[INTRODUCTION]
[0:00:05.0] DC: This is the true story of two printers who agreed to podcast with me and have their opinions recorded. Listen to what happens when printers stop being polite and start getting real.
[0:00:13.5] JM: Hi, this is Jamie McLennan.
[0:00:15.0] WC: And this is William Crabtree.
[0:00:16.3] DC: And I’m your host, Deborah Corn. Welcome to the PrinterChat Podcast.
[INTERVIEW]
[0:00:26.3] DC: Hey everybody, welcome to Podcast From The Printerverse, this is Deborah Corn, your Intergalactic Ambassador. We are here with the PrinterChat Podcast, which means Will the Printer and Jamie the Printer are here with me. Hello, gentlemen.
[0:00:39.9] WC: Hello, Deborah.
[0:00:40.7] JM: Deborah, how are you doing? Hey Will.
[0:00:43.1] DC: Hello, William.
[0:00:44.4] WC: What’s up, Jamie?
[0:00:44.6] DC: Hello Jamie.
[0:00:45.9] WC: How are you?
[0:00:46.6] JM: Doing good.
[0:00:48.1] DC: I love that hello. It has been a while, gentlemen, let’s do our catch-up before we start. William, let’s start with you.
[0:00:56.2] WC: I don’t even know where I left off the last time we did catch up.
[0:00:59.8] DC: You had just sold your building, it was the easiest sale you had ever made. You were doing some wide format work at Tampa, and you were loosely teasing us about a new business venture that you want and on.
[0:01:18.6] WC: Yeah, I – well, the software, which we’ll talk about, we’re going to talk about the software today. Things are chill, I am not chasing work. I’m enjoying doing the estimates for the clients that I have, and the contracts that I have, which is enough to keep things status quo and low staff, and low overhead and I’ve come to the realization that I own all of the equipment in my building at this point, except for my digital presses, copiers, what do you even call them, my digital – my digital printers, which are on click rates and maintenance contracts. So, things are very easy. I have my first –
[0:01:56.3] DC: He’s low-riding again in his chair, Jamie.
[0:01:58.3] WC: I’m low riding, low riding a little bit. I have my first speaking event that’s not printing related, this year, July 23rd, I am speaking for Madi’s Movement, which is an organization that helps state; they actually have a group home, and they help foster kids, kind of age out of foster care.
[0:02:19.2] DC: That’s amazing, William.
[0:02:20.8] WC: Since I was a foster kid, I – you know, it hits home. So, I’m speaking at their event. The event is like a trade show where they are basically being taught how to go to a job interview, and how to write a resume, and how to carry themselves. So, I’m speaking at that event, I’m there all day, kind of doing and participating, I don’t know the whole itinerary. So, I’m super excited about that, which is interesting because there was – when we were at ISA, there was a big dialogue about people coming into this industry, and how that there isn’t a lot of avenues.
There’s no trade schools to be a pressman, there’s not a lot of resources for us to bring people into this industry. So, I’m kind of looking at it in two different ways of like, I get to go out and speak and help motivate and hopefully, give a good message to kids that are aging out of foster care that like, you can be successful and then, also, like maybe printing industry might not be a bad place for you to look.
[0:03:18.3] DC: I love it. Just a little idea, maybe there is some support to get them business cards or something like that? Nothing makes somebody feel more legitimate in that situation than having a business card. So, just a thought.
[0:03:32.7] WC: I just had the first meeting with them last week, they’ve invited me to come and speak, and we’re sponsoring another event that they’re doing, and so the dialogue is going. It’s going to come up pretty quick, and I already offered to, like, they’ve got like a passport thing that they have to do, and I already said, “Look, whatever you guys need for the event, we’ll print it.” But I really like that idea of maybe like, making vouchers for them to come and get a business card, but they actually have to come to the shop, and they have to like –
[0:03:55.6] DC: I love it.
[0:03:56.2] WC: Go through the design, they have to go through the process of getting a business card.
[0:03:58.3] DC: I love it.
[0:03:59.9] WC: But like, we’ll pass out vouchers, and that’s like, another added thing that we can do.
[0:04:03.2] DC: I absolutely love it. William, thank you so much for doing good in the world.
[0:04:08.0] WC: I do my best.
[0:04:09.1] DC: You do, you really do. I’m very proud of you, and I’m very proud to know you. All right, Jamie, let’s catch up with you, and you have a – you have a big announcement, you have a name change going on there, or an update.
[0:04:21.6] JM: Yes – yes, lots going on in my world, I’m not as fun as William’s, which is very cool, we have spoken about that before and I’m glad to see that come around and that you’re taking the lead and doing that, that’s very awesome. At the DMR Innvoke world, DMR is now becoming Innvoke. So, the DMR name will disappear; we are all under the umbrella of the Innvoke umbrella.
So, now, everything’s just getting rebranded as Innvoke. It’s been two and a half years since Innvoke bought us. So, Innvoke, Cranberry, New Jersey, Innvoke Conshohocken in Pennsylvania, and Innvoke Georgia, which is Woodstock, Georgia. I keep forgetting, it’s Woodstock.
[0:04:59.4] WC: How did you forget Woodstock, bro?
[0:05:00.8] JM: It’s the Woodstock, New York, I keep wanting to say, not to –
[0:05:05.3] DC: And that’s the label, that’s the label shop, right?
