On the Lookout for Labels

Observant distributors never know where they'll discover their next application.

BY JONATHAN ROLLINS

It's a weekly ritual for many people-wandering through grocery store aisles, inspecting produce for signs of ripeness, sniffing around the seafood counter in search of freshness. But Mike Lord follows his own ritual when he steps into a supermarket. He looks for labels.

"If you see a label kind of half stuck on anywhere, take a look at it, because those problems can be fixed," says Lord, president of Source 2000 Inc., a distributorship in Albuquerque, N.M. "Labels are a part of that company's image. And if their image is bad, they're not going to come across well to the public."

Lord strolled into a grocery store one day and noticed a product packaged in plastic wrap and stored in a cold case. The ink on the labels was smeared, and the labels were coming off because of the cold and moisture. And the labels weren't just for looks-they were being used to hold the plastic wrap together. As the labels lost their grip, the packaging began unwrapping. "I decided to call up the company and say, 'I think we can make your product better,'" Lord says. "They were very interested."

Source 2000, which does 20 to 25 percent of its business in labels, began gathering different label materials and testing them. "We splashed water on them and did everything we could to simulate what would happen to them out in the real world," Lord says. The distributorship and its client chose a plastic synthetic material that is waterproof, then added a UV varnish to protect the ink from moisture. The material was complemented by a very aggressive adhesive.

Next, Source 2000's graphic artist redesigned the label's graphic elements, including the customer's logo, to attain a more balanced look. The font used for the label's text was changed, making product information easier to read. A UPC bar code also was added. The labels, which were printed in two colors, now are printed in 4-color. "I don't know if I can take credit for increased sales of the product," Lord says, "but it looks a lot better than it used to."

After Source 2000 provided the 31/2-inch circle labels, the client asked the distributorship to handle three other labels. Currently, Source 2000 provides approximately 100,000 labels to the customer each year. "It's pretty easy for a forms distributor to look for this business," Lord says. "Just be aware of potential label applications around you. I'll see something and jump on it."

Katie, Bar (Code) the Door Labels make up between 35 and 40 percent of business at Beacon Forms & Labels Inc., Jackson, Mich. A significant part of the distributorship's label sales growth, says President Roger Kuhl, comes from "trying to catch up with the bar code market. That's really the trend in labels." Beacon further capitalizes on that trend by also selling ribbons for bar coding.

Kuhl sells a large number of bar coded shelf labels and warehouse labels to distribution companies. One such company distributes candy and tobacco products to stores and resells the shelf labels Kuhl provides. Beacon supplies 40,000 sheets of shelf labels (50 labels per sheet) to the client every three months. The labels include a yellow strip where the distribution company prints the name of the product and a white strip where it prints a bar code.

While the bar codes were essential, choosing the right label material and adhesive was just as important. Kuhl steered the client toward a vinyl material because of its durability. Because of the vinyl, the distribution company's clients don't need to buy plastic strips to place over shelf labels as protection against wear and tear. "You don't have to replace [the vinyl labels] as often," Kuhl says. "If you have to re-label a store, that can take a while. But you can even wash these labels with a cleanser." Vinyl is also a good choice for the application, Kuhl says, because it burns in the bar code well. While the label material was chosen for its toughness, a removable adhesive was used so residue wouldn't be left behind whenever re-labeling was necessary.

Bar code labels have been a major boon to business at Express Business Forms & Systems Inc., Framingham, Mass. But the distributorship does more than provide the labels. It has carved out a niche by offering on-demand bar coding of labels in-house.

One of the distributorship's clients is a firm in the textile industry that stores rolls of fabric in its warehouse to send to upholstery stores. But the client was having a problem. When a picking ticket was sent to its warehouse ordering a particular fabric, the wrong fabric often would be cut. "And if it's cut wrong," says David Moses, president of Express Business Forms & Systems, "it's a waste."

The distributorship set out to solve the client's problem. The first part of the solution was a combination invoice/packing slip that incorporated a 53/8 x 2-inch address label, four 25/8 x 2-inch product ID labels and a 53/8 x 2-inch COD label. The invoice/packing slip already was in the works, but then Express Business Forms & Systems came up with an innovative improvement-a cutting ticket with 12 labels that contain the product ID number and a Code 128 bar code.

