Brokers on Buyers on Brokers

In an earlier Tip, I shared with you comments from print buyers about print brokers. I also surveyed print brokers for their insights on why buyers have such strong opinions about the brokerage industry. In today's Tip, I am presenting pretty much all of these brokers' feedback. I received permission to use their names, too.

This topic interests me since it generates such strong opinions. Here's what the print brokers had to say. Once again, the Tip is so long, that I am not including the full content here; rather, the full Tip is posted on our web site.

A quick refresher about print brokers: Unlike print sales reps, print brokers are not employed by printing companies. Rather, they represent several printers. This gives them the ability to place a wide variety of print projects with the right printer; that is, the printer who has the right equipment.

The broker takes the place of the sales rep, in a sense, as their customers deal with them, not the manufacturer. However, as brokers will remind you, they work for you - not the print manufacturer.

Newer terms for brokers have been cropping up in recent years, including print consultants, print managers, print distributors, print agents, and print specialists.

By the way, "print broker" is not synonymous with "print manager." I associate print management with a totally different business model. The print management industry - a real force in the UK - comprises large companies that manage entire creative and communications campaigns for clients, from soup to nuts. Business process outsourcing, print outsourcing - these are the phrases used to describe print management firms. I don't associate these phrases with brokers.

The brokers who took my survey:
David Jacobs, Richard Jacobs & Co., www.rjco.com
Brian Maranian, Signature Printing & Consulting, www.sigprint.net
Kitty St. Sauveur, Alliance Print Group, www.allianceprint.com
Dennis Galligher, Galligher Printing, www.galligherprinting.com
Chuck Spiegel, Advanced Graphics, Inc., www.adv-graphics.com

1. How does a print brokerage firm differentiate itself?

   - By service.

   We define service as the time to respond accurately to a customer’s request for information no matter if the question is related to a price quotation or the status of a current job.

   We also try to align ourselves with reliable, privately owned printers who themselves are committed to customer success but may not have the resources to build out a national sales organization.

   While we realize that price is an important variable in considering a new vendor, we look at the long-term relationship between the customer and the printer. Is the customer willing to pay enough to make their business valuable to the printer, and is the printer willing to put enough skin in the game to really deliver on the promise of customer satisfaction.

   We then measure each of these and make sure we continue to deliver at a high level so we have data to back up our marketing messages. Our situation is a little different since we represent our printers rather than broker their work.
   (David Jacobs)

   - Print "brokers" can differentiate themselves by not referring to themselves as brokers. People deal with brokers every day and have no problem with it, but as soon as you cross over into the printing industry, the word "broker" is taboo. We refer to ourselves as a "print management company," because that's who we are and what we do. We manage every aspect of the printing, finishing and mailing process. The difference between us and the average "print broker" is that we don't just sit behind a desk, take orders, cross our fingers and hope that the delivery date hits and that the quality is there. We are very hands-on from the beginning stages of design, to checking proofs over before our clients see them, to press checks through delivery.
   (Brian Maranian)

   - The most common understanding of a print broker starts with a perception of one individual, possibly two, that manage printing projects. Alliance Print Group (APG) begins to differentiate from that perception by offering our client base a full complement of print solution services, employing account representatives that are supported by our internal customer service staff. In addition, APG features a technical group for conceptual development.
   (Kitty St. Sauveur)

   - We have an open relationship with our clients; I mean, they know the printers we want to use for estimates, we talk about which printer is best suited based on quality level, budget and turnaround. They (our clients) will even work with the printers' CSRs when appropriate. SERVICE, SERVICE, SERVICE. It is the only thing that really differentiates us.
   (Dennis Galligher)

   - We are different because we offer more possibilities to the print buyer than just the capability of any one print manufacturer.
   (Chuck Spiegel)

2. What value do you bring to your customers?

   - Specialized print knowledge within the markets we focus: Catalogs, Brochures and Perfect Bound Books.

   Fast pricing (under 5 minutes of entering a Request for Quotation)

   A reliable network of printers where the customer speaks directly the customer service staff.
   (David Jacobs)

   - Experience. Experience. Experience.

   APG brings over 100 years of combined experience managing printing projects. Currently, APG is providing and/or extending the production capabilities of market-leading clients within numerous industries including financial services, health care and education.
   (Kitty St. Sauveur)

   - …I represent my customer at the end of the press. We make sure they get the best value for their print dollar, and we keep customers are involved in the process. We have to ability to pre-plan jobs to get the best value on paper, press-time and post press.
   (Dennis Galligher)

   - We have to bring superior service/knowledge than the manufacturer does. More is expected of Brokers.

   Our allegiance is always to the buyer. Brokers will replace vendors if they do not perform as needed. Direct sales people do not have that option.

   Brokers are excellent negotiators. We break down each component of the project. We buy the paper, handle the fulfillment, mailing or shipping.
   (Chuck Spiegel)

3. How do you respond to buyers who believe the following:

   Brokers will cost me more.

   • Sometimes more, sometimes they can help save money. The only way to know is to quote jobs and see how the pricing lines up.

