Oh Come On!

I receive my daily dose of propaganda from industry sources. Digging through twelve glowing articles about Macy's because they posted their first positive comp store sales metric in (checks notes) four years is tiring enough. 

The paper / printing / postage folks and their associated partners have made a habit in recent years of blaming you ... their customer ... for not being smart enough. It's YOUR fault that what used to be known as the catalog industry is crumbling.

Link from Midland Paper (click here).

The actual article from Printing Impressions (click here).

Oh come on. "Poor strategy costs more than postage ever will." You're blaming my clients for asking the wrong questions because the paper / printing / postage folks keep increasing costs? 

Unacceptable.

There is virtually nobody left in what used to be the "catalog industry" who speaks up. Don Libey would have spoken up. I need to speak up. The cost of paper / printing / postage is too onerous now, and it isn't your fault that it is onerous. You're still practicing the craft.

For most of what remains of the "catalog industry" (and as one of my readers tells me, there is no such thing as a catalog industry anymore), the cost of paper / printing / postage for a comparable catalog increased by between 50% and 100% in the past decade, with increases of 20% over the past three years very common. Who is responsible for that?

It sure as heck isn't my client base.

One of my favorite emails of all time came in several years ago. The source was Midland Paper. Somebody mistakenly sent something to Kevin Hillstrom instead of the Kevin intended to email. The email contained an attachment ... the document in the attachment outlined how catalog pages circulated had declined dramatically in fifteen years (at least 40% and up to 80% based on what I could decipher in the document). Midland Paper outlined how they'd constrain supply (i.e. close down mills) going forward, and with supply constrained they'd be able to charge my clients more for paper.

Is that outcome the fault of my clients leveraging "poor strategy"?

I recall another client calling me in 2022. Their printer (a major one in the Midwest) told them they were being fired after a multi-decade relationship. This brand had to find a broker to help them complete print runs ... naturally their printing costs went up.

Is that outcome the fault of my clients leveraging "poor strategy"?

On LinkedIn, an industry expert posted pictures of a wine-and-dine event in Washington, DC, trying to communicate for the 22,549th time to Congress the importance of a viable USPS. This poor guy keeps fighting for my catalog clients - even though he doesn't get paid to do that. He keeps losing. He keeps showing up.

Is that outcome the fault of my clients leveraging "poor strategy"?

I'm so frustrated by the behavior of a community that increased your costs by 50% to 100% and then possesses the temerity to suggest you are asking the wrong questions.

Increased costs transfer wealth from your brand to support agencies.

1. You are less profitable because you send your profit to support agencies. You lose out on equity or bonuses.
2. They generate an increase in net sales.

Do you understand that? Your hard-earned profit dollars are reduced while at the same time their net sales / top-line growth improves.

Here's what the value transfer looks like for a typical catalog brand with $60,000,000 of annual attributed catalog demand / net sales.

This would be a company that mails twelve times a year, about 1,000,000 per drop. Since 2023, paper / printing / postage costs increased by 25%. Instead of making $12,000,000 of contribution / variable profit before factoring in fixed costs (likely $6,000,000 or more), the company makes $9,000,000. Three million dollars evaporate off the bottom line, transferred from client profit to agency/vendor/supplier net sales.

Are my clients wrong to do anything but cut back on print expense and instead focus on accelerating their twenty-five year transition to digital marketing?

The author of the article doesn't go after ORVIS ... they cut it all! They got out. Did Orvis ask the wrong questions?

No, Orvis did just fine. The article author and Midland Paper (who published this sample of the article) goes after you ... the very brand still doing what they want you to do. You're paying their bills (Orvis no longer is), and they suggest you are asking the wrong questions.

You are not asking the wrong questions. 

Standing up for you will cost me business. Doesn't matter.

You simply cannot accept the ad cost increases via paper / printing / postage that are causing p&l challenges.

I'm not done. More tomorrow.