck, construction sites having requirements, right? Anybody who needs any kind of print probably has a printer that they go to that is capable of doing not only their brochures but employee signup sheets and all the different forms that go with running any kind of business.
    • [00:03:32] Ryan McAbee: That is right. The way that I naturally group them is that you have a set of commercial printers that do really focus on the end consumer. That would be anybody that walks up off the street, goes to the counter, and says, "Hey, I need X, Y, Z." I need business cards. I need stuff for my small business, or I need stuff for the local school, or whatever the case may be. That is really the B2C model. 
    • Then the majority of commercial printers operate in a business-to-business kind of sense. They are doing work for other businesses. They may not have that kind of walk-up counter type of service. Usually, they are in more of a warehouse district in the city because they have more space there to have all their equipment, and they do not really need that retail presence.
    • [00:04:06] Pat McGrew: When you start thinking about it, franchise printers are very often commercial printers because they do that diversity of work from business cards to brochures to signs. We see that a lot. Customers of commercial print, it is everybody. 
    • [00:04:20] Ryan McAbee: Pretty much is. The way I like to think about the franchise printers is that their local presence may not have as many capabilities or larger format sizes because they are constrained from a footprint perspective. They only have so much size if you are in the high street or the main street of a town. They can often then outsource either through the franchise or maybe other places to do all that other diverse work. 
    • [00:04:40] Pat McGrew: They have access to a network of other franchisees and often also trade printers.
    • [00:04:45] Ryan McAbee: That is right. 
    • [00:04:46] Pat McGrew: Ryan, what do they print? We have talked a little bit about it, but it really is pretty much anything that you can put a mark on. 
    • [00:04:54] Ryan McAbee: They will print for anyone and print just about anything. I think that is the slogan that we came up with for commercial printers so far in this session.
    • It is that mentality. Again, we are going to say yes - to be able to produce just about anything and then figure out how to do it. Because they generally have a mix of equipment that has different capabilities, they can do everything from printing magnets to doing direct mail to any kind of business or marketing collateral. 
    • Sometimes though, the printers (you talked about this on the customer side a little bit), naturally have their top-tier customers that are often in vertical markets that are specific to them. They may work with an automobile manufacturer. They might work with a pharmaceutical company. Or whatever. Naturally, that groups the type of work that they are doing. But in some cases, commercial printers also specialize. It is not uncommon that you have a commercial printer that specializes more in book publishing versus doing everything.
    • So you do have the variety. 
    • [00:05:44] Pat McGrew: Who they serve drives the kind of equipment they buy and the kind of finishing capabilities that they might have. That brings us to that conversation about capabilities and types of equipment. 
    • We have talked a lot in our series about the differences between analog printing and digital printing and the different formats - sheet-fed versus web-fed. You might have any and all of that in a commercial printer. 
    • They may specialize in digital only. They may specialize in analog only. I think more and more we see organizations who were born and raised on the offset side, dipping their toes into acquiring digital equipment to augment short-run work that they might want to do.
    • There is also a diversity of finishing capabilities that can actually be a function of the segments that they serve. If you only ever do staple-bound documents, you probably do not have a motion cutter to do intricate cuts in the back of the shop. If you do a lot of specialized greeting cards or specialized assignments, you might have exactly that equipment in the back.
    • [00:06:42] Ryan McAbee: That is true. We talked about in the beginning the trade printer kind of concept, where they will basically outsource some of that work or maybe all of that work if they do not have that capability in-house. One of those areas where we do see more outsourcing to trade establishments is the finishing area. Being able to perfect bind books is a great example. Many people do not have the added cost because they just do not do it in enough volume to where it justifies having that equipment. But there are trade printers that just basically specialize in that. So you will send out the printed work to them, they will bind it, and then they will ship it, or send it back, and you will drop ship it.
    • Finishing is one of those areas, I think, where you do see a lot of capabilities in most commercial printers, but there are still limits. They will say it does not really make sense; we should probably outsource these. 
    • [00:07:22] Pat McGrew: We have covered the world of general commercial print, but we have not talked about the challenges and the opportunities. So let's do that for a moment. 
    • General commercial print, because it is so diverse and can be almost anything, does bring some challenges with it. We know that in today's market, we have supply chain challenges. To be honest, in all the years that I have been in the print industry, there have always been supply chain challenges at different times. Sometimes it is paper. It is ink or toner that has always had those challenges. Today we have a lot of labor challenges, but there are a lot of other sorts of industry segment and segment challenges that we probably need to be aware of as well. 
    • [00:08:02] Ryan McAbee: You are correct in saying that there are, at any given moment in time, different supply chain and labor issues and shortages that we have to deal with. For commercial printers, one of the things, in comparison to what a pure sign printer has to deal with, is to think about more than just profit margin pressures. Many of the types of work that they do are considered more of a commodity at this point. You cannot charge the same premiums as other things. 
    • That is why they have diversified. They are adding the kind of more unique print capabilities, to add more colors or embellishments to the product so that they can have a more premium charge. And the other thing they would be doing for profit measure is to shift their mix of things that they print - going to wide-format applications, which many times have a higher profit margin profile than general commercial work. This is how they have evolved over time. 
    • All of these challenges - that is the thing I love about the commercial printer mentality. It is “yes to everything.” But they also are such creative thinkers in confronting challenges and figuring out paths to move forward. We have seen them take advantage of these opportunities to combat these challenges where they diversified their product, they are shifting to those higher-margin products that we just mentioned, and they are also looking to control that bottom line. They are really good at that in many cases. So they are controlling their cost of automation and so forth. Pat, what else do you see there? 
    • [00:09:09] Pat McGrew: One thing I think we have seen a lot of commercial printers do is to look carefully at their opportunity for automation in their workflow, but also in manufacturing, which involves the use of robotics.
    • A lot of arms to move things or things to place things. There is a lot of robotic capability in the market right now that printers can take advantage of. Automated guided vehicles to move pallets of paper from place to place. That speaks to ameliorating the labor shortages that we often hear from printers. It is hard to find people to work in the warehouse or to do a lot of the work.
    • Anybody that you hire - it is going to take some time to train them. Anything that you can automate through robotic processes that eliminates a person so you can put your person on your higher value work is always a great thing. 
    • I have to agree with you. We have said it several times. For every general commercial printer out there, there is always an opportunity to diversify the products that they offer. If you look at the history of any printer, you are going to find that what they are printing today and what they are offering the market today is probably a long way from where they started because the desire of the buyers has changed. The needs have changed. The kinds of communication that we typically produce today is different. I think it is one of those opportunities. General commercial print in printing is always an exciting area to be in. 
    • [00:10:26] Ryan McAbee: We hope that you have learned a little bit more about what a commercial printer looks like, how they operate, and how they think. Join us on a future episode here at The Print University.

