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Some See New Opportunity in the New Paper Trail

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Comment The Post Below...


Greetings,

E-printing is starting to play a major role in how many 
companies do business. Instead of going through a long 
process to get materials such as fliers and brochures 
printed, businesses are turning to e-printers like 
VistaPrint Ltd. to get the job done. Today we'll learn more 
about e-printing and how it might save your company some 
stress. 
   
Best,
Mandi

Be sure to visit the SoHo News and Tips blog!
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Some See Opportunity In the New Paper Trail 
By PUI-WING TAM

For Sharon Katz, producing fliers and postcards 
for her company used to be a time-consuming and 
complex job. First she had to bat around ideas 
with a designer and sort through the finished 
proposals. After that came another round of 
discussions with her printing company.

Then Ms. Katz discovered VistaPrint Ltd., an online 
printing company that allows consumers to design 
and print everything from business cards to broch-
ures through the Internet.

These days, she can create marketing materials 
herself within minutes: She chooses a template for 
the document on VistaPrint's Web site, plugs in 
her own artwork and text, then clicks to place the 
order. Within three business days, she says, 
VistaPrint sends the completed job -- usually 
several hundred pieces or so -- right to her 
office.

"I'm a one-person marketing department, so I don't 
have the resources or money" to deal with 
complicated printing processes, says Ms. Katz, 
director of marketing at Mt. Vernon Mortgage Corp. 
in Weymouth, Mass. "Now I can place a print order 
in under 10 minutes, and I don't have to deal with 
other printers and designers."

Printing has long been a fragmented process, 
requiring customers to shuttle back and forth 
between independent designers and print shops to 
get the job done. Now a growing number of 
businesses and consumers are turning to online 
printers as a one-stop shop -- where they can 
easily design and order everything from annual 
reports to letterhead stationery. And thanks to 
low overhead and new technology, the online print-
ers can offer lower prices and quicker turnaround 
times than traditional outfits.

The surging interest in e-printers is roiling the 
$126 billion U.S. printing industry. According to 
research firm InfoTrends/CAP Ventures, print jobs 
that move through the Internet made up 12.5% of 
the total U.S. printing market last year. Charlie 
Corr, a group director at InfoTrends, projects e-
printing will grow at a rate of 19% a year through 
2010.

Robert Keane, VistaPrint's chief executive, says 
the Bermuda-based company generates about $30 
million in revenue a quarter. The company went 
public in late September -- underwritten by invest-
ment bank Goldman Sachs Group Inc. -- and has seen 
its stock price more than double from the offering 
price of $12.

Its competitors are also posting strong numbers. 
Privately held Mimeo Inc., based in New York, says 
it generated $15 million in revenue in 2004, up 
70% from 2003. IPrint Systems Inc., Redwood City, 
Calif., says it has one million customers and its 
revenue is rising 65% a year, though the private 
company declined to disclose underlying figures.

Perhaps the best measure of e-printing's success 
is that traditional printers are taking steps 
online as well. For instance, FedEx Corp.'s FedEx 
Kinko's unit now provides online ordering. There 
are no design services available, as with purely 
online printers. But you can upload a fully 
completed document to FedEx Kinko's site and then 
walk through the entire order process, choosing 
the type of paper and binding, for example, in a 
matter of minutes. Customers can arrange for the 
order to be shipped to their own address or picked 
up at a FedEx Kinko's store.

"It's a dynamic market, and a lot of local printers 
are also moving into our direction," acknowledges 
Letty Swank, iPrint's chief executive.

Times weren't always so rosy for e-printing 
companies. Online printers flooded the Web during 
the dot-com boom, and many disappeared during the 
bust. The market was too crowded for so many 
competitors to survive, and even the biggest names 
were scattershot in their marketing: They tried to 
target businesses of all sizes instead of focusing 
on the niches that needed them most.

