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Seattle Bindery--Trade Binderies in a Bind?

September 1999

Milt Vine, president and CEO of Seattle Bindery, is often asked why he chose to acquire a trade bindery, particularly given his background as a CPA with one of the Big Five accounting firms. When he purchased a tabbing operation in 1991, and then a letterpress shop a few years later, folks pretty much fell silent on the subject, thinking Vine had some secret formula for success.

"Well, I don't," contends Vine. "I've just been around long enough to know that all the trends analysis in the world can't predict success. I also know that while some printing companies may, in fact, be bringing binderies in-house in the hopes of gaining greater customer share by providing a greater range of services, many others will continue to outsource. Both strategies have their advocates and detractors."

Vine's growth strategy for Seattle Bindery is a combination of both the outsource and all-under-one-roof philosophy. Citing Microsoft Corp. as an example of outsourcing in the extreme, Vine recalls that the company initially performed all R&D and production tasks in-house. Over time, Microsoft has migrated to a buy-out mentality, focusing only on R&D, now its core competency, and leaving implementation up to its acquired partners.

Vine believes Microsoft's arguments for outsourcing also apply to printing companies. Buying out bindery and other services:

  • Allows printers to concentrate on core competencies;

  • Frees up dollars for critical investments in front-end technologies;

  • Avoids bindery equipment expense and attendant headaches of finding skilled operators; and

  • Allows for greater scheduling flexibility and faster turnarounds, since specialized binderies have more equipment and, therefore, are better able to provide services.

"On the other side," says Vine, "as a business owner, I have to look at Seattle Bindery's options for growth: sell more services to our existing customers or expand our market share in bindery services. I've chosen to pursue both strategies."

The opportunity to acquire the tabbing operation appeared a few years after Vine purchased Seattle Bindery. According to Vine, the margins for this work are good, since the majority are custom jobs. It fit nicely into the company's other bindery offerings, and the deal included operators trained to run the equipment. Vine decided to drop the unprofitable mailing component of the bindery purchase and put those dollars toward the tabbing business.

Vine's more recent letterpress acquisition in 1997 was perhaps less tailor-made, but still made sense for Seattle Bindery. It would provide the company with a suite of complementary postpress services and, after Vine reviewed customer lists of both organizations, it was apparent there was already a high degree of crossover. This fact alone convinced Vine to add the letterpress services of diecutting, foil stamping, embossing (presentation folders) and numbering.


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