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Fund and Find Success

How to Make Money with a Flatbed

 

By Kim Crowley

 

Print service providers (PSPs) with a flatbed printer have the advantage of producing large-scale graphics and multi-up projects directly to the substrate of their choice, with decreased finishing requirements. These devices print wider and with great throughput, without outsourcing to another provider. PSPs not only make additional money for themselves when they bring flatbed work in house, they also develop a tighter rein on quality.

 

A flatbed printer is an investment—the lowest starting around $50,000 and climbing past the half-million-dollar range. PSPs must weigh present and future needs to substantiate a flatbed purchase.

 

Shops investigate payment options, manufacturers’ service records, and the type and amount of work needed to rationalize the purchase. Ultimately, PSPs must find the correct flatbed to fit their business and employ strategies for generating profit.

 

The Investment

There is a flatbed printer in the market to address every print shop’s needs and goals. “A polarization of the market in recent years is driving demand for flatbed technology in high-, low,- and mid-volume categories,” says Ken VanHorn, category manager, Hewlett-Packard (HP) Scitex Americas. HP’s broad portfolio enables PSPs to choose a printer with a price-to-performance ratio that is right for them.

 

Flatbed printer buyers fall into two main categories—those looking to bring in once outsourced large format jobs or just entering the space, or those with a good base of large format work already in place looking to add to an existing flatbed portfolio.

 

New venturers can begin with a small investment in flatbed print technology. They select from low- to mid-range priced machines that provide common flatbed benefits and proven quality, while sacrificing slightly on throughput. The minimized throughput is typically not a challenge, as most of these buyers don’t experience large volumes of incoming flatbed projects in the beginning.

 

Mutoh America, Inc. offers entry-level value with its ValueJet 1608HS hybrid printer, which features a starting price of $49,995. Considering the price and the hybrid capability of the ValueJet, “normally, a print provider would need to produce a lot of rigid signage, but since the hybrid prints on both rigid and roll-to-roll substrates, it acts as a multi-purpose printer that works for almost all signage,” states Michelle Pugh, marketing coordinator, Mutoh.

 

A few vendors offer printer selections that range from low duty up through more robust and featured, with corresponding price points. EFI offers its low cost of entry Rastek line at about $100,000 as well as the advanced, heavy duty VUTEk flatbed printers with price points up to $649,000. EFI also allows current customers to trade in EFI printers for a newer device as needs evolve.  

 

Similarly, Océ North America offers a broad family of printers ranging in price from less than $80,000 up to $500,000, including an integrated print/cut workflow.

 

As technology evolves, shops upgrade to more advanced machines and some sell off or trade in used equipment. This provides another option to those considering adding a flatbed printer. “The used flatbed market has an abundance of machines that still produce more than sellable equipment,” mentions Roy Pagan, manager, large format division, Classic Graphics.

 

Ivey Performance Marketing of Portland, OR, has over 20 years of experience in the print industry, digitally producing banners, posters, and wall graphics. The shop uses an EFI VUTEk PressVu and a new 98-inch Agfa Graphics :Jeti 1224 HDC FTR, operating its presses 16 hours per day.

 

The Agfa flatbed added to Ivey’s high-quality work and quick turnaround times. “We invested in the flatbed because of improved quality, faster throughput, and lower cost,” shares Bill Patten, VP operations, Ivey. Patten says that a print provider should evaluate the type of work they are doing and the margin to substantiate a new flatbed printer purchase for their shop.

 

“Typically the higher priced units are purchased by shops that already have a good amount of work and are buying new equipment that is the latest technology or offers greater throughput because their business has grown,” says Ted Lewin, director of sales, North America, Integra Technologies International, Inc.

 

Even still, the industry has experienced price-performance improvements in recent years. “What was once a $300,000 productivity class product is now priced between $100,000 and $150,000,” notes VanHorn, adding that, “with broader access to the technology and a lower barrier of entry, PSPs need to further differentiate themselves with value-added services and products—offering design, mounting, and installation or with innovative products printed on specialty materials.” 

