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RedTagPrintSale.com Has Some Franchise Print Networks in a Tizzy

I was recently contacted by a senior executive in one of the well-

By Cary Sherburne
Published: May 27, 2010

I was recently contacted by a senior executive in one of the well-known print franchises, who brought a new online printing service to my attention.  Called Red Tag Print Sale, the site is a B2C online printing service operated by 4Over, an online printing service to the trade that has positioned itself as supporting the trade only.  The concern is that this venture into the B2C world takes 4Over out of the trade printing business and puts the company in the position of disintermediating printer relationships with customers and actually competing with its own customers.  I spoke with Varaz Gharakhanian, Director of Marketing for 4Over, to hear their side of the story.

While Gharakhanian is quick to point out that the online print business has been around for 10 to 15 years, he believes what Red Tag Print Sale represents is a revolutionary idea that can bring business back into 4Over’s network of print resellers.

Here’s how it works:


  • The service is available only to certain 4Over customers who qualify based on a customer loyalty evaluation that stratifies the customer base into five groups based on the length of the relationship with 4Over, frequency, volume and other factors:  Associate, Premier, Premier Executive, Admiral and President.  Only the top three classifications qualify.

  • A qualifying printer can join the network at no cost for the first three months, with a subsequent $300 monthly membership fee.  Gharakhanian indicates these funds will be allocated to continuing development of the site and marketing, at least matched by 4Over, with 4Over most likely adding more than the accumulated membership fees to the pot.

  • When an order is received, 4Over determines the closest member based on the zip code of the order.

  • 4Over produces and ships the order at wholesale, collects payment and pays participating print service providers retail profits monthly. 4Over also provides all contact information to the print service provide who can then follow up personally with the end customer.

  • Members are given a special, customizable code they can use to promote the program in the course of their advertising efforts, whether it is local TV, local sports team programs, or any other advertising/marketing initiative they care to use.  This code offers a 10% discount to the end buyer, and guarantees that job profits go to that specific printer, regardless of where the order originates.


Gharakhanian asserts that in no way is this intended to take customers away from existing 4Over clients, but says that it actually benefits print service providers, who have been losing business to online services, giving them an opportunity to recoup profits and establish new relationships or revive customers who have defected. (A Google search on business cards turned up 94 million hits, with VistaPrint at the top …).

Resellers are brokers, print service providers, and graphic designers who sell directly to end users.

Objections to this model from within the printing industry, particularly franchise organizations who do a significant amount of business with 4Over, revolve around the perception that Red Tag Print Sale is nothing more than VistaPrint and is a breach of confidence between 4Over and its customers, in fact, perhaps causing a loss of customers rather than an increase in business.  One person I spoke with asked, “what happens if there is a Sir Speedy, an Allegra and an AlphaGraphics in the same zip code?  How do they choose who gets the business?”  Another said, “This is just a way for 4Over to have its cake and eat it, too.”

I understand there are discussions ongoing among these parties and with 4Over. Many of the objectors also successfully worked to reverse Adobe's decision to remove the "Print to Kinko's" button from Acrobat, and to get HP to change direction on MarketSplash.

One thing is clear:  4Over needs to spiff up its marketing message to more accurately portray the service.  This may not prevent a coalition from taking market action, as happened in the Adobe and HP situations, but at least they would have all of the right information on which to base their decisions.

This will be an interesting process to watch, and we will be following it closely.

Following publication of this post, 4Over requested two corrections, which should be noted by our readers:

“I would like to point out two things. First 4over does not operate the site, Red Tag is separate. Secondly, Red Tag determines which 4over reseller gets the customer based on zip code, not 4over.”

Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries.

Cary Sherburne is available for speaking engagements and consulting projects. To get more information contact us.

Please offer your feedback to Cary. She can be reached at cary@whattheythink.com.

 

Discussion

By Cary Sherburne on May 28, 2010

Following publication of this post, 4Over requested two corrections, which should be noted by our readers:

"I would like to point out two things. First 4over does not operate the site, Red Tag is separate. Secondly, Red Tag determines which 4over reseller gets the customer based on zip code, not 4over."