12- IN-PLANT PRINTERS

What makes an in-plant different? Learn about the three major types and operating models of this unique printing operation embedded into larger organizations and businesses.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Ryan McAbee: Hi there, and welcome to The Print University. My name is Ryan McAbee with Pixel Dot Consulting, and of course, I am joined by my partner in crime, Pat McGrew, with the McGrewGroup. Hello, Pat. 
    • [00:00:11] Pat McGrew: Hello, Ryan! We are here to talk about in-plants, and we are not talking about the teeth thing, right? What we are talking about is a very specific style of printing.
    • If you are in corporate America, you are probably used to being able to take your print request to an internal organization and having them produce what you need. But they actually can be found in a whole lot of different places, right? In-plants are in educational environments. They are on big office campuses that serve multiple businesses as well as being inside specific companies. They really are mini-commercial printers.
    • [00:00:49] Ryan McAbee: Yeah, in many ways, they are. The way I think we distinguish between the two and what makes in-plants special is their charter; their primary purpose is just fulfilling whatever the parent organization or enterprise or organization needs first and then doing other things for other companies. 
    • They do have a lot of the same capabilities as commercial printers. They tend to be general purpose in the in-plant, and they tend to be a little bit smaller in their format sizes and smaller in their equipment choices. However, not all in-plants are created equally, as we just said.
    • So there are some that specialize in different products, and they can get quite large. 
    • [00:01:31] Pat McGrew: The first in-plant I ever visited was for an insurance company where they were running five Komori presses, and other offset presses, back in the nineties, and they were just beginning to get into digital. I think over time, we have seen a lot of in-plants move towards digital because of cost models, footprints, and capabilities. There are in-plants somewhere in the world running every kind of equipment and every kind of finishing.
    • [00:01:59] Ryan McAbee: How I group them and organize in-plants is the rule of threes. You have the corporate in-plants that, in many cases, are that walkup model. I am going to go to the print shop inside the building and request whatever I need. Maybe they have advanced to be able to do that through some kind of portal that they offer through the enterprise to order the print without having to physically go to where the print shop is located. There is that kind of corporate structure. 
    • Then you have the type you were talking about, where they are more transactionally focused. They are doing bills, statements, and regulated customer critical communications. And those are more niche, but they also tend to be larger operations, too. Just the volume that they have to print!
    • Last but not least, we have many different flavors of educational-focused in-plants. This could be in primary level education, or it could also be in the higher education ranks. They function a little differently because the needs are different between those two entities. 
    • [00:02:54] Pat McGrew: If you have been in the industry for any length of time or you have been around businesses, you might have heard the term copy reprint center. In a lot of organizations, the copy reprint center used to be the home of a lot of copiers, and over time became the home of true in-plant printing. Technology changed enough to make that the more logical way to handle the needs of the different departments in the organization. There are three basic kinds, but they all have different operating models. There is a lot of variation among them. 
    • Some of them have cost centers. In a cost center model, the printing is considered an expense. It puts a little bit of pressure, if not a lot of pressure, on the operators and the department head of the in-plant because they are constantly being put under pressure to keep costs very low. It makes it harder to invest in new software and hardware to produce the print everyone is asking for. It is the way the organization has chosen to take care of what it takes to run that in-plant. 
    • You can have a cost recovery model. From a business perspective, the in-plant is actually selling the print to the department. In many cases, they sell it at cost, right? Their job is not to make a profit. Their job is just to break even at the end of the year. So everybody pays their fair share. 
    • Then there is the for-profit model. We are seeing a lot of that, and hybrid cost recovery for-profit models in the in-plant area. An in-plant becomes so efficient and so good at what they do that they actually have some excess capacity, and instead of just letting that capacity sit there and do nothing, they offer its services outside of the organization.
    • There are some constraints. If you are a government printer, say you are a state printer, you can only really offer those services to other government entities. If you are a corporate entity, you may be able to offer it to anybody that is out there. Very often, we find that in-plant organizations, say in a large office complex, may offer for-profit printing to other organizations that are located close to them. You do not want to completely turn into the local, walkup copy center, but it is an option. Sometimes those organizations become profitable enough that the company decides to take the in-plant and roll them out as a separate company.
    • [00:05:22] Ryan McAbee: If they do work outside of their organization, it is usually like kind. It is whatever they have gotten good at, whatever they have mastered;  they go look at other similar organizations that need that same kind of thing, whether it is other schools or other businesses. 
    • Pat, who are their primary customers? I guess that would depend on how the in-plant is set up. 
    • [00:05:41] Pat McGrew: If you are the in-plant for, say, Caterpillar tractor, your internal customers might be engineers, might be the marketing department, might be the invoicing department, billing and invoicing.
    • If you are in an educational in-plant, your constituents are everybody in the educational environment. It could be teachers and professors and teaching assistants, but it could also be students, right? Because an awful lot of printing of dissertations and theses often come to the in-plant shop.
    • In a corporation, every different department has specific printing needs. Many organizations have gotten away from desktop printers on everybody's desk because that is hard to manage - they try to centralize all the printing into an in-plant. Then you are printing for everybody, from the CEO almost to the janitor. You are doing their printing - whoever needs checklists, bills, statements, and invoices printed. They need marketing collateral printed. It is just everybody. 
    • [00:06:45] Ryan McAbee: The only real central rule you can apply is that usually their organization takes first priority, and then everybody else comes secondarily to some extent.
    • [00:06:56] Pat McGrew: Sometimes there is a hierarchy even within the organization. The CEO says he wants something or she wants something, they are definitely going to get it first. Often marketing will take a certain level in the hierarchy. If you are an organization that is doing billing statements - bringing the money in always wins. Then, general employee care things might be a little bit lower down on the rung. 
    • [00:07:19] Ryan McAbee: In terms of what in-plants print, it is going to vary among the three main types of in-plants that we discussed before.
    • If you are in an educational in-plant, you are probably not printing a whole lot of business cards, but you are probably printing a whole lot of course packets. It just depends on the use case of what your end users in the organization need. What do you see as any interesting things that in-plants have evolved into printing these days?
    • [00:07:46] Pat McGrew: We talked a little bit about how acquiring wide-format capabilities is something that we see a lot in general commercial printing. We also see it in in-plants. A lot more in-plants are capable of printing the signs - wayfinding signs, events, signs - all sorts of things that can help lift an event. Event-based printing. A lot of them have become very good at that. 
    • The other thing to remember is to look at a corporate in-plant doing proposals and reports, and pitch decks. Brokerages, insurance companies, and anyone who is selling into a business-to-business environment - pitch decks, and PowerPoints that you print,  are common print products. They go into binders. They have specific binding requirements, and they can be quite big. They can be 500 sheets, which is large when you think about a PowerPoint deck. A lot of those kinds of things are eight and a half by 11, A4 cut-sheet, but with drill binding to go into a binder or spiral binding. You see those in every kind of in-plant. 
    • [00:08:49] Ryan McAbee: You get up to 500 pages, and you are, that is annual report size. It is like an encyclopedic volume. 
    • [00:08:54] Pat McGrew: That is why some in-plants actually have perfect binding capabilities and glue binding capabilities if they do a lot of that kind of work. 
    • [00:09:02] Ryan McAbee: If this list looks familiar, if you have watched Inside of a commercial printer, it is because they often have a lot of the same equipment and capabilities. Depending upon the size of the in-plant, the actual equipment may be proportionate to the size that they are working with because they are working with different space requirements.
    • Especially, if you think about it in a corporate facility, because they are not in a detached building. You are usually in the basement of the corporate building, so they are limited in terms of space. They might just have smaller offset equipment, smaller or digital printing equipment, smaller wide-format equipment, and so on and so forth.
    • The capabilities are pretty similar in many cases. Then you get into the more specialized in-plants, then they do have a larger space to work in because it is required for the kind of roll-fed digital printing equipment that they often use in the transactional world.
    • [00:09:53] Pat McGrew: That is absolutely true. In those in-plants, you may also see mailing equipment, so inserters and the mail preparation equipment that helps them get it into the mail stream. The thing about an in-plant is that it is every kind of printing that you can imagine. A specific in-plant may not be able to do everything, but if you look across all of them, there is some in-plant somewhere in the world doing absolutely every kind of printing you can think of, up to and including 3D printing these days.
    • [00:10:24] Ryan McAbee: Or printing on 3D objects even. Absolutely. A pretty diverse set, but it may not be all contained in one single plant, as you said. What do you see as the challenges that they face, and what opportunities do they still have in the market when it comes to in-plant?
    • [00:10:40] Pat McGrew: Every in-plant department head, every in-plant owner, is constantly pressured by the people that they are doing work for to justify their existence as an in-plant versus taking everything out and outsourcing it. There is a balancing act that every in-plant manager goes through where they are balancing their equipment costs, their labor cost, their consumable costs, and their ability to deliver in the timeframes that the organization requires. 
    • Many of them do it exceedingly well, and they are able to justify it year-on-year. It is almost not even a question, but it is an easy justification. Others, over time, find that they do not have the capital to invest in faster or different types of equipment. At some point, the conversation is about taking all of the in-plant apart and actually outsourcing all that work to someone else. Sometimes there is a hybrid model where some work will go outside, and some work will stay inside. The challenge for any in-plant manager is that knife's edge that they walk on all the time. 
    • Everything else that you see on the list is part of what feeds into that pressure. Is my staff going to show up today? We always ask that question. I can remember 30 years ago asking that question. That is not just a current question. Do my users still need the things I can print, or have they moved on? Do they need different kinds of things that I am challenged with providing? 
    • In very large organizations, the temptation of departments is to go rogue and start sending things outside without even giving the in-plant an opportunity. - that is a management challenge that is faced not only by the in-plant manager, who has to become a marketer within the organization, but also with how the organization wants to handle those kinds of situations. It all feeds into budget cycles, deciding whether the money for printing will go into the in-plant or be made available for outside purchases. 
    • Many in-plants are tasked with being involved in RFP processes. That is a request for proposal, and it can come from both directions. The in-plant, when they want to make capital investments, will send a request for proposal out to the vendors in the industry that meet their brief. Then they have to justify what comes back to make an internal investment to update the in-plant. Departments within the in-plant served organization may also be sending RFPs out to other printing companies to decide whether they should print internally or externally.
    • The challenges are pretty massive. It is not for the faint of heart in any way.
    • [00:13:30] Ryan McAbee: That is what is always interesting as we work with in-plants. There is always this certain percentage of leakage, right? The leakage that the print that goes outside of the building that the in-plant does not even get an opportunity to work on. A lot of that is just education and awareness inside the organization because, so many times, they do not even know. Especially in corporate environments where there is a lot of headcount turnover in the entire organization. As part of that onboarding for new people coming in, you have to get in front of them and say, "Hey, look, we do have this service available, and here is the type of things that you can come to get from us." So many times that does not happen. That is definitely an opportunity, I think, to make sure that is ingrained in the culture and in the enterprise that you are working with so that you are the first to produce that work. 
    • Other things I think that are very critical to support the ongoing operation of in-plant is this insource versus outsource kind of thing. You have to know your data. You have to know what you are producing, the cost of that, and how that compares to going outside in the market to a general commercial printer. Being able to show you are justified in the operation of the in-plant because you are providing the value or that you are doing it at or better cost than what you can get in the market.
    • All of those things, I think, are the opportunities that I see for in-plants. Anything else You see, Pat, before we wrap it up? 
    • [00:14:47] Pat McGrew: The one thing we know about the most successful in-plants is that they are executive sponsored. The best way to have a healthy in-plant is to have someone in the C-suite who has responsibility, is aware of the capabilities, and is promoting the capabilities so that the investment is being used in the best possible way.
    • It is not unusual for the largest in-plants to be hybrid operations where they manage the arrangement with outside providers. Even if you are going to send something outside to a trade printer or a trade PSP, that still all goes through the in-plant management system so that they can keep an eye on and keep track of the real cost benefits of what work goes where. 
    • The opportunity to run a really amazing in-plant. We see this done every day, but every one of them is executive sponsored. 
    • [00:15:41] Ryan McAbee: Well said. We hope that you have learned a little bit more about how an in-plant print service provider operates, especially around those rules of three, in terms of the three main types and the three main operating models.
    •  We hope that you will join us for a future episode here at The Print University.