 

A flatbed purchase most often requires complementary equipment for finishing; including cutters, welders, and laminators. “If you have a flatbed you must have routing capabilities. With our recent Océ Arizona 550 XT flatbed purchase, we made upgrades to our routing capabilities and workflow, which allowed us to better utilize all the features and capabilities that the new flatbed has to offer,” notes Glen Fairbanks, VP of operations, DGI-Invisuals.

 

Bringing It In House

Classic Graphics’ foray into large format printing began in 2005. Initially the Charlotte, NC shop outsourced work through an outside screenprinting service, but after two years the value of bringing large format work in house became very apparent.

 

The shop’s equipment investments include an HP Scitex TJ8550 printer with an inline Fotoba International cutter, HP Designjet L25500 printer, HP Designjet Z6100, and a brand new Durst Rho 900 flatbed printer from Durst Image Technology US LLC.

 

Complementary finishing devices include a new Advanced Greig Laminators, Inc. 64i laminator, a T-100 fabric welder from Miller Weldmaster Corporation, and a Zünd America, Inc. L-3000 digital die-cutting finishing device.

 

Sales have grown about 40 percent in the four years since Classic Graphics brought large format work in house. “It allowed us to do business with not only new companies, but new departments within our existing customers,” shares Pagan.

 

The company produces direct to board work in both short and long runs. The shop runs two eight hour shifts with four employees presently, and set a goal of running a 24 hour shift by the final quarter of 2011.

 

Pagan says that any print provider can justify and profit from a flatbed purchase, and they don’t need to start by spending $500,000. “Starting small and getting your feet wet is the easiest way.”

Adding Throughput

 

DGI, located in Burlington, MA, delivers unique large format digital printing, graphics, and photo imaging with over 15 years experience.

 

The shop uses an EFI VUTEk PressVu 200/600 UV flatbed to print retail graphics, self-standing displays, point of purchase (POP), window graphics, directional signage, trade show graphics, exterior signage, and specialty substrate requests. Equipment runs approximately 12 hours a day, however, at times DGI runs around the clock, depending on workload.

 

DGI recently purchased an Océ Arizona 550 XT hybrid flatbed to upgrade its capabilities and offer clients superior quality and additional throughput in a reasonable-sized footprint.

 

“All of our equipment decisions are made in an effort to provide clients with the best possible image quality in a timeframe that works for their needs,” states Fairbanks. The Océ Arizona 550 XT runs two four- by eight-foot sheets of media simultaneously or substrates up to 96x120 inches, maximizing throughput.

 

In DGI’s case, it added a high-end, high-productivity flatbed printer to support and boost incoming work. Fairbanks explains that ROI can be calculated in several ways, but sometimes it goes beyond the numbers. “We needed to add new clients along with providing existing clients with a higher quality print in tighter timeframes. Sometimes we need to be reactive and proactive at the same time. That was the scenario that substantiated the upgrade of our flatbed capabilities,” he says.

 

Digital and Offset Additions

A new 98-inch Durst Rho 900 flatbed was recently installed at The Meyers Printing Companies, Inc., based in Minneapolis, MN. Despite the weakened economy, Meyers is making significant capital investments in business. The company’s overall investment in equipment and software this year will approach 10 million dollars, with the addition of other devices, which include 65- and 81-inch litho printers from Koenig & Bauer AG (KBA) and a Zünd cutter. “We’ve remained profitable even during the economic slowdown by adding to our business and experiencing a steady sales growth,” says Mark Dillon, VP, Meyers.

 

In business since 1949, Meyers operates out of a 183,000 square foot building with three divisions—retail market, card group, and label group. Meyers’ retail group is engaged in appealing to shoppers with POP work, signage, and dimensional displays, as well as designing and prototyping permanent displays. It is this group in particular that works with flatbed printers.