Now, the client sends Express Business Forms & Systems order information via EDI. The distributorship, which stores 1-ply cutting tickets made of card stock in its warehouse, prints bar codes for the tickets' labels on demand. The cutting tickets are sent to the client's distribution facility the same day and matched with the rolls of fabric being received by the client. When an upholstery store places an order for fabric, the client generates one of the bar coded invoice/packing slips, which follows the product from picking all the way through to billing.

When an employee picks the fabric indicated on the invoice, he scans the bar code generated by the textile company on the invoice/packing slip and then scans the bar code generated by Express Business Forms & Systems on the cutting ticket. The picker will not cut the fabric until he has scanned matching bar codes. "We've greatly reduced their waste at the warehouse level," Moses says. The distributorship provides 300,000 picking ticket/invoice combinations and up to 200,000 cutting tickets to the customer annually.

Leaving Behind the Label Lemmings
As labels become more commonplace, distributors realize the need to differentiate themselves from competitors. "Be innovative," says Debby Kimball, president of Label Services, a Richardson, Texas, distributorship that specializes in labels. "You can't be a 'me-too' label company and get the business. Customers are counting on us to be experts. For example, a lot of clients don't want to design labels themselves. They really want someone who can come up with ideas for them. Research and design is really my specialty with these customers."

Kimball, who worked for three label manufacturers before starting her distributorship in 1986, recently designed a label prototype for an industrial client that sells to the airline industry. The client's engineering department contacted her because it wanted something unique. Although the permanent acrylic adhesive labels will be used to identify machine parts, Kimball says the client wanted a label that is promotional, as well as functional. Label Services received artwork for the label via email and designed a custom die for a dome decal label that measures approximately 1 x 3 inches with an arc at the bottom. The client's 1-color logo is printed on white vinyl underneath the dome. "[The dome decal label] is a unique look for them," she says. "This label is more of an advertisement-something different you can do with a label."

While it worked well in this instance, a dome may have been too flamboyant for other industrial customers, Kimball says. That's why bringing creativity and a customized approach to label sales is so important, she says. "I just wait to see what each customer's needs are and fine-tune what I think will work," she says.

Unless you choose customers wisely, Kimball says, selling labels at a profit can be a challenge, partly because of their versatility. "Labels are so diverse that anyone can use them," she says. "The key is to find the account that is going to use them repeatedly instead of just one or two times." The best label clients usually are companies that manufacture a product, Kimball says. But because manufacturers in every industry are looking for ways to trim vendor lists, she says, it's important for distributors to act as label consultants who can provide ideas rather than stock products.

It's also important, Kimball says, not to overlook the special needs of any niche you target. For example, Label Services sells calibration stickers to several clients. The labels are made of a 2 mil white polyester material, overlaminated with a clear matte finish. The special material allows technicians to write information on the labels, but it also has to stand up to a cleaning machine. The adhesive also must hold up to the machine, but needs to be removable so residue isn't left behind when another calibration reading is needed.

Label Lessons
Customers used to be willing to wait a reasonable amount of time for label orders to be processed, but quick turnaround times are now in demand, even for tricky label products. A supply company asked Beacon Forms & Labels for a rush job after realizing it needed a bar coded label that would adhere to a plastic container.

The requested label size would have required a special die, Kuhl says, costing more time and money. Instead, after talking with the customer, the distributorship redesigned the label specifications, reducing the label's width by an eighth of an inch and its length by a half inch to make it a stock size. Beacon Forms & Labels was able to get the 1-color static bar coded labels with Arabic numbers and permanent adhesive to the client in a day.

Follow these other tips for bountiful label sales:

• Keep your eyes open. Many distributors head straight to the purchasing department's offices when they want to sell products. "That's the last place you want to go for labels," Lord says. Distributors should either look at clients' existing label applications, build relationships with the users and find out what revisions need to be made, Lord says, or look around for systems crying out for labels. "You'll see pieces of paper stuck on things with Scotch® tape or marked with magic marker," he says. "That's where you can ferret out new label applications."
  