13- DIRECT MAIL PRINTERS

Direct mailers are constantly balancing the print and mailing demands of their customers while living with the requirements and limitations of their respective national postal systems, like the United States Postal Service (USPS). Get an introduction to how they successfully navigate both worlds.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Pat McGrew: Hi, I am Pat McGrew with McGrewGroup, and I am here with my colleague Ryan McAbee from Pixel Dot Consulting. This time our topic is Inside a Direct Mail Operation. So, Ryan, this is fun because direct mailers, they are commercial printers, but they have a whole lot of other things that come into play because they are dealing with a regulated product.
    • [00:00:28] Ryan McAbee: That is right. The key difference is that they are really reliant upon a third party - a regulated third party - which is the national postal system. In the US, it would be the US Postal Service. So, they are reliant upon them and also have to follow all the rules and regulations about how to transfer that printed product once they have it ready to go into the mail stream so that it then gets to the end user wherever it is going.
    • It is a little different setup in that regard, and there are definitely a lot more intricacies. The other thing that is a distinguishing factor for direct mail versus most of the other types of print service providers is the fact that the timing is a lot more critical, right? 
    • [00:01:05] Pat McGrew: It is. Direct mail is time sensitive. Somebody is putting direct mail, which is marketing communication, into the mail normally to support a campaign. They may have very specific drop dates that they require to be in the receiver's mailbox in order for that campaign really to be of any use. 
    • There are also styles of direct mail that are more generalized, where they do not go to a specific recipient the way, say, your catalog from Nordstrom or your LL Bean postcard might, but are instead more generalized. It is called Every Door Direct Mail, and the post office sponsors this in the US. There are similar programs around the world where a brand owner, somebody who wants to communicate with you, can deliver this communication to every mailbox in the ZIP code, right?
    • Direct mail comes in all sizes and shapes, postcards, catalogs, magalogs, direct mail, newspapers; it is everything. They have a lot of weird customers.
    • [00:02:06] Ryan McAbee: Some weird customers, huh? Do tell.
    • [00:02:08] Pat McGrew: It is everybody, right? So, political candidates are direct mailers. The people who run advocacy campaigns for associations or specific ballot initiatives are direct mail customers. Marketing departments of brand owners. Large and small local restaurants, local nail salons, barber shops, and the local tire supply place. The place that changes your oil. Absolutely everybody can be a customer of direct mail. 
    • [00:02:35] Ryan McAbee: That is true. It is pretty much anybody that needs to market, sell something or educate. Really that is organizations and other businesses. 
    • As you were saying, what was really interesting is that when we were talking about some other types of print service providers that do such a diverse mix of applications or printed products, this has it flipped on its head.
    • The product set gets smaller. There is diversity, still. There are different sizes of things like you said, and different products, but they get smaller. Then who they actually can serve or the customer that they are actually doing direct mail for gets much wider. It is just an interesting twist there.
    • [00:03:08] Pat McGrew: It absolutely is, and they print everything, right? Direct mail comes in so many different sizes, and shapes. They can be postcards that are folded in half and wafer tabbed. They can have complex cuts in them to make them really pretty when they come through the mail. They can be simple postcards. They can be catalogs. I mentioned magalogs, which is a catalog, but it has some advertorial content and maybe some articles that relate to the products that are being sold. 
    • It can be simple letter mail. Direct mail is also all of those mortgage refinance offers that you get that are just a simple sheet inside of an envelope that may not even be formatted particularly well, but that is also considered direct mail.
    • [00:03:52] Ryan McAbee: If you have a mailing address, you are familiar with these products. You probably have received about every variation that Pat just mentioned in your mailbox. It is because that is one of the most effective ways to still reach the end users - consumers. If you contrast it to electronic delivery, like email or some kind of targeted social marketing, you do not really know who you are reaching on the other end and where they are located. If you are doing, let's say Every Door Direct Mail, like what Pat mentioned before, you are reaching everybody in that ZIP code - they are absolutely getting a message.
    • [00:04:24] Pat McGrew: One of the other things to remember about all of these products is they involve address information. For all the direct mail that is sent to a specific person, that means that there is an address list. That address list is private data. Direct mailers not only have to be experts at printing, but they also have to be data experts. It is a little bit different kind of business.
    • That means that you need IT people, in addition to your great printing staff and your finishing staff, you need people who understand the technicalities of data in and out, and also mail regulations. Every single kind of product has a mailing specification that has to be hit for the USPS to accept it for mailing. The same is true in every country. All 190 countries have their own mailing specifications, so you have to be aware of them. That makes the equipment, which looks very much like the equipment that you will see in all of these modules, important. There is offset, there is digital, there is digital toner, digital inkjet, and some pretty common finishing equipment. But inserting and mailing equipment is something that becomes very important in a direct mail environment. The efficiency of that equipment is what allows you to hit what we call service level agreements - your agreement that this particular direct mail piece will be in somebody's mailbox at a specific time. 
    • [00:05:47] Ryan McAbee: If I were to isolate the differences between direct mailers versus other kinds of printers, it is the fact that on the print side, you have to have, at some point, some kind of digital printing component because that is what is going to do the variable addressing. At a minimum, if you are not also doing variable data of unique printing pieces that go to each consumer. That could be what was referred to as a white paper factory model, or you could also run it on a shell and overprint model. You do the long runs, maybe on the analog equipment, like offset press, and then you overprint it digitally for the parts that have to be unique.
    • We heard this term, white paper factory; you will hear it if you are in the industry for any length of time. How would you best describe that? 
    • [00:06:28] Pat McGrew: I would say that the thing to remember about a white paper factory is that it is exactly that. It begins with a white piece of paper, and the print file contains everything, including the logos and the lines and all the sort of templating information.
    • If you are running a white paper factory, you are running a very specific kind of workflow. It allows you to run lots of jobs and batch jobs back-to-back because you do not have to change the underlying paper - the preprinted shells. In the old days, we used to preprint shells on an offset machine, and then we would take that offset printed paper and put it into the digital device to put all the variable data into it. Over the years, we got smarter and created print files that contained all the information. What made that possible was the rise of full-color digital devices, right? Instead of just printing black, now they can print all the colors, and hit the logo colors, and that makes brand owners happy. It makes printers happy. 
    • Two things. If you are doing offset preprinted shells, and you are putting them into a machine, it is easy to make a mistake and load the wrong one and have to reprint the whole job because you printed the wrong paper. If you are in a white paper factory, that never happens. So, the white paper factory is the modern way of handling most direct mail. 
    • [00:07:51] Ryan McAbee: If you are in mailing as a direct mailer, you are going to have that inserting and mailing equipment to actually do those pieces after it has been printed. The other thing that may not be well known or thought of is that for direct mail, they often have to track these pieces, too. 
    • [00:08:07] Pat McGrew: Absolutely. It is absolutely in transactional printing and a lot of times in direct mail. The people who are doing the mailing, the brand owner, and the person who is buying the direct mail job, wants to know when it was inserted into the mail stream. When did it arrive at the mailbox? They are watching for the response to the piece, especially if there is a Call to Action on the direct mail piece. 
    • We have special codes that we work with the United States Postal Service on. It is the barcoding you see at the bottom of the address and most of the things that arrive in your mailbox. That is very trackable. It tells us when it gets inserted into the mail stream, how long it takes to get through the bulk mailing facility, how long it takes to get to the local carrier route, and then when it actually gets into your mailbox. 
    • [00:08:55] Ryan McAbee: It is always amazing. You go to your mailbox. You get your mail for the day, and you never really think about all that data that is on that barcode and all the complexity upstream that happened for you to get that.
    • [00:09:08] Pat McGrew: Absolutely true. So that brings us to the challenges because all of those things are challenges. You are dealing with a regulated entity, the USPS, that can change the postal rates when they want to. They can change dimensional characteristics on a year-to-year basis. In fact, they have just done that again. They have changed the regulated size for certain postcards and for certain envelopes. At the same time, they also try to give you back a little bit, and they run special promotions. Every year, USPS and most of the posts around the world run some sort of promotion to get people to use the mail.
    • The USPS is an interesting thing because they are not government and they are not private. They are quasi-government, so they do have to make their revenue every year. The revenue is very important to them. They want people to mail, and because they want people to mail, sometimes that takes encouragement. They run four or five special kinds of promotions each year. Sometimes to add a barcode to the outside or a QR code. Sometimes to add augmented reality to the outside of your envelope. There are all sorts of things that they do.
    • Then, of course, you have a customer who expects that mail to get into a mailbox at a very specific time, and that is the biggest challenge of all. 
    • [00:10:18] Ryan McAbee: What strikes me with direct mailers that is unique to their business model is that they are often as intimately aware of the national postal system as they are their own business. That is because they have to be. They are dependent upon them. 
    • We have some opportunities here too, Pat. Maybe it helps to explain a little bit about co-mingling, householding, and some of these other things. I think they speak to the efficiencies that a direct mailer can bring in terms of when they are working with clients, also from a cost perspective of reducing the spending.
    • [00:10:49] Pat McGrew: Comingling is funny. Comingling can be done either at the file level or at the physical mail piece level, and what you are doing is taking mailing files from multiple clients and merging them together to presort them by ZIP code to get the best bulk mailing rate, right? Mine might not be big enough, but if we put mine and yours together, we get a better discount. That is co-mingling. 
    • Householding is a little different. That is where you take mail pieces from multiple providers, and you actually bring them together into a single packet that gets delivered to a household.
    • Maybe an insurance company. I might have five lines of business with that insurance company between home and car and different things - boat, jet ski - and because of that, there is a lot of mail that comes to me. Because a lot of mail comes to me, they can household it into a single envelope instead of sending five envelopes to me every single month.
    • Those are important ways to keep the costs down from the mailing perspective. And we do it with direct mail marketing as well.
    • Address hygiene is important because undeliverable mail gets charged back to the mailer. We want to make sure that the addresses we have are clean. Typically, we do that through something called CASS certification, where we actually compare all the addresses in the file to a national database that the USPS maintains, and they let us know if something needs to be updated. 
    • Certainly, anything you can do in workflow and process automation to speed the handling, keep people's fingers out of the mail stream and make sure that everything is managed from an automated perspective, allows you to pass your audits.
    • Because you are dealing with data and you are dealing with regulated mail, you have to remember that occasionally your customers will want to come in and audit your process to make sure that it is as efficient and as safe from a data and privacy perspective as possible.
    • Ultimately, every single direct mailer I know has already or is in the process of expanding into being able to do other services. They do not all do the same services, but some of them are archiving. Some of them are also doing digital or SMS-based communication where they are doing multi-channel kinds of touchpoints.
    • The opportunities in direct mail are vast. 
    • [00:13:14] Ryan McAbee: Pat, one thing that is not on the presentation, but it is probably worth mentioning - we just do not see it as much in the US market, but definitely in other regions of the world - is hybrid mail. Do you want to explain just at a high level what that means if people hear it? 
    • [00:13:29] Pat McGrew: Hybrid mail means a lot of different things. That is part of the challenge of hybrid mail because some hybrid mail is part of a multi-channel campaign where there are digital and print components. 
    • Very often, we use the term hybrid mail when somebody who wants something mailed sends it to a central location where it is printed locally and delivered. Instead of it being printed and mailed long ways, it is considered maybe a little bit more sustainable approach because not as many trucks and things are involved in moving the mail around. If you can print closest to where it will be delivered, that is one of the hybrid mail solutions that is out there.
    • [00:14:11] Ryan McAbee: Perfect. Thanks, Pat, for sharing all that insight about direct mailers. I know you have worked with a bunch. And we hope that you learned something from this episode and will join us at a future one here at The Print University.