   • Sometimes the brokers have a better relationship with the source, developed over many years. They can get better prices and since they always have jobs in production they have already experienced the learning curve of a new printer.

   • At some of our printers we are able to offer better pricing than the printers in house sales force. We can be working on multiple projects from the customer at different printers and can therefore sell each job with a lower markup because we have a higher chance of winning multiple jobs.

   • We also typically speak directly to estimating and have 10s of thousands of previously quoted jobs in our database. Making sure the pricing is "fair" is very easy for us, we just pull up a few past quotes and see how the manufacturing and paper numbers compare to past and current jobs.

     Brokers tend to discourage direct contact between me and the printers.

   • This doesn't apply to us, we rep and don't broker. Our customers speak directly to the plants.

     You have to chase brokers for details on your project (brokers lack follow through).

   • Our staffed office of 8 means someone is always available to answer your questions of find the answers you need.

     Why do I need to use brokers? Buying print well is MY job.

   • Perhaps, unless you'd like to meet a smaller printer not currently calling on your firm or would like to take advantage of known openings in press schedules or new pieces of equipment that you may not know about.

     (David Jacobs)

   Brokers are just middlemen. They add a layer that I don’t need. “It doesn’t make sense to use brokers when I can go right to the source.”

   - At Advanced Graphics, we do not use sales people at any of our vendors. We deal directly with management. There is NO extra layer. A direct sales person dictates to the print buyer what their company will do regarding price/delivery. A broker dictates to their vendor what is needed. The broker has the leverage the direct sales person does not.

   Brokers tend to discourage direct contact between me and the printers.

   - Not at Advanced Graphics. Our clients know our vendors. The question is, what do you mean by direct contact? If the broker is on top of things, he/she will be able to give you any information you need right away.

   Using a broker means I don’t have control – they do.

   - I will argue using a broker gives you more control. When you deal direct, the sales person is at the mercy of the company they work for. A broker always gets better service because they are always being courted by the manufacturers.

   I would ask what control do you have with a direct sales person that you would give up with a broker?

   You have to chase brokers for details on your project (brokers lack follow through).

   - Not at Advanced Graphics. If you have to chase anybody for details you should not use them.

   Why do I need to use brokers? Buying print well is MY job.

   - A good broker is your partner in buying printing. The broker’s job is to make your job easier and to make you, the print buyer, look good to the people you work for.

   (Chuck Spiegel)

   Brokers will cost me more.

   - We will share our markup with buyers when appropriate. Captured sales reps get 7% commission. We charge 10%, and if printers give us 20-30% off retail, everybody is a winner.

   Brokers are just middlemen.

   - They add a layer that I don’t need. “It doesn’t make sense to use brokers when I can go right to the source.” Yes, this is true and there are buyers who really know the business and really don’t need us and that makes sense.

   Using a broker means I don’t have control – they do.

   - Not true. I encourage customer to be on press with me, discuss the estimating process, and review choosing the right printer.

   Why do I need to use brokers? Buying print well is MY job. -

   We can help relieve the burden. Help them look better in their company's eyes. Our buyer is usually the marketing person who wears a number of different hats and doesn’t have time to shop for print quotes, keep up with print technology, paper and green issues, fulfillment. The relationship we develop lasts with that marketing person throughout her career, and if she moves on, takes us with her. Our retention rate on our top 10 customers is over 8 years.

   Brokers will cost me more.

   - APG has built a print solutions model that generates revenues in the millions of dollars. The fact that our limited, vendor partner relationships with printers, binderies and paper distributors are long standing affords APG favorable pricing. Cost benefits can be passed along at competitive rates to our clients.

   Brokers are just middlemen.

   - An interesting fact about APG is that the majority of our clients have extensive print buying experience to support their ability to buy direct. The reasons they prefer APG is that our experience and methodology extends their capability and allows for a more efficient print production process.

   Brokers tend to discourage direct contact between me and the printers.

   - At APG, it’s a common practice to involve our clients with our vendor partners.

   Using a broker means I don’t have control – they do.

   - At APG, our clients always have “control” or input to our print management decisions. At APG, we have a good understanding of who’s paying our fees.

   You have to chase brokers for details on your project (brokers lack follow through).

   - This is exactly why APG has an internal CSR staff to support our account executives. It’s a team effort and our clients learn the benefit of the APG approach during project number one.

   Why do I need to use brokers? Buying print well is MY job.

   - Most of our clients welcome the opportunity to extend their capability. We live in a world today whereby multi-tasking is the norm for most print buying groups. If APG client relationships evolve into a trusted partnerships, the “MY job” as described in the question is production efficient yielding real cost benefits.

