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| Distributors find high demand for promotional labels. A winery used these foil-stamped labels to mark bottles. Distributorship Inform Business Systems Inc., Millburg, Conn., provided the labels.
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When a Fortune 500 firm decided to
replace the printers at its nationwide distribution centers, it called Kathy
Dolphin, director of business development for RCM Data Corp. The Burr Ridge,
Ill., company sells printers as well as consumables such as labels. Dolphin
supplied two Kentek printers for each of the company's eight distribution
centers and its corporate headquarters--a great sale, or at least Dolphin
thought so, until eight months later.
"I started getting calls from the
distribution centers. All the printers were jamming," Dolphin says. "I was
getting yelled at by everybody." The Fortune 500 company relied on its Kentek
printers to personalize shipping labels. "For a distribution site, shipping
labels are mission-critical," Dolphin says. "I had to solve the problem."
Assuming the problem was
printer-related, Dolphin gathered information from all of the technicians who
service the 18 machines, which print 30 pages of cut sheet labels per minute.
But the problem remained a mystery, so Dolphin visited one of the distribution
centers. "I said, 'Show me everything you do. I want to watch the entire
printing process from beginning to end,'" she says.
The customer contact opened a pack of
labels, fanned them and placed them in the printer's input feeder. As Dolphin
watched the printing begin, the first few sheets of labels printed correctly.
Then she noticed something. The sheets of labels remaining in the feeder started
to curl. Suspicious that the labels were the real problem, Dolphin asked the
client to give her a few packs of them to take back to her office.
Dolphin stacked a pile of labels on her filing cabinet. "Inside of four hours, I had Noah's ark," she says. "The labels were bowing that badly." Dolphin checked the printer service contracts and discovered all of the problems originated in the input feeders. She contacted the customer's corporate office for information on the label supplier, but cutting through the red tape of getting answers from a large firm was too cumbersome. Dolphin sought her own solution: She called a label manufacturer, explained the problem and within 24 hours, received boxes of labels to test at three distribution sites.
"Within 48 hours, I got emails from those sites saying these were miracle labels," Dolphin says. The client bought a test stock for its corporate headquarters to validate the results, then ordered a full supply from RCM Data. Now the company provides the Fortune 500 firm with approximately 500,000 blank, 8-up, pressure sensitive labels every two and a half months. The client has started ordering other labels from Dolphin, including continuous and thermal labels.
Striking a Chord
U.S. printers shipped $5.9 billion worth of labels and wrappers in 2000, according to the Graphic Arts Information Network. And these printers made a nice profit. According to the "2000 PIA Ratios," the average profit rate (as a percentage of sales) for all printers was 3.23 percent. Label printers, however, averaged 4.85 percent.
Beyond data processing labels, distributors have many opportunities for label sales. Thermal transfer and direct thermal labels frequently are used for shipping, tracking and identification. Colorful prime labels are used by retailers to enhance their merchandise. The label market also is influenced by technology: One of the latest advances is smart labels, which rely on radio frequency identification (RFID) for automatic data capture. Smart labels include RFID transponder inlays that, unlike bar codes, users can read without line of sight and in any orientation. Smart labels are used for parcel tracking, product authentication, tickets, passes and more.
For creative distributors, the label market is wide open. Some sell innovative products, such as floor advertising labels. These labels, often oversized or in the shape of a foot, are placed at store entrances to attract customers to specific products. Other distributors sell niche products, such as golf club shaft labels. These custom labels, typically printed on metallic Mylar stock, are wrapped around the shafts of clubs to identify the owners. And many distributors market functional labels, such as wraparound labels. Imprinted or blank, the labels wrap around medical, educational and government charts or folders, allowing visibility whether opened or closed.
Singing the Blues
Labels can be sticky products to master because so many factors affect their success. Distributors and manufacturers must work together to select the right face stock, liner, adhesive and overall construction. They must consider the surface where the label will be applied (wood, glass, metal), the texture of the surface (cylindrical, rough, flat), the expected usage period (days, months, years), the temperature at application, the method of imprinting (ink jet, ion deposition, laser printer, handwritten) and so on.
In addition, label salespeople often must deal with unknowledgeable client contacts. Customers may not know how labels are used or may demand rush delivery, bypassing the critical testing phase. Distributors must talk to the labels' users, not just to the people who order printing. Distributors also should insist on handling label testing. Bending to demanding customers could cause disastrous results.
* Understand customers' true needs.
"Customers make assumptions about what they need," says Kathy Dolphin, director of business development for RCM Data Corp, a distributorship in Burr Ridge, Ill. "But you need to understand their real label requirements." One of Dolphin's customers, a large manufacturing firm, ordered direct thermal labels. When Dolphin studied the application--an 8 x 10-inch label--she suggested an alternative. Now the company orders laser labels, which are less expensive and can be personalized more rapidly.
* Understand the equipment.
Label printers have different feed mechanisms and paper paths than other printers. The equipment dictates label specifications. For example, Dolphin says, "Labels can be impacted by the paper path, and you don't want to spend all day peeling labels off a fuser" because you specified incompatible labels.
* Test the labels, then test some more.
One of Dolphin's customers ordered a month's supply--one million labels--for testing. "[The project] blew up," she says. "Nothing worked." The main issue was a stacking problem after the labels exited the customer's printer. "They looked like the Leaning Tower of Pisa," Dolphin says. Employees would bump into the uneven stack and knock them down. Dolphin contacted her label manufacturer, which in turn asked for help from its liner and face stock suppliers. After several weeks, they found a solution by adjusting the die cuts and producing the labels on a different press. Satisfied, the client ordered 2 million labels. "There will be problems, and you're going to be measured by your responsiveness to those problems," Dolphin says.
* Help clients use labels correctly.
Instead of simply delivering labels, show customers how to peel and apply them to avoid problems. If labels are peeled incorrectly, they may curl.