14- TRANSACTIONAL PRINTERS

Shh! It’s confidential. Learn why data and security are critical components for transactional printers based on their customer set, applications produced, and need to accurately deliver information.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Ryan McAbee: Hi there. Welcome to The Print University. This is Ryan McAbee with Pixel Dot Consulting, and of course, I have Pat McGrew from the McGrewGroup. Hello, Pat! 
    • [00:00:09] Pat McGrew: Hello there, Ryan. 
    • [00:00:11] Ryan McAbee: I know this is a topic near and dear to your heart. Let's talk about Inside a Transactional Printer. What are they? What do they look like? What does it smell like? All that good stuff. So how would you define a transactional printer? 
    • [00:00:24] Pat McGrew: I think the phrase masters of data manipulation and variable data printing - that first bullet there - really does it for me. One of the things that we know about transaction printers is that they are highly secure environments. They have to be because they are dealing with all of your personal, financial, and health data.
    • Every credit card statement that you get. Every claim check that you get from an insurance company. Every Explanation of Benefits you get from an insurance company. Your policies, the dec pages, and pretty much everything that defines your life on paper come through a transactional printer.
    • We want them to be highly secure environments. They are part IT specialists and part printing specialists. These are a group of people who typically specialize in high-volume printing. This is often the home of these very high-speed roll-fed printers, toner and inkjet. Some organizations are cut-sheet specialists. You do see some cut-sheet toner and inkjet.
    • There is a class of transaction printers that is on the smaller side. They exist to serve people who need that same kind of data secure variable data service, but might not be like Visa or MasterCard. There is a group of transaction printers who serve what we call the professional services market.
    • Think about law groups, right? Professional engineering groups and professional contracting groups have transaction needs that are not the same as what credit card providers, banks, credit unions, and insurance companies need. Nevertheless, they need transaction printers who are mailing specialists because the world of transaction printing involves putting things in an envelope and getting it in the mail.
    • Sometimes it is your traditional #10 envelope, but sometimes it is the larger size flat. But it is all going into the mail stream. It means that they have to be experts at knowing what is being printed, what envelope will it fit into, and then the cost of metering that they have to handle. What do they have to pay for that envelope? Then they have to be able to bill all of that back to their customer because postage is a pass-through charge.
    • It is a complex printing experience. It is a complex data management and security experience. It is also a complex invoicing experience for the company that is doing it. 
    • [00:02:53] Ryan McAbee: To sum it up, there are three main components of a transactional printer. You have the data specialist aspect, you have the printing aspect that is more technical as well, but then you have this whole thing of having to get it in the mail stream as well.
    • [00:03:09] Pat McGrew: There are regulatory issues at every one of those levels. You have all sorts of auditors who want to crawl all over you to make sure that you are doing it right. 
    • [00:03:19] Ryan McAbee: I know you mentioned a couple of customers and use cases. I tend to think of it, and maybe it is not holistic this way, as very large vertical enterprises that have a lot of consumers or customers as their base.
    • [00:03:31] Pat McGrew: That is not the wrong way to think of it. You think about financial services, which is everything from brokers and investment companies, wealth management, and retirement management - all very large organizations, as a rule. Dealing with classes of customers too. The same in healthcare. Your government communicates with you regularly. The IRS is a very large print output organization - transactional and other pieces. Your utilities and telecom. 
    • There is this sense that maybe transaction printing has died because everything is delivered online now. Your bills come to your email, or they come to your phone. Over the period from, say, 2000 to 2012 or so, we saw a dramatic decline in transaction printing. The reality is that since that time, for the last 10 years, it really has not declined very much. In some areas, it actually ticks up every once in a while because the more people live online, the less they want to deal with their bills - the bills that they need to understand - coming to them online. It is  harder for them to spend a day at work and then come home and look at their bills online, so the piece of paper is comforting. 
    • We find that about a third of consumers prefer paper only. About a third of consumers prefer both e-delivery and paper delivery. That is two-thirds of people who want paper. That is one of the reasons we think we have seen it flatten out in the decline.
    • It means that there are still billions of pages that are produced in the transaction space. They have a lot of regulations around how they get created, what is on them, and how fast they have to be in the mail stream from the time the billing cycle cuts off to the time that it lands in your mailbox. That is all regulated. It is very complex, and it is different for different segments. 
    • Print service providers who specialize in transaction often focus on specific verticals like financial or healthcare so they can be specialists in those regulations. There are a fair number out there who are multifaceted. They have team members who understand all the different requirements for all the different segments. It is a big business, and its customers are big. They are intense, and they are very likely to knock on your door at any time of the day or night and ask to come in and audit the work that you have done for them.
    • [00:05:46] Ryan McAbee: Yeah, it is a very fast-paced environment because the printer does not have much time to spare with these turnarounds by the time you get the data, you get it prepared to go in for the print, and then get it into the mail stream. If you have any disruption whatsoever in your production, it really cascades into a big problem.
    • [00:06:07] Pat McGrew: Transaction work typically comes off of, shall we say, not very modern software systems and information generation systems. What most print service providers who specialize in transaction will tell you is that pretty much every file that comes to them for print requires some repair before it goes into the print queue. There are those complications, as well. Transaction specialists are truly a unique group of very expert programming-level people. 
    • [00:06:36] Ryan McAbee: In terms of what they print, I think most people understand bills and statements because they get those in their home mailbox, and they understand what a check is, but maybe the term transpromo is not that familiar. How would you describe what that is? 
    • [00:06:49] Pat McGrew: Going back now 15 years, we had an idea in our industry that one of the ways to keep transaction mail in the mail stream, when we all thought it was going to go away, was that we could combine some of the marketing communication that was put into the envelopes.
    • You have probably done it with an envelope - you dump out all the stuff that is not your bill into the recycle, and then you read your bill. There was a sense that the way to get more eyeballs on that marketing communication was to actually print on the bill. As we went to white paper factories, which is where you are printing directly on big white rolls of paper and the print file contains all the logo information and all the templating information - as opposed to how we used to do it, which was pre-printed stock that had the logo and all the lines and everything on it - and you only put the variable information in. Now we can put all of that information into a file and shoot it onto white paper, and it allows us to do things like add marketing communication. We call it white space management. Oh, this person only had four transactions this month; there is an extra two inches there, so let's try to sell them something. 
    • That is what transpromo is. It was marrying marketing communication to the transaction document that we knew would be opened and read. It gets a bad reputation. There are people who say it never took off. Yet, every bill that I open has marketing communication on it.
    • Maybe the term waned. In practice, most organizations, if they are going to spend the money to print and communicate with you, they are going to try to upsell you. And that is what transpromo is. 
    • [00:08:23] Ryan McAbee: They have the cost anyway of having to get that piece to you. They might as well leverage it if there is that white space that they can utilize.
    • There is really not much downside to it. 
    • [00:08:33] Pat McGrew: There was a sense in the beginning that we might actually use the recipient's information to do more targeted marketing in a transpromo environment. I think we have not seen that happen as much. 
    • I do not necessarily want you to be marketing using the fact I just bought a blue shirt  - and would you love this blue jacket to go with it? If you want to just tell me that there is a sale on jackets, that is okay with me. It is not as personalized as we thought it might be by now, but there are a lot of reasons for that. 
    • [00:09:01] Ryan McAbee: What kinds of equipment mix and things may be unique to transactional printers? How do they differ from the other kinds of printers that we have been talking about?
    • [00:09:09] Pat McGrew: Typically, our equipment is going to be in secure facilities, so that is one thing. In some cases, the printing equipment itself is actually secure. One of the rules about handling personal health and personal financial data is that the data cannot rest on the printer in most cases. What you want is for it to be moving through from the digital front end to the marking engine and onto the paper and then go away, right? You do not want it to be saved in the printing environment. 
    • What you will find is that most transaction printers have secure print facilities where the printers actually have to be logged into. Very specifically, we have to know what operators are on what piece of equipment at what period of time. The rooms that the presses are in are actually also secure. In fact, even the front office, like the whole building, might need to be secured. 
    • There are different levels of security in terms of the technology. There are toner-based, electrophotography-based devices and inkjet-based devices. They are everywhere. Again, more likely today, it is going to be white paper factory-oriented, although there are still some people who are printing on pre-printed shells for various reasons. Sometimes that is a security issue. Sometimes it is a pre-printed shell because there is a hologram in the paper or there are watermarks in the paper, and they do not trust digital watermarks. Things like stock certificates are considered transactional print, but they are highly-regulated transactional print, and they have a lot of specialty print that goes along with it.
    • Generally, you are looking for security. We do not care what the device is as long as how it is printing and where it is printing is very secure. The other thing that we look at in our printing equipment is that there are requirements to be able to print very small type. If you are printing checks, one of the ways you secure checks is with something called micro printing, which is down to four-point or two-point. You need devices that are capable of print that will be readable down to that point size. It might take a magnifying glass, but your text needs to be readable down to that point. 
    • Some devices in the transaction space are what we call MICR-enabled, Magnetic Ink Character Recognition. Or you will hear people saying "m-i-c-k-e-r". It is that band of numbers across the bottom of your checks. For many decades the way those were read in the banks was they put them through a machine that could read the magnetic ink; if it did not read, they knew it was not a real check. That is not true anymore because an awful lot of checks do not use MICR. It is also used in direct mail for reading through envelopes. You can read the magnetic ink through the envelope. Some of these presses have very specific capabilities to print this very specific kind of ink or toner. 
    • All of it is designed to be cut and pushed into an envelope. I always think of it as being 8.5" x 11". But in fact, if you look at your own bills, you probably find that some of them are smaller. Some of them are actually very specifically smaller, so they can be printed three-up or four-up, or five-up across a roll, depending on the press involved. They can go into smaller envelopes, and all of that means the cost of printing is less. There are a lot of techniques that go into creating a transaction print job and costing that job. 
    • [00:12:29] Ryan McAbee: Yeah, that is true. Just to circle back on a couple of things. So micro text and MICR text sounds similar but are quite different.
    • Also, when we were talking about white paper factory versus pre-printed shells and over-printing, another way to think about that is that with a white paper factory, it is one process for printing, and in the other method, it is two processes - you are printing it two times, effectively. 
    • [00:12:50] Pat McGrew: You are touching it twice. We used to see, for many years, transaction printers who owned both the offset and the digital equipment so that they could capture all of that revenue. More and more, we see that they have sold those offset pieces because the white paper factory technique has become the most common.
    • [00:13:09] Ryan McAbee: Another thing that strikes me, too, from a finishing standpoint with transactional, is that there is an awful lot of perforating.
    • Every credit card statement and every bank statement is perforated at the bottom typically because it is a remittance form to physically mail a check to pay it.
    • [00:13:25] Pat McGrew: Some of those machines are really fancy. While maybe you still write checks and put the remittance into the envelope and put it into the mail to send back, I do not. Some very smart transaction people have put flags into the file to say, "Oh, Mrs. McGrew never sends us a check," so they do not put a reply envelope into the envelope and do not perf it because I do not need it. They do not even put a remittance slip on there. What they do is put some marketing on there instead.
    • In yours, because they know you are going to tear it off, it is going to have a business reply envelope, and the perfing is there. 
    • There is a lot of fancy workflow that goes on in the transaction space. 
    • [00:14:06] Ryan McAbee: What kind of challenges do they face, and what opportunities are there for transaction print? 
    • [00:14:12] Pat McGrew: The funny thing about being a printer in the transaction space is that there is no way that you are the master of your own ship. Not only do your customers have regulations that they are going to place on you in terms of their service level agreement - how fast they want things turned around - but so is the regulatory environment.
    • If you work at all in the healthcare industry, you are bound by HIPAA, which is the thing that allows us to go to any doctor and makes it possible to get our records easily. It also puts a lot of privacy requirements on anyone handling that data. 
    • Those regulations, which we think of as being static, actually are not. Whether you are in financial services, healthcare, or insurance, you are regulated at the federal level and at the state level. While this is true in the United States, it is also true in Canada, and it is true pretty much everywhere in the world - that transaction communication is highly regulated by multiple entities. In some cases, there can also be special interest groups that have a regulatory say in how the communication takes place. 
    • It is very tight turnarounds regulated by a whole group of people that you have no influence over. You just have to do whatever they say, and sometimes they do not give you a lot of notice.
    • If you look at your credit card statements, you should see a little box that says, “If you pay only the minimum, it will take you 57 years to pay off. If you pay this amount instead, you will pay it off in three years.” That is called a Schumer Box. That is from a piece of regulation that happened back in the early 2000s, and it mandated that people be told how long it was going to take to pay off their credit card debt.
    • There was a sense that people did not understand how long revolving credit could last in their life. That regulation and the requirement to get it onto the credit card bill - there was not a lot of time, and it caused untold heartache to transaction printers all over the US. All of a sudden, they had to rebuild templates. If they were still doing offset print, they had to remake all those templates. If they were doing white paper factory, they still had to remake those templates. They had to move things around so the Schumer Box would fit. It was a pretty massive event, and those things happen all the time in different industries. It is very rare that our governments understand the unintended consequences to printers that have to actually produce the work.
    • Lots of challenges in what we can do regarding security and privacy. Big issues. With that comes opportunities, and this is where transaction printers become amazing specialists. You will typically find that transaction printers can handle any file format you throw at them because it has all been thrown at them at some point in time. You will find that they are experts at balancing their environment. When to use inline finishing, right? Print, then directly into the cut, sheet, fold, perf, and into the envelope, versus doing nearline where the printer is separate from the finishing. 
    • They typically are the first to adopt automation processes because, for them, speed is what they sell. They have been very quick on the uptake at a lot of automation. Automated color management, and automated pre-flight - they have been very early adopters of that technology, and they were some of the first to expand services. 
    • Very often, they are the archiving entity for transaction print, which is, again, why they are secured. Security is so important. Their facilities have to be secure. They often do run their own servers. Some are moving to the cloud, but many of them are hybrid operations if they have not built their own on-premise security. There are a lot who have learned how to take a file and split it in real-time into eDelivery versus print delivery.
    • They are masters at being able to handle anything that comes at them.
    • [00:17:55] Ryan McAbee: One thing with the opportunities and uniqueness of what they really do well versus some of the other printers, I think, is also, they are really good at the flow of work. They are great at scheduling and basically getting things out the door on time. More so than even the other types of printers, like commercial printers.
    • [00:18:14] Pat McGrew: Their life depends on it, right? Transaction print is money. I have known many transaction printers who have said to me, “Basically, I print money. If these things do not go out in the mail, my client does not get paid.”
    • [00:18:26] Ryan McAbee: That is absolutely true. I have heard that comment as well.
    • With that, we thank you for joining this session to learn a little bit about transactional printers and what makes them unique, and how they function. We hope that you join us for the next episode in this series at The Print University.