 

By Dennis Beck on May 28, 2010

Whatever way this is looked upon if is clear that 4over is selling trade thru the front door and retail thru the backdoor. Bad business practice-no matter how you attempt to explain it. Prudence tells us to deal with a trade printer who is EXCLUSIVE TO THE TRADE. No reason to have to look over your shoulder all the time.

 

By Leroy Comier on May 28, 2010

It's funny because they are going to give 'key" resellers commission based on zip or they have to use a promo code. Good Luck keeping commissions straight... lol

 

By Tom McCloud on May 28, 2010

Amen Dennis.
I'm sure they have done a lot of educated research on this, but it sure looks like a major gamble to uneducated (30 years experience)me.They have gone "all in" with this move. It will be interesting to see who stays in the game, and who folds up their cards and moves to another table.
Best of luck to you Dennis.
Tom

 

By Brad Settlemyer on May 28, 2010

Two points of curiosity . . If 4over does not operate the site or determine the reseller why is it their secret recipe "loyalty" program that determines eligibility to participate? What sane printer/broker would continue to use 4over knowing that any customer they have that were to try RedTag may be forcefully introduced to a competitor?

 

By Frank Chang on May 28, 2010

This is nothing new. I don't know how many printers and brokers realize this, but NONE of the "trade only" printers are exclusively trade. THAT'S RIGHT. THEY ALL PRINT FOR RETAIL CUSTOMERS. Every week I talk to end user clients that have accounts with 4over (and all the other larger "trade only" printers - everyone knows who these are). 4over is the only one that now does it openly.

 

By Peter Piper on May 28, 2010

I am curious what would happen if/when 4over (they say that they are separate from RedTag but I think that may be slightly outlandish) decides to shut out all of their affiliates like VistaPrint did. I'm sure they'd eventually like to keep all of the sales to themselves.

 

By Mark F on May 28, 2010

The issue I have is 4over keeps talking about loyalty, and redtag is only offered to those top 3 groups but those at the bottom are not good enough. I admint I use 4over as well as other online printers for items we dont do or cant do but we do most itmes in house. Red Tag is NOT meant for those that are printers in the printing industry. It is really for those that are graphic designers, or 100% resellers that sell 4overs work for a few dollars over their cost. I got rent, equipment leases, inventory etc so there is no way i can sell for the same price as they do which means I will never move up to any of the top 3 categories nor be offered red tag which is a shame. 4over talks about being a printer for printers but they really arent. They are printers for those that cant or dont know how to print but want to sell print. In todays economy business is business and I would be interested in red tag or getting better rates but in order for that I would have to not print anything in house and send it all out to 4over.

Just my $.02 and my personal take on this.

 

By Michael Josefowicz on May 28, 2010

I have to agree with Frank, although my direct experience is over 20 years old. Every "trade" printer also sold "direct." The reality is that Print is a commodity. If there is a value add it's in the relationship and the customer service.

Frank Romano recently spoke to a Xerox Premier Partner conference. you can see it on line at the Xerox Virtual Conference at http://ilnk.me/2b22

He correctly points out that no one "owns a customer." If the mere presence of RedTagSale.com is a real threat, your customer base isn't very secure anyway.

 

By rick on May 29, 2010

Check out your online vendor 4over's owner has a brother that owns partner printing and they also have an direct to end user web site I think its lowpriceprint.com they are just like us and need more money to pay for all the expensive equipment. Don't send them any work and let them crumble. Use prime one printing in illinois

 

By Chuck on May 31, 2010

The best reason to continue to buy from 4Over is that they give you the best product at the best price, reliably with a good experience in the transaction. Everything else is irrelevant. If you are a Printer, and you think 4Over is competing with you, and they give the customer a better product, at a better price, with better service-- well, you should probably rethink your business. By the way, @Mark F-- if 4Over isn't a "printer for printers", then why on earth would they spend the zillions of $ they do on exhibit space at GraphExpo... there are very few designers at that show. Do you think it is so they can "pretend" to be a wholesaler? By the way, they have a lot more rent than you do, and more employees! Wake up, people!