[0:05:07.5] JM: That’s the label shop down in Georgia, yes. So, that’s pretty cool; everything is getting rebranded. They have some measurements down there, we’re printing window graphics and all that fun stuff further down there, which is kind of our new carpets here. We’re here, we’re getting new graphics for the windows and doors, and some of the stuff, interior. So, that’s all getting designed.
So, that’s awesome and fun, and Ian Harker is loving doing that because he likes doing that. So, it takes him out of his pre-press range for a little while. He gets to put his design hat back on, so which is cool. Last time we spoke, I believe we had talked about going to the Brooklyn Print Fair.
[0:05:41.3] DC: Oh yeah.
[0:05:42.6] JM: It was amazing. We had four days up in Brooklyn New York, where it was a show for artists and small printers that did, like, hand screen printing and wood block printing in that and they were selling prints from anywhere from a couple of hundred dollars to thousands and thousands of dollars, and we were the one to sponsors. So, it was very cool, and we got to meet a lot of people.
I think they had an overwhelming amount of there for three days, it was Thursday night, then it was Friday, Saturday, and Sunday. Something like 5,000 people a day came through, based on their numbers, a couple, one day was like 7,000. I know I ran out of business cards, I think I ran out of everything, giving stuff out. It was kind of amazing. So, we actually had an open house here at Innvoke Conshohocken for the artists.
So, we gave him a pamphlet and said, “Hey, if you want to, come here, we’ll print a piece of your art to show us what we can do on our equipment. We can add embellishments, fluorescence, and whatever.” So, we had one artist actually come, two artists came down, everybody else sent it online. So, we printed it, we did some video, took some photos, posted it to their Instagram page.
So, we had about 25 artists, which was pretty cool. So, we did it on a Friday afternoon, which was kind of neat, and that was really cool, and then we got a couple other. We got probably, you know, about eight more jobs from artists saying, “We want to do this, we want to do that,” and it led into a bunch of other things. We got this big wall mural at the Philadelphia airport, based on another artist that seen stuff that we’ve done.
So, this big fluorescent wall mural, so if you’re in Gate D, walking through there, you’ll see a wall mural, Philly, that a local artist did of like, detail market, which is pretty neat, and yeah. So, it was a crazy April and May, and then our good deed is we do our internship. It starts next week or on Monday, we got an intern starting, and then actually, Monday, the June 2nd, we have four new people starting.
We have an intern starting here in Conshohocken, and then we have one of our interns from last year, accepted a job. So, she’s a CSR in our New Jersey plant, she’s going to be doing a bunch of work there, CSR and a couple of other things we’ve got planned for her, which is really cool, she’s great. Her name is Abby, and then we have two new salespeople starting that just graduated from RIT.
We met them at an RIT open house there, they came down for a tour, we gave them a proposal where they’re going to kind of work together as a team, new sales people, they’re in the packaging and graphics world and roll, and label world, that they studied that RIT. So, they start Monday as well, so we’re going to have our hands full with four new people, training them, all kinds of stuff. So, yeah, it would be interesting to report on what happens in our next podcast, so.
[SPONSOR MESSAGE]
[0:08:25.4] DC: DC: Girls Who Print provides women in print and graphic communications with information, resources, events, and mentorship to help them navigate their careers and the industry. As the largest independent network of women in print and a nonprofit organization, our global mission to provide resources, skill-building, education, and support for women to lead, inspire, and empower has never been stronger or more accessible. Through our member platform and program, as well as regional groups forming around the world, your access to Girls Who Print is just a click away. Gentlemen, you are most welcome to join us as allies. Get involved and get empowered today. Link in the show notes.
[INTERVIEW CONTINUED]
[0:09:11.7] DC: That’s amazing, Jamie. I’m so proud of you, and I love that you got some people who go from Brooklyn to down there in New Jersey, where you are, that’s pretty cool. What have I been doing? Girls Who Print stuff, mostly. I have – we launched Girls Who Print Europe at FESPA, which is an incredible event. There was – I’ve never been supported more at an event, or by an organization, than I was by FESPA.
So, shout out to Neil and Michael and every – and Sara and everybody from FESPA who just did it up for Girls Who Print in such an incredible way. Our event was standing room only. I ran out of buttons, of course, we had – I didn’t even know how many we had. It was a 500, 600, 800, somewhere around there, and then was at DSCOOP. Girls Who Print had an event there, too. DSCOOP is supporting us, we did a gameshow, it was a lot of fun.
I mixed stats and facts about women in the workplace with trivia about DSCOOP, and then, we had the Ferris University students ask printing questions. So – and they stumped everybody with one question, so it was pretty cool, and Jamie, I want to remind you because you are a sponsor of Girls Who Print, all of your new team members and current team members can join Girls Who Print for only 25 bucks, and it’s open to guys too.
[0:10:31.5] JM: We will have them signed up. We need some –
[0:10:33.8] DC: Okay, excellent. Yeah, no, they’re not, only two people have signed up from your company. So, we – you have to – did you know – well, just have to, “Did you know” them, and then, you know? “Did you know? Did you know you could join Girls Who Print for only 25 bucks?” And that goes for all of our sponsors out there. So, it was back-to-back-to-back events, and now, I’m back focusing on regular work here.
I have been doing this AI series, webinars. My God, they are popular, and it’s basic things. Like, literally, how to use AI, which tools should I use, and what do they do is the first webinar that we had, and this week, the webinar is about the, creating prompts for what you need, and our last webinar is going to be about how to implement it into your business, and this is not AI for like, technical people. This is like AI for Deborah, you know?