   (Kitty St. Sauveur)

4. Why do you think print brokers are viewed with skepticism by some print customers?

   - Because they are middlemen. People fail to realize they deal with middlemen everyday such as Insurance Agents, Mortgage brokers, stock brokers, etc., because there is an advantage to being in a market all day everyday and knowing how jobs are going through plants, what a typical price quotation includes and doesn’t include. Does the job really fit the plant or is the printer trying to fill a press schedule with a job that is destined to have problems later? Does the culture of the customer and the culture of the printer align as well?
   (David Jacobs)

   - Due to the fact that the majority of print brokers are one or two person operations. I think the majority are spread too thin, thus the detail that’s necessary for a successful outcome starts to diminish once multiple jobs are in production at the same time.
   (Kitty St. Sauveur)

   - Brokers had a terrible reputation in years past but we see that changing over the last 7-8 years. I think GOOD brokers see the lack of service a company rep provides, and if we treat our customers the way we would want to be treated – it’s easy.
   (Dennis Galligher)

   - That is the old way of thinking. Technology has created more options for the print buyer, and the broker can be the answer to all those options. The direct sales rep is limited by the technology and equipment of the company he/she works for. Just as with direct sales people, some brokers are better than others.
   (Chuck Spiegel)

   - Possibly because the position of a "broker" was abused over the years. Many people who started print broker companies took advantage of the people who did not know print by: marking the printing up to astronomical amounts, not reprinting jobs where they were first printed, and really did not manage the jobs. They were glorified couriers that were making a lot of money on print and that has kind of stuck with this model of brokering over the years. If you really boil it down, why are print buyers not opposed to working with designers who handle the print? They essentially are brokers…

   Even if you have no interest in working with a broker and you feel we don't add any value to the process, my response would be give it a chance… Check out our credentials, call on the people we work with on a daily basis and ask our clients how it is to work with us. Would you do any different with a new print vendor?
   (Brian Maranian)

5. Think about your customers. Do they fit a specific profile? That is, are they new to print buying, do they work alone, are they graphic designers, do they work in certain industries, etc.?

   - Our customers are large privately owned companies or VP of Marketing at larger companies without the time to research vendors.

   (David Jacobs)

   - Our customers come from all industries and are print buyers, designers, purchasing agents, marketing people…etc…etc…
   (Chuck Spiegel)

   - We fit or work with mostly marketing communications. We stay away from Ad agencies, purchasing agents. I think it’s different for each print broker.
   (Dennis Galligher)

   - We work with a variety of clients. From designers who are just starting off that giggle when you talk about a PMS book, to designers and print buyers that have been buying print since letter press was the popular and only print process and they all love working with us because we provide them with good competitive pricing, excellent quality and service, and follow up. What we hear from our clients is that it is great to be able to call or email you guys about a small digital postcard or an intricate annual report and know that its going to be placed with the correct vendor and its going to get done right because we are managing the work from beginning to end.
   (Brian Maranian)

I did hear recently from another broker, Howard Kornfield (KComm), after the earlier Tip about brokers ran. Howard wrote:

"The comments from print buyers (aside from a few arrogant, self-important comments from buyer who probably don't know as much as they think they do) are pretty much on-target. An organization big enough to have a full-time person dedicated to the task of buying "print" probably doesn't need a broker. He's probably very valuable to his printer.

As a "broker" (I sometimes refer to us as a "virtual printer"), I target the 85% or so of organizations who need to buy printing, but don't have expert buyers. Very often the marketing department, human resources and other departments in medium to small companies simply do not know how to buy all the various flavors of printing they need. I bring a level of expertise that they don't have, and enough knowledge about how to get a job done that I usually cover my markup and still save the client money. When I got out of the manufacturing end of the printing business and started brokering, the first 2 customers I sold to (acquired them strictly by cold-calling, and asking if they were satisfied with the way they were buying printing) were a group of outpatient surgery centers ($30,000 annual print usage) and a software producer (mailing list of about 10,000). Both of them later told me I had saved them several thousand dollars the first year. Item-for-item, my prices were about the same they had been paying, but by changing their spec's I frequently got them better result for less money.

That experience gave me the incentive to expand my sales efforts, because I knew clients would benefit from dealing with me. On my initial presentations, I often describe myself either as similar to an independent insurance agent (many businesses need those guys, because they don't know enough about insurance), or similar to a building contractor (again, the client could contract with the carpenter, plumber, electrician, glazer, etc., but he will save money and headaches to use a general contractor).

In summary, most really good professional print buyers usually don't need my services. But the rest of the world really does."

Nancy, a printer, wrote:

"Very interesting article about print brokers. I think it’s great that you are also getting comments from the brokers – it might be interesting to get comments from printers as well!

One common thread that I noticed in the comments is the assumption that printers give better pricing to brokers “because of their print volume”. I’m not so sure that this is true! There is no cost savings to me, a printer, if I receive one 20M piece print job every other day for a month compared to a 20M piece job once a month. Each job as the same amount of make-ready and labor.

I know that the print broker is not likely to be as loyal and will tend to shop price first. By the nature of their business model, most brokers have to work with the low-cost provider – so they can add their mark-up and still be price competitive. If we are having a slow month, we might court a broker. But we have not seen this low-ball pricing scheme as a long-term benefit to our company.

On the other hand, working directly with the client, I can build a relationship. In most cases, I will be more willing to reward the direct customer with the best pricing.

I’d be interested in learning how other printers feel."

©2008 Margie Dana. All rights reserved.