Most of us have heard the old adage, “Work smarter, not harder.” That applies to print distributorships, too. Want high-profit business? You are most likely used to being pointed to many sexy products like personalized direct mail, wide-format, and promotional items, the reality is that good, old-fashioned labels, both industrial and prime, are where the highest profit lies.
Prime labels, which are the decorative labels used to market and sell products from wine to cosmetics, get all the attention. Their less sexy cousin, industrial labels (also called durable goods labels), however, which are used to identify equipment and provide information on use or risks, are the quiet, background profit-makers that many distributors use to build their businesses.
What Makes Industrial Labels So Profitable?
Most of us are familiar with the value of prime labels, but what makes industrial labels so profitable?
- They are sticky.
- They are highly profitable.
- They deepen the customer relationship.
Let’s look at each one of these in turn.
1. They are sticky.
Industrial labels, while not sexy, tend to stick with a print distributor for the long term. Products requiring UL compliance, for example, must be marked with cautions, safety requirements, hazards, warnings, electrical ratings, and installation instructions. HazCom labels, which are used to identify hazardous chemicals in the workplace, have specialized requirements, as well, including written, printed or graphic informational elements that are affixed to, printed on, or attached to the immediate container of the hazardous chemical or to the outside packaging. Both types of labels must adhere throughout that product’s lifecycle, which means they must be durable and able to withstand the most extreme environmental conditions, including moisture (in the case of certain HazCom labels, even submersion in salt water for at least three months), UV light, gasoline splash, and corrosive chemicals.
Putting together a UL or HazCom label is like putting together a jigsaw puzzle, with pieces including visual and textual information; the right inks, coatings, and substrates; and the compliant printing processes to make it all happen. Once the client has taken the time to work with you to put that puzzle together, they aren’t likely to switch suppliers easily.
2. They are highly profitable.
Prime labels are beautiful and fun to work with. They are also constantly changing and being added into and taken out of the mix. These accounts need to be continually serviced as labels are updated, customized, designed and redesigned, and kept current with the client’s marketing needs. Industrial labels, on the other hand, are unlikely to change for years, even over the life of the product. Once they are designed, your job is largely done… except to continue to take the orders as they come in.
Industrial labels are highly profitable, not just because they rarely change, but because they are highly repeatable. They tend to be ordered on a predictable cycle, so you can plan on printing a certain number of these labels every month, every year. Because they tend to repeat without changes, these labels provide recurring revenue with minimal effort, especially if the client is ordering through an e-commerce portal.
3. They deepen the customer relationship.
While pricing is important, the ability to stay in regulatory compliance is even more so. Millions of dollars are assessed against non-compliant companies every year, often in situations in which the company didn’t even know it was out of compliance. As just one example, one Georgia-based metal products manufacturer was recently cited for nearly $200,000 in fines for violations that included the failure to label hazardous chemicals. Not only do companies rack up serious fines like these, but they can end up with serious (and costly) damage to their reputations. The ability to help your client stay in compliance — and out of trouble — has a value that extends far beyond the labels themselves.
While sold into different areas of your client’s organization, industrial and prime labels are critical to your customers’ businesses. Whether it’s for industrial or marketing, your customers are counting on you, so don’t take chances. Wise has the capabilities to produce prime labels with brilliant color and eye-catching embellishments and more than 20 years of experience as an industrial label manufacturer with specialization in both UL and HazCom labels. Let us help you help your customers to get it right.
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