I’m having this webinar so I can learn how to do it with everybody else, and I had no idea, half the things that these tools could do. Like, Will was just telling me before the podcast started that there’s probably tools that could help me release this podcast and things like that. So, I’m going to look into them. But today, we are turning our focus on tariffs. I know, we’re back again with tariffs. So, I have some things to say before we start our podcast.
The current president announced, and in some cases, implemented as series of steep tariffs on our global trading partners. These, often on tariffs and shifting tariff rate announcements, have led to a tightening and shifting of the global supply chain, fear in the stock and bond markets, the impending threat of a recession, and increased cost for essential materials and equipment, specifically, materials, supplies and equipment sent from China, where tariffs are a moving target between 25 and 145% as of today.
Price increases and supply chain disruption will affect paper and substrates, printing inks and codings, toner cartridges and printer components, which I think they’re talking about enterprise printers there. Plates and printing blankets, adhesives and binding materials, packaging materials, specifically, corrugated board and cartons, printing machinery, spare parts, films and laminates, digital press components, chemicals for press maintenance, and more.
A survey of 246 printers by the Printing United Alliance revealed that 90% of printing companies surveyed expected to be affected by the tariffs. 65.5% of them anticipated a 10.5% raise in operating cost over the next six months, and this survey came out in the end of March, due to tariffs, 61.4% expect reduced profit margins, 48.2% expect supply chain disruptions, 35.1% expect a drag on sales growth, and 15.1% actually expect a boost from reduced foreign competition.
The digital marketing sector is also feeling the strain. According to eMarketer, a tariff-induced economic slowdown could reduce the forecast for US retail media ad spending in 2025 by five billion dollars. 94% of advertisers are concerned about the impact of tariffs on ad spending, with 60% anticipating budget cuts of six to 10%, and over 20% are expecting deeper cuts of 11 to 20%, and that’s marketing budgets. Not specific to digital or print. It’s overall.
So, we have recorded a podcast on this previously, but now that the tariff reality has set in, we wanted to revisit. So, let’s start with the information that you’re receiving from your suppliers, and where else are you getting info to keep current? Jamie, let’s start with you.
[0:15:18.6] JM: I’m getting emails from my suppliers, at least, I don’t know, I have a folder with them in there, at least a dozen or so. Anywhere, stating from five to 10% increases on different materials. Now, that’s like, corrugated board, like Eagle sell Falconboard, that type of stuff, thicker boards and stuff like that, we do a lot of POP with to plastics, PVCs, all that type of material, everyone is of range between five and 10%.
None of them state tariffs explicitly, but they do, in their wording, say a few interesting things. So like, the letter says that it will be global situations, they’re calling it, not specifically tariffs, but global economy, and they’re all starting to expect anywhere from June 2nd to like, the 12th in June. So, this has been going on for about a month now, I’ve been getting these. We have a couple of big quotes out that have been out for a month with a lot of big orders on boards.
Like, skids worth the material, and they’re like, “Get this order in in May, this is going to happen June 2nd, this is going to happen the first week of June.” So, I just got a very nice, sizeable order today on a project that I’ve been calling them back and forth, like, “This is a big job, you need to do this by the end of the month.” So, a couple of jobs came in today that they’ve been dragging their feet on for three weeks.
At first, they wanted the jobs by June, and now, they’re releasing them at the end of May, and now, they need them sometime in June, but it’s – that part I’ve also noticed. Like, people have kind of waited a little bit. They put in like, a couple of nice projects in April, and beginning of May, and it slowly dragged their feet. I have a few jobs that are in-house on magnet that we talked about, and they’re finally happening, but it took a while because we had kept telling them, magnet’s going to be an issue, and they finally pulled the trigger, so.
[0:16:56.7] DC: I told you magnet is going to be an issue. I was ahead of the game on these tariffs, you have to admit it.
[0:17:03.3] JM: I’ve talked about it.
[0:17:04.0] DC: No, we did, but you found an American supplier, right? That makes them –
[0:17:08.0] JM: Found an American supplier for magnet, and then, also, our magnet suppliers that they are well-stocked, we are good for the next foreseeable future, who knows what’s going to happen over the summer, but we’ve gotten skids and skids of magnets just because we do a lot of that, and they’re just keeping up with us right now. So, which is good, but –
[0:17:22.0] DC: Excellent. Okay, but just remember, supply and demand. Just because they have it, doesn’t mean it’s going to cost the same, if everybody needs it and there’s no more coming behind it. So, just keep that in mind. William, are you receiving information from your current suppliers, and where else are you getting information to stay current on the situation?
[0:17:41.4] WC: I have gotten one communication from one vendor about supply increase in costs, which is garments. Garments, I got a notification –
[0:17:51.6] DC: I got one of those.
[0:17:52.2] WC: That garment prices were going up, June 1st. June first, and again, same figure, five to 10% across the board. Now, just because I haven’t received the communications, doesn’t mean that they haven’t gone out. A lot of our communications are set to go to generic mailboxes, I don’t communicate with our vendors directly very much. I have feelers out through my management to our direct sales people to inform us when increases are coming.
I’ve reached out to a couple of direct sales people to let us know when increases are coming, and still have not gotten anything directly yet. We know they’re coming, we know prices are going up, right? And to your point, Jamie, the messaging that you’re getting is it doesn’t mention tariffs at all. It’s talking about global economy, it’s talking about inflation, it’s talking about all of these things that really were already happening before the guy that likes to make tariffs, we won’t talk about him.