  
• Make labels interactive marketing tools. Labels usually are designed purely for informational purposes. But don't forget their potential as marketing tools, Kimball says. She provides piggyback coupon labels for retail customers. The top ply is printed in 4-color process with a blurb or teaser such as, "Redeem now." This ply can be peeled off, and the other side serves as a redeemable black-and-white coupon with a bar code. The bottom ply also is printed in 4-color process and includes an advertising message.
  
  
• Be alert to adhesives and materials. "The most challenging part of label sales is making sure the label you're getting your customer is going to do what they want it to do," Kuhl says. Many of these potential problems can be taken care of by asking probing questions about what the label must adhere to and what conditions it will be subjected to. For instance, Kuhl is working with a client that makes hospital-specific furniture out of plastic tubing. But without questioning its use, he wouldn't have known that the label would be directly exposed to water. The furniture is used to roll stationary patients into shower facilities, so the label likely will be made of Mylar®, Kuhl says.
  
  Lord reminds distributors that labels exposed to the sun are likely to fade without a UV finish. One of his clients is a real estate firm that previously bought labels directly from its national parent organization and applied them to signs that sat outdoors. However, the organization didn't have much label expertise, and soon the labels faded.
  
  But no matter how well you pepper customers with questions, be prepared for surprises. After questioning its client at length, Express Business Forms & Systems provided labels to a customer with several warehouses. The customer neglected to mention that one of its warehouses was not climate-controlled. "We ended up with 40,000 labels falling off the boxes and sticking to the floor," Moses says. "That was a disaster."
  
  
• Be a student of the game. To avoid other horror stories, "Test the label," Moses says. "It goes back to making sure you use the right label type and the right adhesive type." When you're trying to sell labels, he says, it also can help to get samples and test them at the customer's facility, on the customer's equipment so they feel comfortable with the choice. Also involve label manufacturers in the process of picking adhesives and materials.
  
  
• Let others testify on your behalf. One of the most effective marketing strategies for selling labels is asking customers to write testimonials you can show to prospects, Lord says. If a written word seems hard to come by, encourage prospects to call label customers who you provide service to, he says.
  
  
• Don't proceed without a John Hancock. Kimball has a rule she follows for every label job. "Get the specifications in writing," she says, "because labels can be subjective. And people see color differently, so get customers to sign off on PMS colors, too." Label Services has designed its own spec cards and has customers sign off on them before sending the job out to be printed.
  
  
• Keep an eye to the future. "I lose a lot of sales that are vanilla, generic labels," Moses says. "I try not to go after customers that aren't going to need my services down the road. I think the most important thing is to give the customer more than what they think they're looking for." Express Business Forms & Systems concentrates on value-added services that complement its labels sales, including on-demand bar code processing, design services and testing services.

Jonathan Rollins is managing editor of FORM Magazine.

A Demand for Value-Added Service
When David Moses started Express Business Forms & Systems Inc., he quickly identified a void the Framingham, Mass., distributorship could fill for its label clients. "We had customers who needed bar coding on labels and were trying to have the processing done by manufacturers," Moses remembers. "But turnaround time was one to two weeks. So we decided to set up an on-demand system."

Today, Express Business Forms & Systems still purchases label stock from manufacturers. But it prints bar codes on demand with five in-house impact printers. The distributorship stores a variety of continuous labels and label/form combinations in its warehouse and can turn orders around in a day. Currently, Express Business Forms & Systems processes 100 to 150 orders per day. It also markets the service to other distributorships.

The service appears to be a perfect fit as the popularity of bar code systems soar. "Before," Moses says, "our customers may have only tried to identify the racks in their warehouses instead of every item on those racks. But now, everything is being identified to cut back on error." One of Moses' main targets is information systems departments, because bar coding and labels often are integrated into data collection systems.

Today, labels make up approximately a quarter of Express Business Forms & Systems' sales, and on-demand processing makes up another 20 percent. The distributorship has experienced double-digit growth as it fine-tunes its niche. And Moses expects to keep riding that surge.

"The market will continue to grow," he says, "because people want to collect as much information as possible. And the way to do that is to label and identify everything. And if they're identifying products, they don't want any problems with that. Once they get [a distributorship] on board with that, they want to build that partnership. They want to capture the data. So we offer the value-added service."

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