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VistaPrint, for instance, was founded in 1999, and 
raised about $10 million in venture capital. But 
by late 2000 the money was running out. In early 
2001, VistaPrint embarked on a major restructuring, 
selling off a piece of its business in Europe and 
laying off 40 of its 60 employees, says Mr. Keane, 
the chief executive.

Now "it's a much healthier market," InfoTrends' 
Mr. Corr says. And the companies that survived the 
shakeout have taken a number of steps to revitalize 
their business plans. Many e-printing companies 
have narrowed their focus to concentrate on 
particular customer segments, such as small to 
medium-size businesses, that are typically not 
well-served by commercial printers. VistaPrint and 
iPrint, for example, target companies with just 
one or two employees, such as those run by entre-
preneurs. Mimeo focuses on midsize to larger 
businesses.

In addition, many e-printers have improved their 
software and processes so they are able to aggre-
gate orders -- and use the volume to lower their 
prices and attract new customers.

At VistaPrint, for instance, the average size of a 
print order is $30. But VistaPrint's proprietary 
software automatically adds these tiny orders 
together to create one giant print run, allowing 
the company to print many small orders at once for 
a low cost. Traditional printers typically can 
print just one job at a time -- resetting the 
printing press each time for a different job -- 
for a higher cost.

VistaPrint, which owns production facilities in 
Windsor, Ontario, and in the Netherlands, usually 
charges 25% to 50% less for an order than a local 
printer, says Mr. Keane.

Easy design is also a big selling point for e-
printers. VistaPrint, for example, offers thousands 
of online templates from which customers can choose, 
to create everything from presentation folders to 
greeting cards. Each template can be customized 
with graphics, fonts and colors, among other 
options.

Mimeo, meanwhile, has created software that can be 
embedded into a user's Microsoft Word program. So 
you call up the company's templates in the word 
processor, plug your own information into them, 
and then upload them directly to the Mimeo Web 
site to order prints. IPrint offers similar 
customization services, and prints on items such 
as rubber stamps and mugs.

Along with such do-it-yourself offerings, many 
printers now provide free design services by phone. 
Many traditional printers don't offer in-house 
design, forcing their consumers to turn to special-
ized -- and pricey -- designers.

VistaPrint, for example, says it can design most 
products with a phone consultation of 30 minutes 
or less. The VistaPrint designer questions the 
customer about the product and plugs the answers 
into a template, which the client can check online 
in real time.

Some customers have mixed feelings about the 
service. Jeff Coveney, president of Boston Movie 
Tours, which takes visitors to spots in Boston 
where films or TV series were shot, discovered 
VistaPrint late last year. He says he worked with 
VistaPrint's designers to come up with a brochure, 
a free service that would have cost at least 
several thousand dollars elsewhere. Within a few 
weeks, VistaPrint sent him 2,000 tailored market-
ing pieces for less than $500.

Mr. Coveney says that dealing with VistaPrint's 
designers was very different from dealing with an 
independent designer, who typically pays more 
attention and does more customization work. 
VistaPrint's design "wasn't the quality of an ad 
agency," he says. "The experience took a little 
getting used to."

In the end, though, he says he's happy with the 
work. "I plan to use VistaPrint again in the 
spring when I'm going to redo a few pieces," says 
Mr. Coveney. "They served my needs."

--------------------------------------------------
PUI-WING TAM is a Staff Reporter of The Wall Street 
Journal. 
--------------------------------------------------

DID YOU KNOW?

Here are a few words of caution regarding Web site 
creation strategies:

* Don't ever forget that the site is a sales tool 
first and not some place to show "cool" stuff that 
does not contribute to your sales and advertising 
goals. 

* Snazzy design is important, but not as important 
as providing the information that your clients want.

* Make your site easy to follow and user friendly.

* Anything you put on your site can also be viewed 
by your competition. Don't put it out there unless 
you want it found.

* Keep page download times at 28.8 kbps speeds to 
under 20 seconds at most, if at all possible.

So what did you think about this issue? Drop me a line and let 
me know at mandi@gophercentral.com 

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Copyright 2006 PENN L.L.C.   All rights reserved. 

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