Anyway, before the tariffs were here, there was already a cost increase; labor has gone up, minimum wage was increased tenfold over the last three years. The expectations for wages is exponentially getting higher. I have to pay more in order to keep my staff and to find new talent. There’s a lot of things that are increasing in cost, right? But it’s a funny thing in this industry that as soon as you start raising your prices, people start chopping you more, right?
And the reason that they’re not using tariffs in the language is because if the tariffs go away, then the expectation is they reduce their price. Nobody is going to reduce their price, that was a question that I think you were going to ask, Deb, it’s not going to – it’s not going to happen. Once the price goes up –
[0:19:38.6] DC: Right. Let’s – let’s get there. Let’s – let’s –
[0:19:40.5] WC: It’s okay, let’s get there.
[0:19:42.0] DC: Let’s get there, let’s get there, let’s get there my way, okay.
[0:19:44.6] WC: Okay, okay.
[0:19:45.0] DC: By the time we get to the end, maybe you’ll change your mind on that. Okay, so we spoke about this last time, and Jamie, you also mentioned that you have been calling around for the substrates that you know that you have to have under any circumstance. So, are there other areas that you’re reassessing your supply chain, and how will that affect, if at all, your internal processes, like estimation and project timing? I was thinking about estimation today, those people must be going crazy with all of the changes and anticipated changes. Jamie?
[0:20:19.4] JM: Yeah, estimating is a big thing. I do quote a lot of my projects, but I do have an estimator, and he works on it. He comes to me all the time, he’s like, “What do you think of this?” I’m like, “If it’s a certain amount of boards, we need to quote it.” The price we have are holding for 10 boards, 20 boards, 25 boards, but if it’s 50, a hundred boards, we need to make sure the price is right, make sure it hasn’t gone up, that we know now, it’s going up in a week or so.
But yeah, so – and we’re also checking other suppliers. We’ve, you know, we’ve broadened our range, and like we have like three or four really good suppliers we work with, but we’re like, “Hey, somebody else came in,” and like, “Hey, you know, we also sell this. Like, we’ll give you a shot, just, I need to know where you’re at, and what’s your rule on this? When are you raising prices?” And they kind of give us the same thing.
Well, the manufacturers are telling us the prices are going up. So, we’re going to try and not do that, but we’re going to have to give you some kind of increase, so they’re not. That’s why they’re going five to 10% there, you know, somewhere in that range. So, that will get sent out, that will go to the customers. I told my customers on big jobs, I’m like, “This is happening in June, if you don’t get this order in, this price will go up.”
And I’ve told them how much it’s going up. So, especially on that, if it’s like a small order, we’re holding the price, but if it’s bigger orders, and it’s affecting it a lot, yeah, that’s going to get passed on to it, and right now, the timing is not really been an issue. Materials have been in stock, but you know, that could change at any moment. So, a couple of people ordered the same material, and the next week, that could – that supply could get real low, real quick.
[0:21:38.0] DC: Yeah, if the project’s coming in now that are getting quotes that aren’t going to become active ‘till further down the road, that I would be concerned about, with pricing. I’m assuming you’re putting caveats in your quotes that they’re either only good for a certain amount of time, or if there is a giant – I mean, there’s a big difference between the 25% increase and a 154% increase, so what that ridiculous number was, for somebody buying a significant amount of materials. So, what are you doing about that?
[0:22:15.9] WC: Well, in our notes, right now our quotes are good for 30 days. So, right now, we haven’t changed that right now, so we’re holding that. So, we will look at that as the time comes and we see what happens next week with whether actually the prices are going to be, because we’ll quote everything again next week and say, “What’s the price at? Where is it at now?” Just making sure it’s 6% and not 10%, or it’s 10% and not 20%.
Just making sure that you know, I got this letter, it doesn’t mean everybody will hold to that, it’s exactly what they say they’re going to hold to. So, we’ll watch that, pay close attention to it, and then, you know, as we need to, customers will know. Like, this is going to change.
[SPONSOR MESSAGE]
[0:22:49.4] DC: Are you looking to elevate your game, take your bottom-line customer relationships, and events to the next level? Then, I want to work with you. I’m Deborah Corn, the Intergalactic Ambassador to the Printerverse. I engage with a vast, global audience of print and marketing professionals across all stages of their careers. They are seeking topical information and resources, new ways to serve their customers and connect with them, optimize processes for their communications and operations, and they need the products and services and partnership you offer to get to their next level. Print Media Centr offers an array of unique opportunities that amplify your message and support your mission across the Printerverse. Let’s work together, bring the right people together, and move the industry forward together. Link in the show notes. Engage long and prosper.
[INTERVIEW CONTINUED]
[0:23:50.6] DC: So, Will, before you said you were doing estimates for customers, which did surprise me. I didn’t know that you did estimates for customers. I thought they all – it all went through your system because when I was there and I had a project, they went into your system, as I was standing at the counter. They’re like, “You could have done this yourself from home, by the way.” Just FYI, they gave me.
So, what are you estimating for customers, and what are you doing about price increases, and because you have a giant online presence, how do you deal with that as the prices fluctuate for materials, with the estimation system you have?
[0:24:26.0] WC: Well, our software will generate an estimate in the same way that will create an order; it just makes a PDF that says, “estimate” on it. I mean, that’s really all an estimate is, it’s your price and –
[0:24:34.7] DC: Okay, so, it’s not – it’s not calculating the margins?
