Our first investment survey shows an industry in transition and in a hopeful mood.
Welcome to our first survey – a look at how printers plan to invest this year and next. We also tried to gauge the mood of the industry, and were pleasantly surprised. It’s not wine and roses to be sure, but most respondents are confident about their prospects – more than 50% of respondents said they brought in higher sales in 2017 than the previous year. Also, investing projections confirm an industry well in transition. New investments will focus on wide-format inkjet, colour toner presses, digital finishing, bindery and software automation. Investment in traditional equipment is on the backburner, and there is still some hesitancy about inkjet sheetfed presses.
Here’s how our survey participants answered the questions.
A positive state of mind
Despite general frustrations, with the rise in minimum wage (that came up a few times), frustration with political decisions, a general lack of skilled staff, and finding those elusive super-performing sales reps, most respondents generally feel upbeat about their businesses.
How confident are you about the future of your company?
Finding the right group of salespeople that can create growth is our biggest challenge right now
We are a small business and hiking up the minimum wage has affected the way we run our business
We’re riding the wave of increased minimum wages, increased taxes, increased utilities,….
We love technology and we love grumbling about it
It’s a love-hate relationship with the technology. Everyone loves equipment, but most respondents just wish it were simpler, cost less, didn’t need to be replaced so often, and worked seamlessly with other parts of their shop. Here’s a sample from the responses:
When it comes to technology and equipment for your company, what is the biggest challenge you face?
The continual updating of software negates the usefulness of new hardware in a very short time.
Keeping up with change. Change seems to be happening quicker and quicker
Lack of qualified people to do the job with the technology and equipment
I switched to digital printers, but the costs of toner and drums is getting to be prohibitive. Keeping costs down is my biggest challenge
What would you say to manufacturers about how to improve technology and equipment in general?
Make the equipment more durable, so it lasts longer. Reduce the operating costs
Simplify. Make peripherals/hardware/equipment communicate better cross-platform
Take best practices from the retail world and build them into your products
Interfaces need to be more intuitive to new employees, as many of the skills are disappearing
Better support of existing products would gain brand loyalty
Ask us what we need. Then, don’t just sell and drop the box off; provide continuing training
Don’t be greedy with your prices, which prevents some very creative people from being able to afford it
It’s a positive picture our respondents paint of their sales. Most reported higher sales in 2017 over 2016, and most expect that performance to continue this year. Here’s hoping.
How did your sales in 2017 compare to 2016?
In 2018 do you expect your sales to be higher or lower than 2017?
Investment holds steady
Investments in technology totaling up to 6% of sales is a pretty standard industry figure. Our respondents don’t deviate much from that, and a minority hopes to increase its outlay from 3% to 6% over the next two years.
As a percentage of your annual sales, what has been your average annual investment in equipment, hardware and software over the last two years?
What do you expect your investment to be over the next two years, as a percentage of your annual sales?
If you plan to invest more over the next two years, tell us why?
To operate more efficiently 64.2%
Invest to stay competitive 63.4%
Need to keep up with growth 39.0%
Starting a new division 17.1%
If you plan to scale back your investment over the next two years, why is that so?
Economic uncertainty 47.4%
Lack of financial resources 19.0%
Lower sales 31.6%
Scaling back the company 7.4%
At capacity, so we have no need 28.4%
Borrowing ability stays the course
This is usually a contentious topic. But for our respondents, this year, financing seems to be a stable topic.
Would you say it’s becoming easier or harder to obtain financing for equipment purchases?
Significantly harder 7.0%
Moderately harder 12.7%
Somewhat harder 13.4%
The same 52.8%
Somewhat easier 9.2%
Moderately easier 2.8%
Significantly easier 2.1%
Reasons for investing
The most crucial reason for investing is to increase efficiencies, though almost half of our respondents say they plan to enter new markets or offer more services. That’s encouraging. As for investment choices, it’s bindery, wide-format inkjet, automation, and colour toner presses that lead the way.
Please tell us what your investment goals are for the next two years.
Increase efficiencies 59.9%
Enter new markets 48.2%
Offer more services 54.0%
Replace obsolete equipment 43.0%
Environmental considerations 11.0%
Reduce labour costs by
increasing automation 35.0%
Indicate what you plan to invest in over the next two years.
Digital infrastructure, servers, etc. 34.33%
Workflow systems 30.60%
Database management systems 18.7%
Other software 11.94%
Computer-to-plate (CTP) 6.7%
Mailing equipment 5.97%
Fulfillment and kitting 5.22%
larger than 40”1.5%
Web offset presses 3.0%
Digital colour (toner) presses 27.61%
Inkjet wide-format printer 34.33%
Inkjet sheetfed presses 5.97%
Inkjet continuous-feed presses 1.5%
Inkjet packaging presses 3.0%
Inkjet label presses 7.46%
Bindery/finishing equipment 31.34%
Digital finishing equipment 34.3%
Tell us more about your inkjet equipment investments. If you plan to invest in a large-format printer, what type are you looking at? Choose all that apply.
Dye sublimation 17.86%
Tell us more about sheetfed inkjet presses. If you are waiting to invest, can you tell us why you’re holding back?
Far too expensive
High cost, and quality is not at the level of toner-based digital print yet
Waiting for manufacturers to get to second/third generation, to get the bugs out of the first generation
They are too expensive for me at this moment
The return on investment is uncertain because the acquisition cost is high
Waiting for quality to offset and price to be lower
Are you planning to invest in a 3D printer over the next two years?
Too old to learn
Have three and there is no market to make money so will be selling 1-3
We don’t have the client base as yet as no one has asked us for any such jobs
When they start we will know the technology is truly coming into its own
No demand for it yet
Yes, but only when 3D printing becomes even more mainstream and flexible
Technology too new. Many more changes coming
We are ready, have a small one, looking at upgrading
There is a demand for 3D printing
Very useful in making small parts for my business
Seeking new opportunities
The good news is that most printers plan to expand their services. Leading the pack here would seem to be most inkjet-driven applications, as is to be expcted.
Over the next two years, do you plan to expand into new areas of business?
If yes, which of these do you plan to expand or introduce?
Packaging offerings 30.1%
Large-format services 33.3%
Textile Printing 17.2%
Special digital finishing 30.1%
3D printing 16.1%
(promotional products) 35.5%
Direct mail 17.2%
Mailing and fulfillment 12.9%
If you have no plans to expand, please tell us why
No customer demand
Upgrading remains one of the costliest advances simply because every company is just so greedy with their profit margin
Too busy right now
Too hard to get customers to pay a fair price for the service relative to the costs
We are a family business and have no desire to have employees again
Lack of money, space and time to learn new processes correctly