15- PUBLICATION PRINTERS

Read all about it! Book printing is synonymous with publication printing but this module highlights that there are more facets to this segment of production printing.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Pat McGrew: Hi, welcome to The Print University, and I am Pat McGrew from McGrewGroup with my colleague Ryan McAbee from Pixel Dot Consulting. We are here to take you on a guided trip through being a publication printer, and publication printers are different, Ryan. 
    • [00:00:21] Ryan McAbee: They are. The thing that probably separates them, in my mind at least, and this is the generalization as we often have to do to draw the lines between how one printer is different from the other, is basically the volumes at which they typically print compared to others. Also, the fact that they get into all sorts of fun binding techniques because you have to take all those pages and somehow make it easy for us to carry around.
    • [00:00:46] Pat McGrew: If you think about books, they come in every size. I have books that are tiny, and then I have books that we call Coffee Table books. Frankly, some of them are desk size. Some of them are very thick. A lot of the art history and art books that we have on our shelves are giant.
    • They can be hardbound, case-bound books. They can be soft-cover books. They can be printed on things that feel like paper. Frankly, they can be printed on things that feel like Teslin® and plastic. Publications, in general, are pretty diverse things. It is not just books. It is magazines. It is catalogs. There are directories, magalogues, and Bibles, right? Bible printing is this whole thing unto itself because of the thinness of the paper. 
    • If you start to look at publication printing, it is an amazingly diverse set of products that are produced. There are some really tight quality requirements. If you are doing coffee table books that are Leonardo Da Vinci's works of his lifetime, you want it to be really precise and fine. If you are printing kids coloring books, it is a different quality requirement. For educational primers, and course packs you might have different print quality requirements than what you would have for a mass-market hardbound book. The latest bestseller they want to be really perfect, but by the time they get to the paperback edition, maybe they are not as picky.
    • There is every level of quality requirement and every level of monochrome and color requirement, and every requirement for binding variations. 
    • [00:02:17] Ryan McAbee: There is that spectrum that you are talking about, and I think it all relates to the use case of that product. If it is Leonard Da Vinci or a coffee table book, that is more like fine art, you want that detail. You want that color to be spot on. You want the imagery to be right. 
    • If it is nonfiction or fiction - a novel - it is more about readability. You want to be able to read the print because that is the primary purpose of it. Because of the use cases, I think that is also how you generally align what equipment you need and what kind of finishing you eventually need.
    • I know we mentioned a lot of different kinds of binding techniques in terms you may not be familiar with. We are not going to go in-depth in this particular episode. Be sure to check out our episode on binding techniques in the finishing realm. 
    • It is a little bit different customer base than other printers in my mind.
    • [00:03:06] Pat McGrew: Twenty years ago, you would have said that the customers are large publishing companies. Harcourt Brace & World was the publisher of all of our educational textbooks.
    • You had Bertelsmann and Hatchette, a well-known group of people, and they were who controlled pretty much all the book printing. Then there were people like Pearson who controlled all the educational printing or a lot of it, right? That was the world we all lived in.
    • But, a lot of things have changed in the last 20 years. So now we have a lot of what we call mid-tier and niche publishers. We have a lot of self-publishers. There is a term we used to use - we used to call it vanity publishing, which meant that I wrote a book and I needed copies for eight of my best friends, right?
    • That actually morphed into these self-publishing platforms. Today, anybody can be a book publisher, from a copy of one to a hundred. A lot of people who sell training services are their own publishers these days. They create their content, and they find someone to print it for them. 
    • There are photo books - they are books, right? And those are a platform unto themselves, right? How you create a photo book. Who prints a photo book? The equipment that they have. Customers are everybody. But the biggest publishing customers are still the major publishers. The people who produce your best sellers. The people who produce most of the educational print in the world. Those are still the big guys. They may print in-house. They may print with partners around the world. In fact, most of them do a little bit of both. 
    • Even Amazon is a publisher, right? We think of them as delivering everything. They began as a book retailer. Now they actually offer publishing services. I have used their publishing services, and they will publish everything from your graphic novel to your textbook to your work of fiction. Whatever it is you want to create, they actually have services that they offer. They offer them to individuals, but they offer them to mid-tier and niche organizations as well. A lot of religious publishers use Amazon services because it is wrapped up in a nice tight little ball, and they arrange to lodge it to make it available on the Amazon book pages, but also make it available through other networks.
    • Customers are everybody, and they come in every size, shape, and description.
    • [00:05:32] Ryan McAbee: I think that a good visual for that, just to show you the scale, how it ranges, is a photo book of one or a few, maybe, if you are giving away to a family of friends.
    • Then you have the opposite side of the spectrum through a large publishing company, something like a Harry Potter book, which is literally probably in the billions printed at this point. The opposite sides of the spectrum, but it can all be done by book publishers or publishing companies that do book printing.
    • We talked about books a lot already. What are some of the other interesting things that publication printers can also print? 
    • [00:06:04] Pat McGrew: Catalogs are a very specific thing because, typically, we print them on glossy paper. Most catalogs are printed on glossy paper, but also very lightweight paper. Most catalogs today still get printed on large analog devices that are really set up for it. 
    • Digital devices sometimes have a little bit more trouble with glossier papers and very lightweight glossy papers. Sometimes they find that it is a little bit more difficult to print those on digital devices. It is getting better, as I said. 
    • Catalogs are a very specific thing. They might be staple-bound, or they might be perfect-bound, depending on how big they are. I get one from a national office supply retailer that is about this thick and is pretty massive. 
    • There are also magazines, and again, magazines might be very small, very thin, with very few pages. They might be staple-bound or stitch-bound. The Vogue fall issue is an inch thick and pretty amazing. Again, very sensitive to print quality. Very sensitive to paper quality. Sensitive to the touch. Magazines are very specific, and they come in all genres, right?
    • They serve fashion. They serve government. They serve hobbyists. They serve everybody. The specifications are pretty wide-ranging.
    • Newspapers. Newspapers come in sizes. They typically print on something we think of as newsprint. We also see a lot of newspaper formats, things being printed on higher quality paper and used as direct mail newspapers or special event newspapers.
    • A client that I worked with eight or nine years ago was the national printer for newspapers in their country. Then they also had a side business printing newspapers for the local restaurants. They did a restaurant review kind of newspaper that they distributed.
    • The format of a newspaper can be used for a lot of different things. There are still schools doing school newspapers and colleges doing college newspapers. We were at the University of New Mexico recently and picked up the Daily Lobo. It is a daily printed newspaper.
    • [00:08:04] Ryan McAbee: That is the key there, Pat. I am sure some of you watching are going to be like - newspapers? What? That does not even exist. I have not gotten a newspaper. 
    • [00:08:10] Pat McGrew: Making a comeback.
    • [00:08:11] Ryan McAbee: It has also morphed and changed a little bit, right? You may not subscribe to your national newspaper, like USA Today or the New York Times. There are quite a lot that you can pick up in your local area that are done on a weekly or monthly basis. Just for things local to that market. 
    • [00:08:29] Pat McGrew: It is an interesting format, right? A lot of them are advertising-funded, and that is what makes them free. The other thing that is interesting is that when we do surveys of millennials and Gen Z and all these people we blame for things - they say that newspapers are something that they like because it is tangible. They can pick it up and carry it with them. It does not have a battery. There are a lot of reasons that newspapers go cyclical. It is a really interesting form, and people use it for advertising and direct mail marketing as well. 
    • Then periodicals, which are that kind of upscale version of magazines. Your educational journals and your academic journals. 
    • We will talk a little bit about how you print them. If it can print, it probably prints these types of things today. Most book printing is done by offset lithography. It is done everywhere in the world. There were a lot of years when a lot of book printing had moved to China because it could be done inexpensively. The mechanisms for shipping things to China and getting them back and getting them on the store shelves were pretty well handled.
    • In the last few years, some of that stuff that went offshore has come back to the US, and there is a pretty large movement right now to bring a lot of printing back - a lot of book printing back into the US. It is growing in different ways. There will always be large run offset print books. They will be with us forever.
    • Kind of like the stone tablets from Egypt that we can still read. A lot of that work is augmented with digital technology like digital toner and digital inkjet devices. An organization might not do the first run of a book on a digital device. If they get a reorder down the road that is not very large compared to the first run, it might go to a digital device.
    • It has been a great opportunity for organizations to open up what they call their back list. Books that have technically gone out of print, but might still be interesting to people. Our friends at Amazon have been responsible for some of that as well. Books that have been out of print for 20 years - a publisher can list them up there and find a whole new audience for them. This is an industry with a very long tail. 
    • Have you read Shakespeare? 
    • [00:10:46] Ryan McAbee: Not recently.
    • [00:10:48] Pat McGrew: Oddly, I just bought the Riverside Shakespeare for my father-in-law. All of a sudden, he developed a desire to reread Shakespeare, and I did not have one sitting around, so I bought a new copy.
    • [00:11:01] Ryan McAbee: That is the key here as we look across the printing output spectrum. It is really all about volume and right sizing and rationalizing it against the equipment. The thing that is interesting to me as we bring digital equipment into the marketplace is the demand curve; you can satisfy every part of that if you are a publisher and working with a publication printer.
    • As you are starting up, maybe you are uncertain of the demand that a certain title or book is going to have. You might start off with just a few copies, a few hundred, a few thousand. If it hits and it becomes a bestseller or something to that effect, the demand increases. Then you can move the output. In many cases, it is hard to distinguish the output at the end product for many people. You can move that to offset or the analog printing capabilities to get the volume. Then back as it goes into the long tail, where it is that onesie, twosie again. Not everyone is ordering Shakespeare like you are, but you could still get it because it can be produced digitally.
    • [00:11:55] Pat McGrew: Yeah, absolutely. Let's talk about the finishing side of it for a second. That is a pretty complex entity. There is a whole workflow that sits behind the scenes in getting from content to a file that can be printed. There is a whole set of processes in terms of designing book covers and deciding whether it is going to be softcover or casebound. The number of pages of a book also impacts how it can be bound. You are not going to use staples for 500 pages. You might not be using a perfect bind and gluing process for four pages. There are reasons that you pick each one. The decisions you make about the size of the book - the trimmed size of the book - whether it is going to have foldouts or not, right? You are going to have odd size pages. Whether you are going to be stitching it. If you are printing it digitally, you tend to print a book at a time. When you are printing on offset, you are printing the pages, and they have to be collated into the final book order. You can get the pages out of order if things do not go well.
    • So there are a lot of considerations, Ryan. 
    • [00:13:04] Ryan McAbee: You do not want to do that. You are right on the finishing side; what makes it unique is it is going to eventually be bound. Like Pat was saying, there are the best choices based on what the final product is supposed to look like. There could be multiple components too. If you have a hardcover book on your bookcase, it has several components, typically. It will have a dust cover jacket - a printed piece that wraps around the hardcover. Then the hardcover is a second process. It could also have printing on the spine to indicate the title of the book and so forth. I also have some books that have gold foil on the hardbound cover part. There are a lot of different techniques and finishing that can be used for books. 
    • Again, I will point you to our Finishing 101 to get some more explanation about these different kinds of finishing types. There are a lot of different finishing options that publication vendors can do. That leads us to the challenges that publication printers face. What do you think are some of the biggest challenges right now for that type of printer, Pat?
    • [00:14:01] Pat McGrew: Publication printing has been disrupted several times over the last two decades. It has been disrupted by the rise of Amazon. By the rise of “anybody can publish.” That has changed who is buying and what quantities they are buying in. 
    • At the same time, the number of publishers, the big publishers, has really consolidated. There are not as many global publishers as there were 20 years ago. They are controlling the number of titles in a unique way. They tend to go for titles that require really high-volume printing. They are partnering with presses around the world, and with printing companies around the world, to make sure that they can get their most attractive titles out everywhere they want to get them.
    • There is disruption at the publisher level, disruption at the who can be a publisher level, and disruption at the technology level. Again, 20 years ago, digital printing was not where we went for book printing or catalog printing or magazine printing or periodical printing or newspaper printing. 
    • Today I can point to printers around the world who are doing all of that work on digital devices. They have niche markets they are serving that make that work. If I am a publisher, I have to make a lot of new decisions I did not have to make 20 years ago or even 10 years ago when I am deciding how many copies I am going to print, what size I am going to print, what technology I find acceptable for printing. It is a lot more challenging than it was a decade or so ago. 
    • [00:15:40] Ryan McAbee: There is quite a complex chain - a  value chain, if you want to put that label on it - basically how a publication starts in terms of its content creation, its design aspect. How that gets into the hands of a publisher. Then how they start that process to basically end up in the production chain, to actually have it made and then get delivered wherever it is going. 
    • I feel like there has been a lot of effort put in to try and streamline that and connect that in a digital sense so that we can just be more efficient.
    • [00:16:12] Pat McGrew: There are a lot of interesting workflow solutions that have come to market in the last five to eight years.
    • We have workflow software from organizations that bridge from the publisher who has that content, to printing outlets. Basically, forming networks of printers. We have seen the rise of web-to-book. Taking files that might be created by the author, and they are making formatting decisions and sizing decisions themselves. Carry it all the way to being finished as a book and delivered back to them in a box. 
    • Companies like Blurb come to mind. You go on to their website, and you can use their online formatting tool to pour your text files into or write directly into it. Then they will return a physical proof copy back to you. Then you say, "yes, I will take 20,” or “I will take three." They are fine with that because their process is built for that. 
    • There are organizations that use a product called Piazza. There is another one called Bronte. I do not know why they all have Italian names, but they specialize in working with the largest book producers. Piazza really grew up in the education book market, linking publishers to printers. 
    • Bronte is more on the consumer-facing side. It basically serves bookstores that want to order backlists. There are a lot of different software solutions and product solutions that have come into this market that have changed the nature of what is available at any given time as a physically printed book.
    • [00:17:55] Ryan McAbee: That is not to say that the workflow and the software solutions inside a publication printer are not very similar to any other type of printer. But there are these kinds of unique applications for this space where we are trying to connect the bigger picture outside of the printing piece too.
    • [00:18:11] Pat McGrew: Think about catalogs. Catalogs are weird things to create and to print. You are talking about a lot of discrete information, right? You have the product. You have a SKU, a description, and maybe a price. It has a lot of data points. One of the companies I met with is a company called Priint, with two i's in the middle, Priint. What they have done is build a catalog builder right? That makes it easy for you to reach into your database of products and format it in an attractive way so you can produce the catalog the way you want. 
    • Those kinds of solutions are in the marketplace, and they have revolutionized what is possible in publishing too.
    • Somebody in that organization told me that it used to take two years to build a catalog. Today they have clients who can do it in a matter of a few weeks or months. Think about the difference that makes to the business in terms of being able to sell the current version of the products they are trying to sell, as opposed to what they had two years ago.
    • [00:19:12] Ryan McAbee: Or if you are in an industry where the product set changes quite frequently. Or you have a lot of products, to begin with. That all makes sense. Lots of evolution here in the publication printing space and the larger value chain that it supports.
    • We hope you have a better understanding of that market and hope to see you on the next episode at The Print University.

