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FULFILLMENT SERVICES -- Printers Getting Their Fill

June 2004

Technology Editor

Nothing breeds imitation like success, but it is possible for there to be too much of a good thing. And, timing really is everything.

Enough with the clichés. Such sayings suffer from overuse, though, because their wisdom resonates with people.

So what does that have to do with fulfillment? For some years now, "industry experts" have been advising printers of the need to diversify and offer value-added services in order to thrive. Given the number of companies that now proclaim they offer mailing and fulfillment, expanding into these services would seem to be the one true industry success story.

There is a danger that pointing to mailing and fulfillment as a business opportunity can itself become a cliché. By its "2002-2003 State of the Industry Report," the National Association for Printing Leadership (NAPL) was already reporting that 58.6 percent of survey respondents offered fulfillment services and 52.2 percent did mailing. The numbers jumped to 70.7 percent and 63.9 percent, respectively, when respondents were asked how many planned to be offering those services in 2004.

Still, widespread expansion into these services hasn't seemed to diminish assessments of their business potential. According to its current industry report, fulfillment was cited by the largest percentage (59.6 percent) of NAPL survey respondents as being one of the fastest growing "diversification" markets over the next two years, notes Andrew Paparozzi, chief economist. Mailing was cited by 47.7 percent as expected to be among the fastest growing markets.

Fulfillment and mailing services tend to go hand in hand, but also represent distinct services. Printers often start out offering one and then see a need or opportunity to add the other.

Those interested in more detailed information about the market for fulfillment services, specifically, should consider taking a look at the special section in the "2003-2004 NAPL State of the Industry Report" or the just published "NAPL Survey of Fulfillment Practices Report." The reports provide data such as the types of fulfillment services offered, average number of orders per week, amount of plant space devoted to the operation, and more. They also qualitatively explore the advantages and disadvantages of this diversification strategy.

Interest Is Growing

While NAPL has taken steps to make its survey sample representative of the industry and not just its membership, the argument sometime is made that association members tend to be industry leaders. The findings of a broader industry survey conducted last year by the TrendWatch Graphic Arts research firm seems to give some credence to that notion. It found that only 24 percent of printers saw "broadening fulfillment, shipping and mailing services" as a business opportunity in the next 12 months. However, the firm also noted that percentage was up sharply compared to past surveys.

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