 

A new Durst Rho complements Meyers’ existing EFI VUTEk flatbed, adding increased size and eight-color technology for accurate, high-quality corporate color reproduction and flesh tones as well as fine line printing.

 

The decision to purchase new equipment comes as Meyers takes a hard look at the numbers. “We look at what we would have to sell based on the cost of the equipment, and if we think the market will sustain that. We have some idea of what we can charge and what the market is willing to bear. It’s a matter of crunching those numbers,” says Dillon.

 

Meyers looked at numerous combinations of equipment investments—in some cases keeping just to digital presses and alternately looking at litho. Ultimately, buying the Durst digital and the litho KBAs made the best sense.

 

“The digital presses have gotten much faster, allowing for quantities in the hundreds,” says Dillon. Meanwhile, “the litho presses have become so efficient, with the makeready on them faster with all of the computer controls. It doesn’t take as much time to set up the press, so the gap between litho and digital has narrowed,” explains Dillon.

 

Parallels can be made in other market segments as well. Dillon says the company is experiencing a similar bridge between digital and litho in its narrow format label business.

 

Opening the Wallet

Flatbed printer manufacturers sell from a variety of channels with varied purchase options. There are direct sales and third party avenues to be explored. A variety of lease and finance possibilities are available and some vendors allow trade ins as well. CET Color accepts purchase orders, as well as trade ins. Most of their accounts lease, but CET does self-finance on occasion.

 

HP offers HP Financial Services, but customers have many options beyond this, including their bank or other leasing services, says VanHorn.

 

Mutoh revamped its leasing and financing, with new programs, including an online leasing option.

 

“Outright purchase is the best, but that takes cash,” states Bill Grambsch, sales manager, Polytype America Corp.

 

Integra’s Lewin agrees that most people prefer cash transactions due to the finance industry’s current state. “Interest rates are still favorable, however credit remains tight. A lot of financial institutions require personal guarantees that most people are reluctant to supply. The issue that needs to be addressed is whether to protect a cash position with a lease or bank loan, or potentially pay the equipment off faster with a cash transaction and protect credit lines,” he suggests. Integra offers flexible leasing and custom payment plans.

 

Grambsch adds that bank financing offers more flexibility than a lease for early buyouts. Polytype partnered with Danforth Capital for customer leasing needs.

 

Making a Profit

How do PSPs justify their flatbed purchase and make money after such a large financial outlay? A shop needs to have enough incoming print work to meet or, hopefully, surpass its monthly payment on its equipment.

 

“The typical breakeven point—the point at which a print owner has made enough money to pay the monthly payment—in an 18 day work month is measured in a few hours per day. The variation is based on the type of work produced and speed and cost of the printer,” acknowledges Mike Wozny, strategic marketing manager, EFI.

 

Consider the work transferred over to a flatbed and completed in less time by printing direct and eliminating some finishing; the work brought in house rather than outsourced; and the additional work that can be claimed as well. With that in mind, “Océ can show customers printing two to three hours a day, five days a week, an ROI in less than 120 days,” states Rodney Mucenski, VP sales display graphics, Océ.

 

CET’s flatbed printers start at just about $80,000. With that price point in mind, “any customer who prints and mounts 1,000 square feet per month of vinyl can justify the purchase of our printer through the ROI,” according to David Cich, VP of sales and marketing, CET.

 

Fund and Find Flatbed Success

There are true, measurable benefits to buying a flatbed printer. A PSP can bring in previously outsourced work, extend the offerings to new substrates and projects, and eliminate waste and labor associated with mounting.

 

An entry-level flatbed fits the bill for those just starting out. Higher duty, more robust options fit with established shops whose current flatbed workload demands more capacity.

 

It’s not a purchase made lightly. PSPs leap when they know their workload will be easier to handle, grow exponentially, and be more profitable with a new or additional flatbed printer.

Click here to view the Make Money with Flatbeds Target Chart - an all-inclusive information resource!

Jun2011, Digital Output

 
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