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EVP, Marketing at Specialty Print Communications

Against the Grain

By Dustin LeFebvre

About Dustin

A third-generation printer, Dustin LeFebvre delivers his vision for Specialty Print Communications as EVP, Marketing through strategy, planning and new product development. With a rich background ranging from sales and marketing to operations, quality control and procurement, Dustin takes a wide-angle approach to SPC

 

Directed-to-Buy Paper Rolls Over Printers

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I was asked to share the printer’s perspective in my “Against the Grain” blogs. So here’s my opinion on directed-to-buy paper programs: I hate them.

Given the options of directed-to-buy, customer-furnished stock, and supplying stock from your own vendor, would any printer ever choose the directed-to buy option?

In fact, why does directed-to-buy exist? I bet it exists because some consultant, back in the day, decided that this would be a great way for end-users to ensure consistency of product while skirting the responsibility for buying the stock themselves. Those were probably the same geniuses who prohibited printers from marking up the paper.

Yep, break it out, don’t mark it up, and get paid in 70 days (80 days after you receive the paper, perhaps 100 if the client pushes the schedule back). Do you ever feel like a really underperforming, interest-free bank?

Don’t get me wrong—I’ll work through the necessary channels and follow directions given by end-users. I’ll adapt our processes to serve customers’ needs—up to a point. Heck, some of these programs actually deliver on their promise of ensuring brand standards and consistency; I can get behind that. A few of them are even run well.

The Sprint account, in particular, runs like clockwork. The paper merchant knows who will be calling, what they need, and when they need it; they’ve already done the work before you pick up the phone. They’ve been expecting your call, they have the info, and they just need a confirming PO. That’s real value!

But that’s the exception to the rule, and for many reasons.

How do you like dealing with 15 different merchants in different cities, all for different end-user accounts? Have you developed solid relationships with all of them? How about all the stop-off charges you pay because your orders are no longer ganged together through a common merchant? So much for the efficiency in your supply chain. So much for mutual benefits.

Do you have confidence that they’re going to take care of you, or do you feel like you’re liable to be thrown under the bus at the drop of a hat so the unknown, out-of-town merchant can protect itself with the “real customer”—the end-user.

And if you are the red-headed stepchild of this twisted arrangement, what happens when the paper arrives out-of-spec or doesn’t run and you have to file a claim with the mill? Don’t worry about who is issuing the purchase orders and writing the checks, you’re NOT the customer. And consequently, you lack the leverage to facilitate a fair resolution.

As for the “real customers,” their deals are so much better than yours that the merchant needs to put an extra $6/cwt on top to obfuscate the “real” price. Because mill tolerances are +/- 3 percent, you can count on payingmore rather than less. And remember, no marking this up to compensate for the time value of your money.

Then, what happens when you’ve finished that job and you have a roll-and-a-half remaining? Will the merchant pick it up, or even refund the $6/cwt premium? Nope, that’s now yours, and it’s your most expensive inventory!

Good luck using it, because you normally use Mill Y and the this stock came from Mill X. Your products won’t match, so maybe you can makeready on your most expensive inventory to burn it up. When I say “it,” of course I mean “your money.”

End-users: If you want control over the paper you consume, please supply it yourselves, or simply specify what you want to a reputable and trusted vendor partner. Heck, you can even come check the labels and join us for a beer at Shotzee’s between press forms.

And merchants: If you’re going to sell directed-to-buy programs, and if we printers need to accept them, why not make them pleasant, easy and—here’s a thought—profitable for all? Why not do what the folks in Olathe, KS, do on the Sprint account and be proactive about it. Add some value.

After all, do I really need to “hate” these programs?
 

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