16- PACKAGING CONVERTERS

Packaging is part of everyday life, but how much thought have you given to the four primary types of packaging? Learn why we call them packaging converters instead of packaging printers, and what makes each type unique.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Pat McGrew: Hi, I am Pat McGrew. I am with my colleague Ryan McAbee. We are once again doing The Print University, and this time we are with you to talk about what goes on Inside a Packaging Converter. Ryan, thanks so much for jumping in with us. What is a packaging converter? 
    • [00:00:18] Ryan McAbee: It is best to start with that name. Why do we not call it a packaging printer? It is because they may or they may not even print, to be honest with you. A lot of corrugated converters, packaging converters that make boxes included, may not print but they all convert. At some point they take that flat material and convert it into a box or something else that has a 3D kind of shape to it. 
    • They really focus on what we call secondary and primary packaging. If you think about it like the picture that we see here with these shipping kinds of corrugated boxes, that would be a secondary material. It has the products that have packaging around the product inside of those to actually ship it and get it to the consumer or wherever it is being shipped.
    • The other thing with packaging converters, they tend to focus on one of the four primary types of packaging. You have corrugated, like the boxes we see here. You have flexible packaging. If you ever walk into a grocery store, you see a lot of these now because it is holding your laundry detergent or your sauces that you may cook with. It is basically a package you can pick up and squeeze and it will flex. Then you also have folding cartons. Those are used in many different ways to protect products. You see them in the grocery store too. The classic example is a breakfast cereal box. Then of course you have labels, which is a slightly different one.
    • You do not tend to think of them as having a 3D shape. But they could have a raised aspect. Those are the four primary areas. From your perspective, Pat, which ones do you find interesting these days? 
    • [00:01:48] Pat McGrew: It has been interesting to watch how the ability to digitally print on heavier substrates has impacted the whole packaging industry.
    • If you are looking at folding carton boxes, they are typically made of card stock. Your cereal box is a folding carton box. There are all sorts of things. Perfume comes in boxes. All sorts of things come in folding carton boxes.
    • It used to be that you had to print millions of them using analog processes. Today, there are just hundreds of companies out there happy to print your folding carton boxes in lots of 25 or 50 or a hundred and do it in beautiful color. They will print on the outside or on the inside.
    • That is one style of box that I am just in love with. I love the idea that every Etsy storefront can now, instead of having to put things in a brown kraft envelope, can send them out in a custom-made box that has their logo and branding on it. They can do it at a cost that is not remarkably different than that brown kraft envelope.
    • Not every requirement lends itself to being a folding carton with that kind of lighter-weight card stock. Sometimes you need corrugated, right? You need something that is a little bit heavier. We talk about corrugated mostly in terms of secondary packaging; the shipping packaging. But in fact, more and more we are starting to see it as the primary packaging as well - where it serves both functions because there are a number of organizations out there that are set up to print directly on corrugated. There are organizations that will custom print your corrugated box to the specifications that you provide. Some of them have pre-built templates. "Hi, we have these 13 kinds of boxes." You tell us what you want to put on it. Here is a template for you to put your design into and away you go. Others are set up where there is a little bit more manufacturing conversation involved, but these are all possible. 
    • [00:03:46] Ryan McAbee: That is one of the amazing trends that we have seen because of the equipment, because of the processes, and because of just the companies involved you had to really have a huge order in the thousands of pieces. Now we have come all the way downscale and you can order those 10, 20, 50 pieces. That is because we have more digital equipment and digitized equipment. We have more automation across the board.
    • One of the interesting things that we are seeing is companies pop up that make variable-size boxes in a single process. So one box to the next can be a completely different size and I think that is just amazing. 
    • [00:04:24] Pat McGrew: It is amazing. You can actually buy a bespoke pizza box printer that can sit in your pizza shop and print your boxes with your logo information on demand. That is how far downstream we have come. 
    • [00:04:37] Ryan McAbee: You want to walk us through, Pat, the four primary types of packaging? What to look out for and what makes them different or unique? 
    • [00:04:44] Pat McGrew: Every one of these has become more accessible. It has become almost more democratized in every area of packaging. 
    • On the top left, your flexible packaging is what you were describing earlier. It might hold your granola, your marine collagen. All sorts of things can come in those packages. They come in different sizes. The thing about them is that they have to be food safe. There is a lot of concern about what inks are being used to print on the outside. What the manufacturing process is. There are companies all over the world that are happy to do short run, flexible packaging for you these days and the coordinating labels for things like plastic bottles. It has a really interesting place in the industry. 
    • It is different from folding carton. Sometimes the same equipment can do both, but typically a device that will do folding carton almost looks more like a sheet-fed printer of some kind.
    • Folding carton boxes, if they are going to be used in the food industry, must use food-safe inks. That is a conversation that you have with the vendor. And designers have to be aware of where the folds are and where the cuts are. It looks really bad when the logo winds up hanging over the top of the box.
    • There are a lot of design considerations in folding carton because when you open that folding carton out, it has all sorts of interesting edges to it. So, that brings a design consideration.
    • The label industry is very interesting. People who have equipment that will also allow them to add watermarks and holograms to the labels are very much in demand because in the wine, and weirdly, the olive oil industry, there is a lot of counterfeiting.
    • Label counterfeiting is a big thing. We are watching organizations bring technology to the market that allows you to add specific security devices to the labels. You need to be able to print on a specific label substrate that has the adhesive back. That printing has to be pretty durable, because if you think about things like labels they have a tendency to rub together in shipment. You want highly durable labels and security is an issue. 
    • Corrugated is weird because, again, as I mentioned, sometimes it is primary packaging. Sometimes it is secondary packaging. All of it has print involved in some way, shape, or form. What you are seeing in this picture is those little symbols that are down towards the bottom of the boxes, those are actually regulated. The regulations vary by country for what you have to have but every secondary packaging box has to say where it was made and that it meets a certain set of regulations. They have custom stamps or custom printing that have to go on the outside of those boxes. 
    • Another facet of the world of digital coming to packaging is the ability to add coding, tracking, and marking to the outside of boxes so they can be easily scanned while they are in transit, because freight goes missing a lot. It does not just fall off the edge of ships in containers, which does happen occasionally. Sometimes it goes missing for malevolent reasons and the ability to track and trace those boxes during shipment is something that is of great benefit. Lots of different types of packaging, lots of different kinds of organizations that do them, and they tend to be specialists.
    • You do not tend to see secondary corrugated manufacturers doing flexible packaging. 
    • [00:08:15] Ryan McAbee: That is very true. The reason for that is because of economies of scale, right? You want to get very good at whatever the lines of manufacturing are that you have created. It is much more of a manufacturing line kind of process than you would have in a commercial printing environment. Because of that, there is also a pretty significant capital investment that you have to make for this equipment. It is a different way of looking at it from a business perspective. 
    • [00:08:38] Pat McGrew: It absolutely is. When you are talking about primary and secondary packaging, the thing to remember is that primary packaging can be highly regulated. In the food industry, in the supplements industry, any place where what is inside the package is going to be used by a consumer. That is pretty much most of it. You have a lot of regulations that you have to follow, so you have to be talking to your manufacturers about what inks are available. What they have been certified for. There are different rules in Europe than there are in the US and elsewhere in the world.
    • Primary packaging requires a lot of research to make sure you understand all your i's are dotted and t's are crossed. It is not quite the same if what you are putting into those flex packs are like bolts and nuts and nails, you do not have quite the same issues. Most of this is done for food packaging these days. 
    • That may change though, because as we are starting to look at more sustainable ways to deliver things that take up less shelf space, flexible packaging is highly prized for its ability to squish on shelves a little bit more easily.
    • Secondary packaging has been the realm of brown boxes for a very long time. More and more we are seeing organizations use those secondary boxes as billboards. We have been showing boxes, but these are also the same technologies used for pallet wraps. If you have ever been in a Costco or a Sam's, or a BJ's, and you have walked down the aisles, you may have seen big pallets sitting in the middle of the floor that you pick your stuff out of. It has a bunch of watermelons or it has a bunch of Mattel toys. Those pallet wraps are also done with corrugate. More and more we are seeing those printed as well being used as billboards, not just big white or big brown wraps. There is a lot of innovation in how to use corrugate and a lot of it is being driven by the ability to customize the printing on it.
    • You can print on sheets of corrugate, and in some cases, you can actually print on the material before the corrugate is made. You can print on what is the outside sheet and then put it through a corrugator so it comes out as a pre-printed box. The technologies and the innovations are just not stopping.
