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What do I mean when I say leverage your assets? As printers, whether commercial or in-plant, you have machinery that you use to produce product for an end user. These are the assets I’m referring to. As to leveraging those assets, I don’t mean borrow money against them. I am talking about getting everything out of them you possibly can. I feel there are two basic types of assets in a print shop. Those which are the main drive shaft of the shop, and others which are used when needed to support the main devices. Offsets have been the main drive shaft asset for years, but digital print engines are catching up. Regardless of the technology, the same concepts of leverage apply. You need to fill the asset up with work and you want that work to be as profitable as possible.
Since 1974, my entire career has involved selling and servicing offset and bindery equipment. During that time, one thing has been a constant: people trying to get more out of a machine than they are meant to. “More” as in exceeding specifications for sheet size or thickness, modifying a machine to make a job work, and so on. This is done for one reason: to lock in, or get work which other people cannot do. When you are on a level playing field with your competitors equipment wise, anytime you can push the envelope you stand a much better chance of holding a higher profit margin. The more work done in this situation helps to leverage your asset with higher margin work. This fundamental principle of business has always been true and certainly still applies today.
To me the real winner of this game is the buyer who finds the device which is not well known, which has many built in capabilities beyond what the competition is using. What is gained by approaching business this way is the capabilities you get beyond what your competitors can modify or brainstorm their way into. This creates opportunity to fill the bandwidth of an asset or fully leverage it with work at a higher margin.
Focusing on how much it costs to operate an asset you are considering purchasing is valid and needs to be known and discussed. This one sided approach may scare you away before you know the whole story. I believe not enough attention is paid to leverage-ability of the asset being considered. What are the differences in this asset which might allow you to command higher margins? I think this applies more than ever to digital print. In a very short amount of time, digital print has become a commodity. There are a lot of print engines out there today capable of doing pretty much the same thing. When you have what everyone else has, what do you do to get work and hold margins? You talk about the value you add to your customer because of all of the other things you do for them. This helps and should buy you more price consideration than it usually does, but you still have to walk the price tightrope. This is where the buyer who buys with the eye to the different device and has the fortitude go where most people don’t, has the advantage.
This is a two sided coin. Having the “different device” is only half of the equation. You must take that different asset and figure out how to leverage it to the maximum at the highest margins. In my opinion, the holy grail is when you can compete with a given machine on a level playing field, but have extra capability. Now you have low risk. You are no worse off than if you buy the same machine everyone else has. Over time just keeping your eye open for the opportunities your device offers, you should be able to capitalize. The question comes down to which situation you feel is better: compete head to head, have a device that saves you a penny a click and fight the commodity game; Or, have a device that will compete in that world, but also offers many other capabilities which will allow you to be the only one that can even do the entire job.
Since 1984 MSL has been in the equipment business. In all of those years we have never had a machine to sell which offers this very type of opportunity, as strongly as the MGI Meteor Pro 8700 digital press does. We have always sold quality equipment which have advantages in production, labor savings and what we felt were the best value we could offer. We have been a dealer of this product since the middle of 2011. An old offset guy diving head first into the world of digital presses. This is what has really stuck in my mind over that time. We now have a product that can compete with all of the big players (Xerox, HP, Kodak) on their playing field. When you look deeper, the MGI 8700 offers a much larger sheet size, substrate capability, envelopes, digital and laminate safe output. Here is the ideal situation, a machine which competes with all of the other players on their playing field, but offers many capabilities none of them can even think of trying to do. If you have the 8700, when your competition sells your customer a 3 panel 8 1/2 x 11 tri-fold, you can counter with a 4 panel. You can do business cards, letterhead and full color envelopes which can all be re-run through any print device without worry of re-melt. You can offer up to a 40” back-lit polycarbonate product or vinyl, Teslin, canvas and many more possibilities. You don’t have to take advantage of any of those capabilities and the 8700 still competes on that level playing field with all of the big guys. This is where the low risk comes in. Head to head with everyone else, the 8700 competes and you can use the advantages you have to leverage this asset with the highest margin possible in a competitive market.
Yes, I am guilty of this article being an advertisement for the MGI Meteor Pro 8700. I felt compelled to write this because I feel this is the real message that needs to be communicated about this product. Being relatively new to selling digital presses, it has become very obvious people are searching for opportunity. We have that opportunity, we just need to get the message out.
By, Doug Barrett
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