Fulfillment Services: Are Printers Getting It?
INCREASINGLY, PRINTERS are entering the fulfillment business sector to make their operations more viable in the future. However, most printers are not reaping the rewards of establishing a fulfillment operation. Here are several facts to substantiate this premise:
n 88 percent of printers adopted fulfillment at their clients’ request. Many of those 88 percent admit they were placed in a defensive posture to keep the printing.
n 50 percent of the printers surveyed in 2006 did not know if they were making a profit in their fulfillment operations. And 25 percent did not have a separate P&L.
The cost of entry for fulfillment is very low compared to the printing process. An investment of roughly $200,000 can provide a very well-equipped fulfillment center.
The fulfillment business model is a service model, whereas printing and mailing businesses rely on manufacturing models. The primary differences are that the service model generates revenue through storage, labor and systems, while the manufacturing model generates revenue based on machines.
Fulfillment services should generate bottom-line profits two to three times that of a printing operation. You should definitely be in double digits. If your fulfillment operation is continuing to grow and measuring 10 percent or better bottom-line profits, then you are getting it. If not, read on.
Five Focus Areas
The decision to enter the fulfillment industry is not quite as easy as it looks. Here are five areas on which to concentrate your improvement efforts.
 FULFILLMENT SOFTWARE NOT IMPLEMENTED CORRECTLY. Most of the printers I’ve visited have purchased one of the 3PF packages available. They’re very comprehensive software packages able to complete various fulfillment applications—from literature fulfillment to online stores requiring credit card processing. The key element of each of these packages is that they provide clients the ability to order directly from their desktops through a Web portal.