[0:24:38.7] WC: It does, it does, using the same calculator and the same software and the same process that we use to generate an order. It’s the same thing, it’s cost and your markup.
[0:24:47.2] DC: So, you don’t have to adjust anything if materials cost more?
[0:24:50.0] WC: Well, yes, of course you do.
[0:24:50.4] DC: Today, and then less tomorrow?
[0:24:52.5] WC: Your margins fluctuate regardless, right? So, when we’re in – we’re in a volatile market and prices are increasing and changing constantly, to try to keep up with that in a catalog or even an estimating tool. I don’t care what software you have, there is no one that can do that and keep up with that, it doesn’t exist. So, the problem that you have is that your margins are going to change, and that you can’t count on the same margin from day to day, and one of the big key points that you said at the beginning of this conversation, Deb, is that we’re marketing, and the first expense that gets cut is marketing.
So, whether it’s digital marketing or printing, this whole industry is going to get turned upside down because the world economy is being turned upside down. Now, in addition to that, Jamie, you have a lot of contracts, you have a lot of people that you work with that you probably have a better relationship with than what I’m about to say, but it’s about to become the wild west, and everybody is about to start shopping everything, and you know who’s going to win? The lowest price and quality is going to get compromised over cost and over price.
[0:25:58.2] DC: And speed to market, I’m just going to jump in this.
[0:25:59.9] WC: And speed, yep.
[0:26:00.6] DC: The same thing with COVID, it was those two things.
[0:26:02.9] WC: Yep, so I am still holding, right? I have a marketing campaign that I’m working on where I’m not going to mention tariffs, but we’re going to mention we’re going to raise our prices, and this is how we’re going to announce that we are going to raise our prices is that we haven’t done it yet, so order now before we do, and then we’re going to raise our prices a little bit, and I am going to tweak things up a little bit.
And I work in a different kind of arena in the sense that I set my pricing and my margins based off of my cost of material, and I have a formula that I use to do mark up, and I’m sure everybody does something similar, and it’s a flawed system. It is a very flawed system because if you really account for your payroll, your equipment, your mortgage, your utilities, all of those things, and you create a formula that puts that into the cost of the material, it’s a whole different game, and the pricing wouldn’t work.
Nobody would be able to charge what we really should be able to charge in this industry. It’s been commoditized for like the last 25, 30 years, and we’re expected to keep the same pricing when things have continuously gone up over the last 20 years. So, our margins as being middlemen, right? Because Jamie, same as you, you’re a manufacturer, but you’re a middleman because you’re still taking a mass-produced product, and then you’re finiting it into a much smaller consumable product, right?
Even though you are customizing it, and being a mid-level or small business is going to continue to deteriorate, and going to continue to be harder to make money at. Innvoke is a good example of that because they see the writing on the wall, and that’s why they’re buying and absorbing smaller businesses so that they can create a larger presence in the market, and the higher the volume, the bigger the presence, the harder it is.
[0:27:55.5] DC: And geographically as well.
[0:27:56.7] WC: Geographically, right. So, I’ve done the opposite, right? I’ve been prepping since the hurricane to make my overhead as little and as low-impact as possible. So, I am trying to be as nimble and as thin and as easy to manage as possible. So, I’m brokering a lot of stuff, so we’re doing less manufacturing in-house. I own all of my equipment on the floor, I think I mentioned this earlier, except for my click rate printers, which I know exactly what I’m –
They can’t come in and change my cost. If they can’t get the part to fix my printer that I am paying the click rate for, that’s their problem, not my problem. I’m going to start making calls to management until they figure it out, whether they have to pay three times as much to get it to my equipment. They have to take care of that because we’re under contract to do so. So, if you are in a consumable situation where you have to pay for your consumables on your equipment, then you’re going to be in a much more difficult position than what I am, right?
So, there is different ways that you can approach this, and that you can challenge this new system, but the new system is going to be, again, for lack of a better term, the wild west.
[0:29:03.4] DC: Yeah. So, let me ask you this, and go into our next question if I could just stay with Will for a second. If you went into your algorithm or your system, or whatever is the thing that is calculating the margins for you, and you just increased all your prices by 10% right now. That means for 30 dollars, that is an extra three dollars, right? On that order. Do you think that many people would notice on that online traffic that, “Wait, last year I paid 56 dollars for this, and now I’m paying an extra six dollars,” do you think that they would know?
[0:29:40.0] WC: No, I don’t think that that would make much of a difference, but you have a software issue, a fundamental software issue, which is universal to every e-commerce or estimating tool, is that there isn’t like a magic button, where you say mark everything up by 10%.
[0:29:56.7] DC: Oh, you can’t do that?
[0:29:57.8] WC: No, it doesn’t work that way.
[0:29:59.1] DC: I really thought you could. I thought you’re just going in and say, “Make it 10%.”
[0:30:01.8] WC: No, you have to go in, and you have to touch every –
[0:30:03.9] JM: Like in every little line item.
[0:30:05.1] WC: Every line, yeah, you have to touch them all.
[0:30:07.4] DC: Yeah, but that’s what I’m saying, like if you just give it –
[0:30:08.4] WC: And it would take any catalog, any estimated tool, I don’t care what it is, it is going to take 100 to 200 man-hours to update the pricing appropriately. You know, Jamie is taking the set, how many? More or less?
