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Dealers--More Than Middle Men

April 1999
The role of today's graphic arts distributors is changing. They're selling products, providing the training and consulting printers on what's available.


BY ERIK CAGLE


The popular, traditional image of a distributor is an entity that acts as a link between the manufacturer and the customer—the "go-between" or "middle man" who finds a market for products and services.

The commercial printing industry was no different. Just ask Joe Demharter, vice president of sales at Pitman Corp., one of the industry's largest dealers.

"Historically, if you look back at the role that distributors played for the manufacturers, basically we were the warehouses and credit arms," he says. "We provided those services, and they provided a strong organization of sales-focused representatives who went out, delivered their product messages in the marketplace and, in fact, created sales initiatives for companies."

Conditions started to change in dealer circles, as manufacturers began to downsize and lean on distributors to assume the role of selling products. Dealers, Demharter says, are not only structured to have salespeople with strong customer ties, they also have an infrastructure of specialists who work with customers in finding solutions.

"Printers have become more dependent on distributors to act as consultants," Demharter remarks. "Our role as a consultant in the marketplace has become extremely important, and I firmly believe that our greatest value-added to customers is our ability to provide an objective view of what's available to address their needs."

Peter Brehm, president and CEO of the North American Graphic Arts Suppliers Association (NAGASA), agrees that manufacturers are leaning on distributors more so than previously. Thus, commercial printers now know who to seek out.

"Printers are turning to dealers more and more as sources for information and process [conventional and digital] integration," Brehm says. "For example—What is the optimal fountain solution, plate and ink combination? Printers are looking for technical process integration support of conventional materials, and increasingly, they're turning toward dealers."

In regards to technical services, manufacturers not long ago boasted their own captive, in-house technical service and support organizations and infrastructures. According to Tech Services International President Tom Faughnan, manufacturers enjoyed relatively high margins in both their consumables and electronic imaging offerings.

When consumable margins began to tumble, and a groundswell was created by the bundling philosophy and competition to bring down electronic imaging pricing, the ability of manufacturers to sustain these technical services diminished.

The Evolution of TPP
"Thus, the evolution of the third-party service provider (TPP) . . . This evolution, while still very young and not yet universally accepted, is also changing the way service suppliers and manufacturers are dealing with printers," Faughnan explains. "TPPs that generally service more than one manufacturer's equipment can now provide support to multiple pieces of equipment at a site, making it easier for a printer to protect its equipment investment. Previously, the printer would need to deal with multiple manufacturers for technical and applications support; they need now only deal with one, making consistency of delivery and ownership possible."

 

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