As perfect as it sounds, however, some have warned that this arrangement does not in fact cut your costs as significantly as you might think, while others suggest the B2B2C model is flawed by the detachment of the printer from the end-customer. A third view is that shunning B2C’s high margins for an easier time in B2B2C is short-sighted. B2B2C may not be, then, the consumer print salvation some assume.

When talking about consumer print, it is important to note that the sector does not start and end with photobooks. Photo-books are admittedly the growth area everyone wants a piece of, but photo gifts like key rings, canvas prints, calendars and mouse mats, alongside non-photo gifts like prints and posters, are just as buoyant. As a whole, it’s a massive market and one not yet saturated, so printers are obviously trying to get involved.

"It was clear to us that in the B2C space you had a market of millions of people wanting consumer print products and obviously we wanted to be part of that market," explains Steve Hallett, managing director at general printer Repropoint.

With the advances in web-to-print software and increasing availability of cheap ecommerce platforms, the B2C market is arguably more accessible to printers than it ever has been, yet almost immediately Hallett encountered problems, the main one being financial resource.

"The market is dominated by big brands with big budgets, like Tesco or Photobox," he says. "You have to have financial resource to make a success of B2C, but at the price you are selling at, that cost becomes very hard to justify unless you are one of the massive companies that are dominating that space."

Gary Peeling, managing director at print services provider Precision Printing, encountered a similar issue, but would add a skills gap to the problems facing printers heading in the B2C direction.

"Brands that were already active in the space when we looked at it in 2006 had both scale and funds beyond our means in terms of marketing," he explains.  "But, also, a key principal that has stood us in good stead is ‘stick to your knitting’ – we are a B2B company, we have little experience of dealing with consumers directly, neither from a customer-service nor a marketing point of view."

Team up with a retailer
Both companies therefore opted to pursue a strategy of B2B2C – linking with a retail partner that would handle the marketing and customer-service side of the operation, leaving the printers to concentrate on order processing and production.

"The best analogy I can give for this," says Peeling, "is that, in American football, you have the quarterback and that is the online brand – it gets all the money, publicity and girls. But, in order to have a winning team, you also need a receiver, in this case, the printer. Although not as glamorous, the receivers are still well paid and are just as important. It works for us extremely well."

He says it is an arrangement as beneficial to the retailer as it is the printer, mainly because of the nature of the B2C print market.

"The peaks are extreme," he explains. "If the retail companies did try and do everything in house, they would only be utilising the kit in the peak periods – around 20% of the year. Obviously, that is not a sustainable position. As a commercial printer, as well as a B2C printer, those dips in demand are less troublesome for us."

Lucas Lepola, co-owner with his wife Hayley of online art prints, postcards and printed tea towels retailer Keep Calm Gallery, certainly agrees that the B2B2C model is beneficial from his side of the operation. While he would obviously get more margin if the gallery handled the print itself, Lepola explains that going solo was neither cost-effective nor practical.

"It would be great to have the flexibility of producing all of these products in-house, but we use everything from letterpress to litho, from giclée to screen printing; to buy the equipment would cost a huge amount and to gain expertise in all of these media would take a lifetime," he explains.

He adds that if the partnership is a good one, then it is possible to "build a long and mutually beneficial relationship with the printer", a sentiment echoed by Peeling, who explains that these arrangements tend to be very secure as there is a mutual need for each other’s services.

However, this form of partnership is not necessarily something every printer could enter. Lepola says that, while quality is the key attribute of a print provider, communication comes a close second. The latter requires either a high degree of automation in order progress reporting or a printer with bags of time on its hands – the former costs money and the latter is very unlikely.

 

Choose partners carefully
Kevin Rogers, UK managing director of global print services provider Elanders, which produces consumer print products alongside its other print services such as packaging and POS, adds that the printer also has to consider carefully with whom it partners.

"When we were searching for partners we were looking for a business that was catering, or would be catering, for a customer that fitted our product offering – things like price point and scale – and so we did extensive profiling of potential partners. We didn’t get it right every time, but we now work with six partners in the UK that we feel match our products and our business."

The latter is particularly important, as Peeling explains that to get into the B2B2C market on a meaningful scale requires more investment than printers perhaps realise. He says that for a full-scale service, the print production has to be of a level to produce the massive short-run volumes required in the market, while printers also need the financial resource and the expertise to provide sophisticated system integration. Rogers agrees, stating that Elanders stitches in its production workflow to all partner websites. 

"When the orders are of lower frequency you can deal with them in a more manual way, but that is only sustainable for so long," elaborates Peeling. "If the business is to grow, then workflow and specialist finishing need to be addressed. To do our job properly in the consumer market, we had to develop a workflow solution called One Flow, scripted by our own developers. This enables us to connect our plant to any number of clients in a fully integrated process that allows us to receive, process, batch, track and schedule orders in real-time without manual intervention. In addition, we have six systems analysts who constantly work on our workflow solution and supporting integration with clients."