[0:30:21.3] JM: I think less because we kind of monitor that all the time. I’m like, every now and then, we’ll tweak something like, “Hey, the proof seemed like they should” – Their cost –
[0:30:27.8] WC: The entire system, an entire system, everything across the board, change all the pricing up by 10%, how many man hours?
[0:30:34.9] JM: That’s probably – it is going to be a lot because of how many substrate we have in our –
[0:30:38.1] WC: Yeah.
[0:30:38.2] DC: Okay, everybody, calm down for a second.
[0:30:40.0] JM: It costs a lot of time, the substrate.
[0:30:42.2] DC: Hang on a second.
[0:30:42.6] JM: Not all the processes, we have thousands of substrates here.
[0:30:45.8] DC: Freaking printers. Okay, you don’t have to do everything at once, gentlemen. What are the items that are ordered the most? Start with those and just, if you mark those up, then it might cover some of the future issues that you might have with people you actually speak to all the time that have budgets for print during the year, and now, where they were spending $8,000, it’s going to cost them an extra $800, right?
If it’s a 10% thing, so maybe with those people, you can say, “You know what? You’ve been such a great customer, I’m only going to do you 10% because you already know you’re making up the money from those smaller orders,” and every penny is going to count. So, with that being said, what do you think about that? And also, you just said, Will, that you are planning on telling your customers that you are raising prices, although you are not going to use the word tariff.
What about import tax? Because that’s what it is. I just feel like we shouldn’t be making a fantasy land about where this is coming from, and we have to take responsibility that the United States is driving this, this cost, this increased cost with, and I am not being political. I am saying this is a situation that we’re in currently, and we have to deal with it. Will?
[0:32:11.8] WC: So, I think that the messaging, again, Jamie gave some great examples via email earlier that he copy and pasted and sent the letters that are being sent out, right? And they are very apolitical. They don’t mention the word tariff, they mention inflation, they mention global economy, they mention these other things, right? And I will do the same thing. I will not mention tariff because tariff is polarizing, right?
Whether you agree or disagree, or you use that word, it is going to attach to something political, and price increases are price increases, and there’s – this has been a hot topic of conversation for the years that we’ve been doing this podcast about increasing prices, and how it is a sensitive thing, right?
[0:32:54.3] DC: Would you be increasing your prices if there were not tariffs and import taxes? Would you?
[0:32:59.2] WC: Yes, because inflation and because labor costs increase, and because thousands of increases.
[0:33:03.5] DC: Okay, that’s fine.
[0:33:03.8] WC: And because all of these other things have increased, right? Like we, I should have been raising prices 10 years ago, five years ago.
[0:33:11.0] DC: If this is a way for printers to raise their prices under some other, like, “Look over here, don’t look over here,” and like a shell game thing, fine.
[0:33:20.5] WC: I don’t think it’s necessarily a shell game thing. I think it’s –
[0:33:23.2] DC: Well, then, where was the industry before tariffs came? You know, speaking out like about what is going to happen to the industry.
[0:33:31.2] JM: Well, during COVID, we had a lot of this. Material costs went up like crazy. I mean, stuff went up every week.
[0:33:35.6] WC: It did, it went up a lot. It went up like crazy.
[0:33:37.4] JM: 10, 20 dollars a board, like it was crazy. Like acrylic costs ridiculous amounts, and so did –
[0:33:41.8] WC: Most of those prices didn’t come back down since then.
[0:33:44.1] JM: Well, it came down a hair, not a lot, so that just went up.
[0:33:46.5] WC: Yeah, a smudge.
[0:33:47.9] JM: So, again, we passed that onto everybody else, like, “Hey, this costs more,” and people knew it, and back then, they were like, “We understand things cost more, we’re going to pay it. You know, we understand, just get it done. Can you get it done when we need it?” And that a lot of times it’s like, “They’re needed on this day. If you can get it done by that date, that job is yours,” and if you can’t, that job is going to somebody else.
[0:34:06.1] DC: Jamie, where do you come in, and just raising your prices 10 to 15% across the board, and then you have some wiggle room as the year goes on?
[0:34:14.8] JM: I think that would be great, all well and said, but now we know prices are going up five to 10%. We will do that, but we usually tweak things throughout the year. Like, we’ll look at things, and go, “This doesn’t seem right, we’re not” that some things are going up, and maybe the proofing paper costs more, we didn’t realize that, and it will show up in like a month or whatever, like hey, tweak that a little bit, tweak this.
So, we’re always tweaking things, and trying to make sure that there is a, you know, there’s a good balance there, but I don’t think we’ve ever just gone, “Hey, right now, we’re raising things 10%, like across the board. It just doesn’t happen that way.
[0:34:47.4] DC: What’s going on with them, UPS, FedEx, and all of that? Are they raising their rates?
[0:34:53.1] WC: They’ve been raising their rates.
[0:34:55.3] JM: There’s rates, they always call it a fuel surcharge, they get away with that. So, fuel surcharge, and we don’t guarantee that your package arrives on time.
[0:35:01.9] WC: Change of address surcharge for three-time verified address, you know? They’re throwing all kinds of little random pieces, they’ve got monopolies, you have to use one of them.
[0:35:13.3] DC: Well, they’re getting concerned about the trucks now, and the truck drivers, and all those people who have nothing to pick up from the docks, and that’s how they get to the – some of them get to the hubs, where they go out to be shipped to other places, and things like that. Okay, so if you guys raise your prices, and the import taxes, tariffs, global uncertainty, whatever you want to call it, goes away, are you going to lower your prices?
