Common Interest

Thanks Warren and Russ for your comments on my last entry. You both make good points, and the bottom line is that mills and printers have a common interest and a common problem. For the mills to push prices beyond what printers can pass on is shortsighted. For the printers to expect the mills to sustain losses year after year, effectively subsidizing printers, is also shortsighted.

So, how do we make the relationship cooperative rather than adversarial?

This story goes back 15 years or more. When I was a mill sales rep with Domtar, I often felt like the printers were the enemy. There was excess capacity. Prices were low, and falling. The mills were losing money, and taking downtime for lack of orders. Sometimes we would get an order, only to have the price renegotiated afterward or the order cancelled entirely when the printer, or maybe the merchant, would get a better price somewhere else.

This was frustrating.

Later, when I was in a marketing role, I had the opportunity to hear Don Gain of Harmony Printing in Toronto speak at an association meeting. Don outlined the problems that the print industry was facing: overcapacity, low prices and declining margins. This sounded all too familiar. I chatted with Don afterwards, and we agreed that mills and printers did in fact have a common problem and needed better communication.

Soon after, I created Domtar’s Printer Advisory Council and invited a number of printers, including Don, to get together once a year to discuss issues of common interest and help us become a better supplier.

No, we didn’t manage to solve the underlying problems, but we did improve communication and understanding.

So, where are we now? Print is declining, losing ground to printers in China and to electronic media. Are paper prices the reason? Part of the reason?

Jack Miller is founder and Principal Consultant at Market-Intell LLC, offering Need to Know™ market intelligence in paper, print and packaging. Previously, he was senior consultant, North America, with Pira International.

Known as the Paper Guru, Jack is the former director of Market Intelligence with Domtar, where he also held positions as regional sales manager, territory sales manager and product manager. He has presented at On Demand, RISI’s Global Outlook, PRIMIR, SustainCom World and at various IntertechPira conferences. Jack has written for Printing Impressions, Canadian Printer, Paper 360, PaperTree Letter and Package Printing, along with publishing a monthly e-newsletter, MarketIntellibits.

He holds a Bachelor of Arts degree in Economics from The College of the Holy Cross and has done graduate studies in Statistics and Finance.

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  • http://BobButkins Bob Butkins

    In a nutshell:
    Mills and printers should be partners but are really not. This goes back (for me) to the 70’s and 80’s when antitrust settlements gave printers millions from the mills (collusion, price fixing). Lack of Trust for 30+ years does not build partnerships.

    Printers do not dictate prices, the marketplace does. ex. Estimate totals $10,000 – but I have to figure out how to do the job for $8,000. Why? Clients have new and revolutionary alternatives: New Media(s).

    Major problem: As a printer, I have to always figure out ways of increasing output/revenue without increasing cost. Mills simply announce price increases, “anytime the sun flares and solar spots threaten the supply of titanium dioxide”. They have no credibility in the industry anymore. Without credibility, there can never be a true trusting relationship. Lastly, the mills print and lobby for the “Power of Print” and then make MAJOR strategic errors that drive ultimate consumers of print away from their product. That is the really insane part of raising prices. The elasticity of price, supply and demand rings even truer today. Rising prices = clients use alternative medias.