    • [00:10:49] Ryan McAbee: Those are very good points when you are talking about primary versus secondary packaging. Who are the customers for all these different primary verticals of packaging? Whether it has flex pack, folding carton, et cetera, et cetera.
    • [00:11:03] Pat McGrew: I like your french fries. Certainly, that is a folding carton solution. Agriculture is a huge user of packaging. Typically, when fruit and vegetables are gathered from the fields or from the trees, they are put very quickly into packaging in the field, right? Sometimes they go through a washing process, but they are very quickly put directly into packaging for transport to the farmer's markets and the grocery stores, where they are going to be sold.
    • Some innovative agricultural co-ops have actually begun to buy branded boxes so that the co-op brand is visible in the food stores and at the farmer's market. This is something you can do with digital printing because you are buying in small lots. It has been interesting to watch how innovation has changed. How these agricultural co-ops think of their own branding as they go to market.
    • Pretty much everybody else is there too. You can actually, as a consumer, buy custom made boxes. I have been the recipient of a box when somebody was having an anniversary celebration and they wanted everybody to have the same t-shirts to wear to the party. They custom ordered all the t-shirts and they custom ordered boxes so that everybody got a box that had all the pieces for the anniversary celebration. It was like 25 boxes, but it was very easy for them to order online. Even consumers can get in on it. 
    • Everybody else you see on the list - think about when you go into a store, and just start counting up the boxes that you see and the styles of boxes that you see.
    • Every medical office has not only pharmaceutical boxes for all the drugs and things that come in, but they have boxes of masks, boxes of booties, boxes of aprons and all sorts of stuff. 
    • Retailers. Have you ever been into a big box retailer at 11 o'clock at night? That is when they are stocking the shelves and there are boxes everywhere. It is simply how we transport things. 
    • [00:13:00] Ryan McAbee: Almost think of it in reverse, right? Think of it going into a retail store or going into a medical office and not having anything that is produced by a packaging converter. It would be like going back hundreds of years ago where you are pulling grain out of a bag or something.
    • [00:13:16] Pat McGrew: Yeah. It is a totally different experience. Think about sometimes you go into a co-op where they are selling bulks. Bulk grain or bulk seed or different kinds of nuts in bulk and it is in a big barrel. There are still several places we shop that have them in big barrels. That is all great, but I still have to get it home, and I am not going to carry it in my hand. What am I going to do? I am going to put it in a bag or I am going to put it in a box. 
    • [00:13:39] Ryan McAbee: Even on those displays that you might find today, they have labeling to tell you what it is and what the nutritional value is and all that sort of stuff.
    • [00:13:46] Pat McGrew: They may have little boxes there for you to put it in. They may have bags. They may have boxes. They may have flex pack things in there for you to put things into. 
    • [00:13:55] Ryan McAbee: We talked a lot about the four main categories and what that looks like. In addition to what we have already covered, is there convergence - is it secondary? Is it primary packaging on the corrugated side? There is this term called shelf-ready packaging. How would you best describe that? 
    • [00:14:13] Pat McGrew: It is the stuff that you see at Costco or Sam's or BJ's. That is my best description of it. When you go down the aisle and you can tell that they have taken the box that was delivered - it may have a perf in it so that you pull it off and now it is also the display.
    • We see it for everything like pouches of fish. A lot of flex pack goes into these shelf-ready packaging pieces because it is a nice combination. They work really well together. Candy bars, even boxes of cereal inside a shelf-ready pack that is on the shelf at the big box store.
    • It is also fruit. You will see fruit and vegetables delivered in shelf-ready packaging. In big box retail stores when it is the high season for buying, like the holidays, the toys are delivered in such a way that all they have to do is rip the front off and shove the box on the shelf to make it easier for them to merchandise. Shelf-ready is that hybrid space where it has the packaging that transports, but also the packaging that displays. 
    • [00:15:16] Ryan McAbee: Then on the label side, I just wanted to make a note here that there is more than one type of label. Probably the one that most people are familiar with is known as pressure-sensitive labels. That is the stuff that you peel off. You can stick it somewhere because it has an adhesive backing. Stickers are that way. Bumper stickers - that sort of thing. Everybody knows those.
    • Other ones that are less well-known are in-mold labels. You have seen them. I guarantee you have seen them. If you go to your grocery store and look at the laundry detergent, that laundry detergent probably has an in-mold label. It does not have a sticker that is applied separately. 
    • These different types of labels all have their uses and use cases. They also are produced in a slightly different way.
    • [00:15:56] Pat McGrew: Yeah and they are going to be printed. And then they are going to go through a cutting process to cut the waste away from the label face. What you can see on the "I voted" sticker would be the process used for that. It is, again, one of those things you have long talks with your vendor about.
    • You want to know who you are trying to sell labeling to or stickers to and you want to understand their use cases so that you pick the right substrates and the right technologies for printing and for cutting and converting. 
    • [00:16:25] Ryan McAbee: What does the equipment mix look like these days? I noticed that there are not too many analog representations. There is still a healthy set of analog equipment. There is this whole other side that is digital that has grown in variety. 
    • [00:16:38] Pat McGrew: Think about all the analog equipment in sort of the label space and in the sort of box printing space. It does not look remarkably different from commercial printing devices, right?
    • In the end, analog label printing devices are most often roll on one end, roll on the other end. There are also sheet printers that do print sheet labels. The technology is not too unusual. Digital print devices have gotten really interesting.
    • That one on the top, the EFI Nozomi, you need a large environment for that one. It is quite large. It has a sheet printer. So sheets are loaded on one side and then pushed out the other side. It prints on all manner of thicknesses from very thin to very thick corrugate. It is a very interesting device. It is giant and a big investment.
    • That AccurioLabel 190 you show here. It has become a really popular label printer because it has a fairly small footprint. Really easy to operate, really easy to understand. It is a great entry level device for people who are just adding label printing to their environment. We see it a lot in that kind of environment. 
    • Then there is that flexography thing. Then there are the hybrid devices. You have flexo machines that are using the flexo technology. Please see the Introduction to Flexography episode to understand more about how that works. 
    • Some of my favorite new label printing devices, and sometimes for packaging applications as well, are the ones that are hybrid. They do a certain part of the printing using flexo, or they may use pure analog offset, and then they have a digital module that sits on the end to allow them to customize. It might be a store location name. It might be some specific offer that is being made in a specific store. It might be putting people's names on labels, right? These devices come in all sizes, shapes, price ranges, and capabilities.
    • [00:18:34] Ryan McAbee: In many cases it is not one or the other between analog and digital. We see them coexisting in a lot of environments. That is because it gives additional flexibility to the packaging converter depending on the order and the quantities being ordered, you may need to flex one way or the other. Run some analog and then go back and do some other things digitally. 
    • When it comes to challenges and opportunities for packaging converters, what do we really see here?
    • [00:19:00] Pat McGrew: The challenge in this business is that there is a lot of innovation coming into the industry, so there is a lot of change. We have seen companies actually change their business mission based on innovations coming into their shop. One corrugate converting shop had their business prototyping corrugated boxes - You are a brand and you are not sure, do you want it this size? Do you want it this size? Do you want it this color? They specialized in very short run but they have been doing it with analog technology. Then they acquired some digital technology and found that they could turn their prototypes for the corrugated much faster. Then they became a short run corrugated producer because they found that there was a business helping customers do very short runs or to fill in large runs that did not quite come in at the right number. We were a hundred short for our delivery to Walmart. So these guys could do a hundred for them on a fast turnaround.
    • The value propositions in the packaging converting business are going in a lot of different directions right now. People who have been traditional - just get it out the door in high volume - are finding opportunities in customizing. People in the folding carton space are finding that with a bit of an upgrade in technology, they can serve a much wider market.
    • It is a very complex chain. To be in this business, you have to understand all your costs. It is your equipment costs, and your footprint. These machines tend to pull power. You want to understand your power costs. You want to understand venting requirements for wherever your business is based. 
    • You also want to understand who you are selling to. Some segments are commodity buyers - not a lot of money to be made. Others are more willing to pay higher value because of what is going into the package and those are good targets. 
    • All of those things are challenges to overcome, but they are all overcomeable because companies do it all the time.
    • [00:20:56] Ryan McAbee: Very good summary of some of the opportunities and challenges that we see in the market. It is one that is changing because of how much automation and digitization that has really happened in recent years and will continue to happen. 
    • With that, we hope that you have a good introduction to what packaging converters do and who they are.
    •  We hope to see you on the next episode at The Print University.