Now, you’ve kind of both – well, Will has answered it. Jamie hasn’t really answered it, but if I guess, if I have to agree if you don’t say tariff, then it’s not caused by the tariff, and that is a pretty smart strategy. So, where are you in this? And I also am curious because I am not a printer and I don’t purchase paper, I keep getting emails that the paper prices are going up, but I want to know if they ever came down after COVID. Anyone, take that.
[0:36:18.4] WC: No, they never came down, they’ve maintained their pricing. They maintained the increase that they occur, that occurred during all the supply chain issues. There’s been maybe slight cuts of one to two percent in some areas, very few. To answer your question directly, no, I don’t intend to reduce my pricing after I’ve raised it. Once I raise it, it’s there, which is the general market.
That’s what you’re going to see across the board, whether it’s printing, paper, substrate, or Coca-Cola, McDonald’s. Once it goes up, it’s not going back down.
[0:36:50.3] DC: Used cars are out of control right now because they’re like, they –
[0:36:52.7] WC: Oh, yeah.
[0:36:53.7] DC: The new cars are an extra 10 grand, I could charge an extra four for the used car because everybody wants them.
[0:37:00.0] WC: Here’s the brass tax, right? Is that in our industry, in our industry, there is no such thing as a price. There’s the cost, right? And you can say, “It’s this price for 50 business cards, and this is what I put on my website, and I’m not going to negotiate 50 business cards.” But when you’re dealing with 250 boards, and you’re competing against three other people that are quoting the same thing, quality, responsiveness, or how fast you can get it done, and the price, right?
And I think that it’s going to drive, again, more and more towards the price, less about the other factors, right? We used to say you get to pick two, I think now you get to pick one, and one, it’s going to lead by cost, not price, right? You can set line item pricing for knick-knack stuff, but when you are talking about big projects, you’re going to cut your margins. You are going to reduce your profit in order to land the work because it’s going to be better to get the work and to make less money on the work than to get no work at all.
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[INTERVIEW CONTINUED]
[0:38:43.6] DC: 61.4% of the printer surveys expected reduced profit margins, so that’s pretty much what you’re saying. Jamie?
[0:38:53.1] WC: Yeah, that is exactly what I am saying.
[0:38:54.2] DC: Yeah.
[0:38:54.5] JM: Will I lower my prices? They might come down a little bit, depending on what’s going on, but I mean, like Will said, when we are doing these big jobs, we’re pricing the material for that job. So, in two months from now, if that material costs less, that’s when we’ll get a less price because we are charging – we are getting charged less for it. If it’s like Will said of 50, 100 business cards or 10 signs, that’s going to stay at the higher price because we are paying more for that smaller amount of material.
So, but yeah, if the prices will come down, if the pricing of the material comes down because certain jobs are just – that’s the way they’re priced, and you know, priced by the job, and what the current rate is on the material.
[0:39:30.9] DC: Okay, last question, and this is definitely a pet peeve moment for me, and I touched upon it a second ago, but I have been getting email and email about webinars and information about how will tariffs affect the printing industry, and again, I ask where were all these people, October, November, September last year because there was not a peep from anybody about tariffs, and tariffs were definitely flying around as things that would happen after the election.
So, why? It’s very upsetting to me that the vested interest are so obvious, and now, the vested interest is in following this tariff elephant with a shovel, picking up the tariff poop, and trying to come in and be advisors about what to do about it, and I don’t know, I think it’s freaking hypocritical. Somebody agree or disagree or whatever you think about this, if you think anything, but I’m going crazy.
[0:40:45.0] JM: I don’t know. We went through this before there was tariffs, there’s talk of tariffs, and whatever, and back in 2017, like where we – tariffs are going to go higher, and they did, and we went through the same thing. It was a little bit smaller; it wasn’t 150% tariffs or whatever now, but that still changed. It goes up and down every, depending on who you talk with, in which country it is, and whatever. So, it is – nothing is written in stone yet, so it changes as the wind blows.
[0:41:11.0] WC: So, there is a difference between being a leader and a follower, Deb, and you are a thought leader, right? So, when you are, you know, screaming from the rooftops, “Hey, this is going to be screwed up, this is coming.”
[0:41:25.2] DC: Just prepare, prepare, it’s all I’m saying to people, right?
[0:41:26.8] WC: Just listen, listen, right? So, you said it first, right? You were at the forefront, and now, everybody is going to come out, and this is going to be – it is a hot topic, right? It is a buzzword, that’s the buzzword, it’s tariff.
[0:41:38.8] DC: And they’re making money from it, and they’re making money from it.
[0:41:41.2] WC: I’m sure they are. Coaching is nothing new. If I could actually make myself be a coach, I would be a billionaire already, like it’s ridiculous. A part of a segment of not our industry, but of humans in general, that are going to seek out “the sky is falling” people, right? So, the sky is falling, and then there is the people that are going to try to sell you pieces of the sky, and that’s basically what you have –
[0:42:07.1] DC: Oh, sell you umbrellas.
[0:42:07.7] WC: Yeah, sell you umbrellas, right? So, it’s snake oil regardless of what end of it you are. If people are trying to profit off of teaching you how to circumvent the tariffs, then they’re probably just stealing your money. That’s the reality of it.