He reveals that the software development cost around £400,000, a substantial amount if you are to share the proceeds it brings with a partner. This is one of the reasons why Elanders is moving increasingly to a B2C model and away from the B2B2C strategy and why others may follow.

In the UK, Elanders has six B2B2C partners, and globally it has more than 20. It also sells photo products directly to consumers. While, at present, the B2B2C work represents the higher volumes, Rogers says that B2C is where the company would ideally like to position itself in the main.

"We would like to see our volumes shift more to the B2C side as that kind of work is the better long-term prospect for the business," he reveals.

To go some way to facilitating that, Elanders recently purchased one of its German B2B2C partners, Deutsche Online Medien and its photo gifts brand Fotokasten. This acquisition transfers a B2B2C relationship to a B2C operation for the company, giving access to higher margins and also, according to Rogers, a more secure route to market.

However, ditching B2B2C for B2C is not an easy task. Royal bookbinder and photobook producer Blissetts sells print products directly to consumers, and managing director Gary Blissett warns that printers expecting a fast return on the extensive investment needed to make the move a success will be disappointed.

"There is a lot of cost involved in going B2C, and it is not a quick return on investment," he explains. "You do eventually get that return on investment, but you have to have the attitude that it is not just about profit, and that quality and customer service are just as important."

For that slow return to be viable, you need to have a certain degree of financial security and, for that reason, Rogers believes that without the extensive financial resource of a company like Elanders, moving from B2B2C in favour of B2C may not be a wise move.

"My personal opinion – and I could be proven wrong – is that smaller companies would find it very difficult to go B2C because of the investment required in technology, marketing and ongoing development spend in both areas, alongside the cost of customer support," he says.

Lepola disagrees in part, as he says there are affordable routes to market for smaller-scale print operations. He explains that hosted platforms from the likes of Etsy and Big Cartel offer a low-cost route into B2C for printers willing to keep production levels relatively low. He admits, though, that there is no cheap fix for customer service costs, as any scrimping on that side means you "won’t last long, no matter how good the product is".

Customer service has to be direct
It is customer service rather than financial considerations that Blissett believes is the main factor in favour of B2C and against the B2B2C model. He argues that to offer true customer service, a printer has to have a direct relationship with the client. Although Blissetts has sophisticated creation software for its products, as well as extensive tutorial notes and videos on how to use it, he says that customer service whereby knowledgeable people can talk the consumer through bindings, colours, papers and other variables is still essential to the B2C offering. 

"I think it would be very difficult to sell through a partner," he explains. "To impart the knowledge needed about the product – even to new members of my team – takes quite a few months, so, to think that a third party could manage to have those conversations knowledgably about the ways a book could be bespoke right down to the binding seems very difficult to me. We would have to dumb down our offering if we had to go through a third party and that is something we really do not want to do."

Blissetts is perhaps a unique case, however, as its high-end offering represents a niche area of a market dominated more by the sort of work handled by Precision Printing and Elanders – products with fewer variables delivered to tight turnaround times (see page 18 for more on bespoke consumer solutions). Here, the customer service elements largely revolve around progress reports and fault reporting in real time and Peeling says that, if the printer has the right software systems in place, then the B2B2C model works perfectly for this level of customer demand. He adds that this is just as important to his clients as being able to choose a particular paper weight is to Blissetts’ clientele.

"We realise that, for our clients’ clients, what we are producing are highly emotional products. Photo products, greetings cards – these things have to be handled with great care and attention," he says. "It is important that we can provide real-time updates to how those orders are progressing as a result."

The issue of customer service is just one of many demonstrations of how difficult a market to unpick consumer print is for any printer looking to move into this area.

It gets even more complicated when you consider the future potential of the markets for B2C and B2B2C printers. Elanders clearly believes that there is fertile ground in the B2C arena and Blissetts is certainly making a success of its operation in that area. Peeling, though, is certain that for the printer willing to adapt and invest, B2B2C presents a significant potential business arena.

"There are newcomers to the market popping up all the time and it is very unlikely any of those start-ups will invest in their own production, so the opportunities are increasing for printers to step into the consumer space as a supplier," he says. "Also, this is now a global business and you have a lot of brands from the EU, US and Asia who are looking to get into outside markets, including the UK and so there is opportunity there for UK printers to provide the production hub for this country."

Whatever the arguments of future potential, it is clear that, if you want to go into the consumer print market with any real impetus, whichever strategy you choose, investment is crucial.

For smaller-scale operations, consumer print production is not going to break the bank, but, if you want to scale up, then whether you go B2C or B2B2C, you will have to spend some serious cash.

At present, B2B2C with its lower costs and reduced competition seems to be the model of choice for getting into the consumer market, but it has its flaws and Elanders and Blissetts have shown that B2C is still a viable option for those who have the financial resource to try it.