17- SIGN PRINTERS

Sign printers, often called wide format printers, are experts at combining materials and design to get the best results for sign placement. We review the most popular types of signage and the types of ink and equipment that produce them.

  • VIDEO TRANSCRIPTION

    • [00:00:00] Ryan McAbee: Hi there, and welcome to another edition at The Print University. Today we are going to be talking about Inside a Print Shop of a Sign printer, specifically. This is Ryan McAbee with Pixel Dot Consulting. Of course, I have Pat McGrew from McGrewGroup. Hello, Pat. 
    • [00:00:15] Pat McGrew: Hi there, Ryan. We are here to talk about the fun that you have when you are in the sign business.
    • [00:00:21] Ryan McAbee: That is right. It is a very dynamic business and a very interesting one from a production standpoint. How would you describe what a sign printer looks like and feels like, and does at a high level? 
    • [00:00:34] Pat McGrew: Sign printers come in all sizes and shapes, right? From small operations that focus on certain size signs that come off of roll-fed sign printers - wide-format printers - to organizations that do big flat signs. They do them on hard substrates - everything from corrugated to wood and glass, right? So they come in a lot of sizes and shapes. A lot of franchise printers do signs, but also a lot of sign printers are dedicated to the world of creating signs.
    • Signs come in sizes and shapes. It could be something that is in the grocery store window telling you about this week's sales. It could be the billboard that you see on the highway. The gas station, how much your gas will cost today signs, are all considered part of the same universe. 
    • We are actually focused on printed signs. Not the ones that are formed with thermoplastics and all the digital display billboards that are all pixels. What we are going to talk about are the things that come off of wide-format printers and are used to advertise companies, advertise sales. It does include everything up to and including vehicle wraps, which are rolling billboards, bus wraps, train wraps, and truck wraps, right? All of those things. 
    • For the most part, in this industry, we use digital printing technology to accomplish these kinds of signs. It is a very accessible technology. You can buy this equipment in any size, shape, and from any price range that you might have in mind.
    • It is an environment where you tend to buy signs in quantities of, say, one to 20. You do not typically buy tens of thousands unless you are a major retail chain. 
    • It is a big, diverse business, and it takes some understanding of the environments the signs will go into. Will they be indoors? Will they be outdoors? A little bit of understanding of ink chemistries. Are you going to print with UV and solvent inks? What are those characteristics? And you have to understand the substrates that you are going to be using. A diverse business. 
    • [00:02:43] Ryan McAbee: Yeah, they definitely have the most fun with materials of all the other types of printers because there are all different kinds of plastics. As you said, you could print on wood and metals. Definitely the fun of the substrate variety there.
    • I think it is important to also mention that there is an awful lot of vinyl lettering that happens with signs. We are also not talking about that because that is not really a printing process, but there is still a fair amount of that done too. Speaking of those things, who are the primary customers or target customers for a sign printer? 
    • [00:03:14] Pat McGrew: Certainly, retail uses signs all over the place. The things that hang from the ceilings of big box stores. Signs that you see when you walk in the door. Signs in the aisles. They might be mounted on stands. They might be hanging. They might be glued to a window. Signs are everywhere. 
    • And also medical offices. "Please cover your mouth when you cough." All the informational signs.
    • Restaurants have signs that have monthly specials and may be done in a sign format. We use it everywhere else too.
    • We use wayfinding signs. You go to an event, and you are trying to figure out where your ticket allows you to sit. There are probably signs there that say if you are in sections A through J, go left, and if you're in L through Z, go right. All those signs have to be printed and managed. 
    • Big brands use signage. They use it on vehicle wraps. They use it on bus buildings - the places that surround the seating. It might be on the seat backs at a bus stop. Those are all signs, and those are all printed on some kind of substrate. 
    • We all use signs too. We do not always think about it. "Hi, it is a girl. Hi, it is a boy." We go to the sign place, and we get them to make us a sign, and we stick it out in our yard.
    • Political season, oh my lord. Politicians, and social action causes everywhere. Yard signs are everywhere. Of course, real estate. You are not in the real estate industry if you do not have a friend who makes you signs. It is not only the stick-in-the-ground signs, but some of them are the big wooden signs that have things hanging from them. They come in all sizes and shapes. 
    • Then, of course, industrial and manufacturing. Hazardous material signs, safety protocol signs, "don't walk here" signs, and “look overhead because there are live wires” overhead signs. 
    • Signs are a part of our life, but they are part of the fabric of our lives in such a way that we do not always notice them. Even though that is what we are supposed to do.
    • [00:05:07] Ryan McAbee: I think that is particularly true in the industrial and manufacturing realm, right? Not the ones that the consumers see all the time. There is a lot of signage and labeling that goes on in those particular segments. We could have a whole separate long discussion about materials and their uses and all this kind of stuff. One thing to point out here with the industrial case is you do have to think about the material choice and maybe coatings or laminates because it has to withstand either abrasion or chemicals that it may come in contact with.
    • Just interesting diversity, I think, within the sign shops. This is just a drop in the bucket of the things that you can print as a sign printer. Some of my favorite things - obviously, everybody loves vehicle wraps because it is a visual thing. It is just so fun to watch them put on because it is a skill. I would never attempt it. 
    • [00:05:53] Pat McGrew: At trade shows, they often do vehicle wrapping races. Then they evaluate not just for how fast, but how clean all the edges are. It is pretty fascinating. 
    • [00:06:02] Ryan McAbee: They are experts at it. Then the other fun thing I love, too, is if you have gone into a fast food restaurant, at some point, you would have seen the printed display on the outside of the storefront advertising whatever promotion they are doing. But from the inside, it is see-through, so you do not really see out from the window clearly. I always think that is useful. 
    • [00:06:22] Pat McGrew: It is very specialized and, again, a very specialized substrate that you have to understand how to print and how to handle after printing. You have to understand its lifespan too.
    • [00:06:32] Ryan McAbee: For the applications here, Pat, particularly for signage, you mentioned indoor/outdoor kinds of applications and uses. It is the environmental conditions. We talked about it with the manufacturing of labels.  But the other thing that is really big with signage is if it is going to be outdoors. You really have to think about the UV exposure from the sunlight and fading, right? Because it has a shelf life. 
    • [00:06:53] Pat McGrew: You want to think about the substrates - signage substrates. They can be paper-based, but very often, they are vinyl-based, plastic, or film-based. They can also be textile-based. We have all seen the big feather signs sticking in the grass when we are driving around - "big sale today", "we are doing a car wash for charity" - all of these things. Every one of these substrates has a different handling requirement, and sign printers become experts at understanding what your need is, right? What the buyer's need is and trying to match the substrate to the needs. It will not fade immediately if it is going to be out in the sun. That it will be weather resistant if it is going to be outdoors. It will be able to stand up to traffic if it is in an indoor space. There are so many different considerations. And we are talking about signs, but for a lot of these people who buy sign equipment, a lot of the capabilities also exist for them to put substrates into those devices that also allow them to print labels. If you think about your "please be patient, student driver" sign pictured here -  That is a bumper sticker. You might not think of it as a sign. It is a sign and kind of a label. It is a little of both. It is printed on a substrate that has an adhesive backing on it, which requires a certain kind of handling. Fundamentally, a lot of people in the sign business also find that they can do jobs for customers who are doing labels as well.
    • [00:08:23] Ryan McAbee: That is an important point to lead into the equipment mix here. It is pretty diverse. You have things like what you are talking about to do the labels. You could even have a wide-format roll-fed device to put the adhesive backing material in that does the contour cutting in-line on the device. There is your label or your sticker.
    • Then you have these other kinds of inkjet-driven devices, which come in rolls only. So they print rolls. They can come in a cut sheet. Basically, you put your sheet of vinyl in there, and they print, or it could be more of a hybrid where they could do both depending on how you set up the equipment.
    • [00:08:53] Pat McGrew: We are showing some of the larger ones - the Durst and the VUTEk from EFI, but you can actually get them in much smaller formats that are a meter wide or a meter and a half wide that almost look like the kind of stand that you might put your duvet over. They are freestanding. They are not very wide. You put the roll of substrate behind them, and they come out on another roll in the front. You can get into those for $15,000 or $20,000 to start. You can grow your business all the way up into these larger things that can handle a wider array of substrates.
    • Some of these that we show as roll also have the capability of printing flat. They can take heavier substrates. They can take sheets of corrugated just like they do the rolls. Instead of it being roll-to-roll, it can just pass the flat material all the way through that is more rigid.
    • So some of them are really versatile.
    • [00:09:50] Ryan McAbee: That is true because you mentioned printing on metal and wood. You could print on a door with some of these devices because some of the head heights are even four inches. They can accommodate quite a thick material. It does not have to just be paper or a plastic. 
    • [00:10:02] Pat McGrew: It can be concrete. My favorite trade show demo was printing on a cinder block. They ran down to Home Depot and bought a cinder block. Brought it to the show and printed it live on the show floor. 
    • [00:10:15] Ryan McAbee: We have been talking a lot about the inkjet technology and the digital printing technology and the fact that it can come supersized or it can fit almost in your home if you wanted one. You probably could have one in your garage. There are also other printing technologies that can be used for sign printing as well. 
    • Offset lithography - you can do poster work there. Then another one that is still used is screen printing because it does have characteristics that hold up well to corrosion and other kinds of environmental weather. 
    • [00:10:43] Pat McGrew: A lot of those outdoor feather signs are done with screen printing, especially if they need vibrant colors or they're looking for neons or some silver. A lot of those are done with screen printing.
    • [00:10:53] Ryan McAbee: Lots of diversity there. We said that they have the most fun with materials of any of the printers. I think that is also true on the finishing end because there are just so many different things you can do with a sign based on how it is going to hang, where it is going to be placed, and all this kind of stuff.
    • What is your takeaway there? 
    • [00:11:09] Pat McGrew: It is cutters. Cutters come in all sizes and shapes. The one we are showing here, the Zünd D3, is set up to be programmed. You could do a straight cut; it is fine doing that. If you need something that is a bit more complex or you are trying to cut something out of the middle to allow light to shine through, a product like the Zünd table will allow you to do that. 
    • The other things in finishing that we have to think about are what is it going to take this printed thing and make it available to be a sign. We might need to coat it or laminate it in order to make it work in the environment that we want it to work in. If it is going to be hung up, it might need a gusset sewn at the top, so that you can put it on a pole. It might need grommets so that it can hang from hooks. 
    • Every one of those processes takes time and has a cost associated with it. One of the challenges of estimating sign jobs is making sure that you understand all of the finishing that you need. My favorite term is welding because, of course, my immediate thought goes to welding metal. We are actually talking about using heat to bring substrates together. That is how you get the magic of some of the really giant signs that are out in the wild. They have literally used heat to weld two pieces of substrate together to make it a larger piece. Again, specialized knowledge goes into being able to not only do the work but also to estimate the costs correctly.
    • [00:12:40] Ryan McAbee: Again, it is more of a primer introduction to the different inks because there is a bit more diversity here. You hear these ink types associated a lot with the equipment too. You hear, "That is a latex printer." "That is a UV printer." It is worth mentioning at least the big categories here.
    • [00:12:56] Pat McGrew: Aqueous -  not everybody understands aqueous is water-based. That is the aqua. That is where that comes from. So water-based dyes.
    • Think of it as a bucket of water that you pour some food coloring in. That is effectively how aqueous dye-based inks are made. I used to work for a manufacturer where we used to joke about the fact that our ink was 99.999% water and the rest was the color.
    • These water-based dyes that are used in wide-format printers are lovely because they are very easy to clean up. They do not carry a lot of hazardous waste issues. They are very easy to work with. They are very typically used in giant photo poster printing but also in design agency proofing. They use them a lot. The thing about a dye water-based ink is that sometimes you do not get the vibrance that you might really be striving for, especially in a brand situation. 
    • That is where you often see the turn towards solvents and ecosolvents. What we are talking about are inks that have a pretty heavy chemical base. The difference between a solvent and an ecosolvent is that ecosolvent is your new generation that has less volatile organic compounds. Think of it as they smell less. Because one of the things you will notice when you walk into a sign shop, typically is you will notice the smell. If they are printing with ecosolvent type inks or solvent-based inks that typically provide a more brilliant color gamut than water-based, dye-based ink. 
    • It is something when you are talking to your vendors, or you are trying to understand how to live with a device that is in your print shop; understanding whether you are dealing with aqueous or ecosolvent is really helpful.
    • [00:14:35] Ryan McAbee: The other thing to mention is that ecosolvents and solvents versus aqueous have a little bit broader substrate range. You can print on more materials.
    • Then compare that to latex. Knowing what you want to have printed is the domain of the sign printer to know how to do it. The solvents have that off-gassing aspect, so that chemistry is basically evaporating. You cannot immediately take that to a finishing process like laminating, because then you would get bubbles in the laminate. Whereas a latex device does not have to deal with that as much. Each one of these has its role in the universe here.
    • UV printing also does. UV formulations have come a long way in recent years, so they are more flexible. They do not crack as they used to in the past, and are very durable and long-lasting. 
    • [00:15:19] Pat McGrew: One thing, Ryan, we used the term cured there on that last slide. I want to make sure people understand when we talk about curing, we are using heat or light to help the ink harden basically. Not everyone understands that you have to wait for that curing process or you are not going to have a successful sign.
    • [00:15:38] Ryan McAbee: With any of these technologies, you are either waiting for something to evaporate the water in the ink or the solvent, or you are curing it and waiting for it to basically harden and be able to do something else with it.
    • Going into the kind of challenges and opportunities that we see for sign printers, Pat, I think it is just a dynamic area that has a lot of growth opportunities.
    • [00:15:59] Pat McGrew: Many organizations bring in a wide format device to augment other work that they are doing, whether it is book printing or document printing, or direct mail printing, because it is a very easy addition to an existing print shop.
    • It is also a very easy startup, right? We see an awful lot of startup sign shops, sometimes as part of a franchise, sometimes independently. Again, access to the equipment is there, but it does mean that there is a lot of competition. You have to understand what you are offering. You have to be able to articulate what you are offering. You have to have a just supreme understanding of your costs so that you can quote and estimate jobs in such a way that your sign shop actually makes money.
    • This is not a highly automated environment, so it can be labor-intensive. You have to think in terms of, am I going to be able to hire people who are going to be able to run the equipment for me when I need it to run? 
    • Finishing is often a pretty labor-intensive task too. Think about sewing the gussets onto designs that have to be hung. Putting grommets in. These are labor-intensive jobs, so it is every business challenge in printing wrapped up in one. Depending on what part of the sign industry you are trying to enter, it can be manageable. 
    • [00:17:17] Ryan McAbee: We tend to see less automation in these areas, but that is a growing trend for this segment that the vendors are really trying to focus on - bring software solutions, and bring automation to the equipment side as well. Those things are improving. 
    • The one thing that we did not really focus on because it is not really a printing aspect is the installation part component as well. You can print every sign in the world, but if it is a billboard or if it is outdoor signage, yeah, your customer may also want you to install those and physically put those up. That is a whole nother aspect to have to manage and figure out either to outsource it or do it yourself. 
    • [00:17:51] Pat McGrew: Many sign printers tell us that they begin by outsourcing that work. Whether you need a bucket truck or you need scaffolding. There are all sorts of different things that you might need. There are specialist installation companies out there, and you can use them until you feel that you are ready to start integrating those kinds of services into your business.
    • [00:18:10] Ryan McAbee: We like this space. We think it is a very dynamic space. Has lots of opportunities. Has some challenges, but any printing business does. We hope this gave you a good overview of what a sign printer looks like. 
    •  We hope to see you on the next episode at The Print University.

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