[0:42:22.6] DC: Also, that it’s like analysts and strategists and economists, you know, come speak at my event about tariffs, which I wish they will, speaking about at these events last year, and saying, “Look, we don’t know what’s going to happen, but if it happens, let’s just talk about how it might affect the printing industry,” and just prepare people, and nobody did. Everybody was silent because it was such a hot topic, and I’m not being like, “But I, you know, I am not saying it because I was out there.”
I was out there because I don’t have the vested interest that the rest of the people have with the fact that, well, if you’re all gloomy and doomy before the end of the year, who’s going to buy equipment? I think you guys know I wrote that article about the tariffs that were coming, and how do people prepare, and I spoke to an industry analyst at an event, and I was like, “First of all, why are you here? This is crazy.”
“How is anybody going to be receptive to anything you have to say? What are you telling them?” And the person said, “I can’t tell them the whole truth because if I did, nobody would buy any equipment, and I wouldn’t have a job anymore.” I was like, “Okay.”
[0:43:36.3] WC: Very true.
[0:43:37.2] DC: Well, I appreciate your honesty, and yeah, so that’s what – I don’t know. I don’t think it’s cool. I just don’t think it’s cool, and I actually reached out to a couple of trade publications who were having, “Everything’s great. It’s all going to be great, don’t worry about it. You know, keep investing in things, and do that.” and I was like, “You know, some of this people are like, mortgage their houses to buy equipment.”
“And if they don’t have – if they are counting on you and your ‘trusted advisers,’ maybe fact check some of this information because I did,” and I sent them links, and I said, “Uh, what your person’s saying is not matching what is going on with the world.” So, you know?
[0:44:29.2] WC: Deborah, Deborah, I’m sorry, I don’t mean to interrupt you, but we live in a world of copier salesmen. That’s who we deal with, Xerox salesmen. That’s the original copier salesman, and that’s who comes into all of these shops, and all of our shops. If you have a shop, you’ve met this guy. They don’t care about the market, they don’t know any analysis, they know none of that; their goal is to get you to buy a piece of equipment, and that is –
[0:44:57.0] DC: Yeah, but I’m talking about the industry analyst and the organizations who do know.
[0:45:00.5] WC: The industry – yeah, but the industry, the industry trickles down, though, right? Like, if the manufacturers aren’t able to sell equipment and the suppliers aren’t able to sell their media, their substrates and their paper, then they’re not making money, but if they’re not making money, then we’re not making money, but at the end of the day, again, small business is going to carry the load because the big guys, they’re going to still make their money.
They’re still going to make their profit. If they have shareholders, their shareholders are still going to make money. We’re the ones, the ones on the frontlines, the ones that actually deal with the consumers, are the ones that are going to take it. We’re going to eat it, we’re going to raise our prices.
[0:45:43.8] DC: Jamie, final words?
[0:45:45.7] JM: Talking about buying equipment and stuff like that, we’ve been shopping for this since the beginning of the year, and they’re like, “Buy now because prices might go up.” And, like, look, we’re probably putting on hold till the end of the year, and they’re like, “Well, you don’t know what’s going to happen.” I’m like, “Well, hopefully, the prices come down because right now, we’re just going to wait and see because we didn’t pull the trigger on a couple of things that we thought we might, just because of that.” And then, all of a sudden, they’re like, “Well, we have an ISA special now,” you know? Like, ISA was over a month ago, like, we’re still on special, so.
[0:46:12.7] WC: I did buy that Roland.
[0:46:15.5] JM: Nice.
[0:46:15.8] WC: No, I did, I did actually wind up buying that Roland, but I didn’t lease it, I just paid for it. I’m waiting for it to get delivered. So, that’s one of those things that I know that I can make money with because it’s stickers. We already make stickers, and we – to do the same thing that that machine does, we go through three to four steps, and this will do it in one to two. So, it’s going to generate revenue, and then we could put more marketing behind stickers, which, stickers is like ISA.
If you’re at ISA, it was all about the stickers. Still spending money, even though the sky is falling, but just be conservative on how you spend it, and know that you can make money with it when you spend it.
[0:46:54.2] DC: But you’re investing in a trending product that a lot of people will – are willing to pay an extra dollar or two for, which is all that that markup would be on that, unless you really went crazy. So good, good on you. Okay, fine, I got a little ranty at the end there, but it just pisses me off when the people with the largest megaphones don’t take a side, and what I mean is the side of the industry.
Like, “Hey, everybody, we don’t want to get political because we’re not political organizations, I get it.” But just in case this happens, let’s talk about how we can all work together or how we could all create a lobby to – we have all these different organizations going, instead of everybody together, you know? Like, just more “we’re all in this together” kind of stuff, and it’s sad to me that we didn’t do that because printing is such an important part of everything, literacy, democracy, everything.
Education, and we shouldn’t just let it go to just a bunch of online vendors who are price-slashing because they can, because they have ridiculous volumes. So, everybody, work with each other and we will, as always, get through this, like we get through everything else. So, thank you, gentlemen, very much for your time and attention. Links in the show notes to our last podcast, and we’ll talk about something happy next time. How is that? Everybody agree?
[0:48:30.4] WC: Yeah.
[0:48:31.0] DC: Yes? Okay. Happy. All right, until next time, everybody. Print long and prosper.
[END OF INTERVIEW]
[0:48:40.4] DC: Thanks for listening to Podcasts From the Printerverse. Please subscribe, click some stars, and leave us a review. Connect with us through printmediacentr.com, we’d love to hear your feedback on our shows and topics that are of interest for future broadcasts. Until next time, thanks for joining us, Print long and prosper.
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