 

By Steve on May 31, 2010

Chuck, 4over definitely does not offer the best price... I have various TRADE ONLY printers that are cheaper than 4over... 4over also steals brokers customers - coming directly from employees that work there. 4over has always been shady, and right before redtag was launched they canceled almost every broker account for reasons they could not say why. Bad business model always pushing trade and like others say sell out the side door. I know of a similar service as redtag in the works without the fees and the monopoly 4over is trying to make.. hopefully everything will help us but dont see redtag doing anything but competing with us, esp since they most likely will have people sign up but will print everything themselves.

 

By Chuck on Jun 01, 2010

@Steve-- I didn't actually say they had the best price, I said that's one of three important factors printers should use to decide whether to do business with 4Over (or any company for that matter). It's a "what-if" scenario. My real point is, redtag/4Over, whoever-- they are printers, they are really no different from you and me. You seem to have some deep insight into what they are doing, I do not. You say they are unethical, but I can only look at what they are doing from the outside. And to me, it looks like they are just competing aggressively and bringing disruptive innovation to the industry, which it needs.

 

By Michael Josefowicz on Jun 01, 2010

@Chuck,
My 2¢ . You're spot on.

 

By Andrew Pinch on Jun 02, 2010

As a trade printer myself I'd like to respectfully say in response to Chuck that buying from a company should not have to be a "what if" scenario, even a business as sticky as trade printing can still be honest and forthright in all it does, I generally get several "retail" customers who apply for a trade account on my site every day and instead of accept them and risk my reputation I call current trade clients with those leads and strengthen relationships that are making my business possible. True disruptive innovation would fully respect current business relationships while harnessing the power of retail through those relationships, not circumventing those relationships.

 

By Fritz on Jun 04, 2010

Well said and spot on!

 

By Jerry H. on Jun 04, 2010

It seems 4over will continue to do these types of practices until they can because they feel resellers are helpless to it. We hope all resellers seek other alternatives to 4over. For the sake of your business and that of the reselling industry. I just think rather than talking about it do something about it.

I want to be bold and offer Accela Print. We are a nationwide trade printer, built with resellers in mind.

I will not go in to a long pitch, or spam this blog but I encourage you to visit us and I will let our website and capabilities do the talking for us.

 

By Jerry H. on Jun 04, 2010

@ Chuck, I noticed your comments about the best product I don't think that is necessarily true. Though they seem to offer everything their pricing organization and ordering system is such a headache. I am not bad mouthing 4over I am just stating facts from my point of view. They are good at what they do I just think its time resellers have a printing alternative that caters to their needs.

 

By Bill Alpert on Jun 06, 2010

Chuck writes: If you are a Printer, and you think 4Over is competing with you, and they give the customer a better product, at a better price, with better service– well, you should probably rethink your business.

A key problem is that gang printing and the internet sellers have flattened the market, and reduced prices in many categories to extreme commodity levels. It is getting tougher every day to find a customer who is seeking out a value proposition such as greater stock selection, custom bindery or a more personalized approach when the cost premium of providing it can now increase the price by many orders of magnitude.

All of this during a time when print is increasingly out of vogue.

The buffet has been picked over; there's not much meat left on the table but a lot of us are starving and still waiting in line, hoping that something will magically appear from the kitchen.

My lifetime museum includes: California Job Case. Linecasting machines. Letterpress as a staple. Typesetting Shops. Cold type machines, with discs and strips. Color separators, and strippers. Image bureaus. Wait... I think I see... yes... it's ME!

 

By Bill Alpert on Jun 14, 2010

I took the Red Tag webinar a couple of days ago. If, as noted in a press release on this site, this presentation really drew a standing ovation, I'm a bit baffled.

Basically, participants are supposed to get excited about the flood of business destined to come their way. This "booty" is to be shared with 4 other Red Tag participants in your geographic area. Your shop qualifies by purchasing an unclearly defined minimum each month from 4Over. A few boxes of business cards a month apparently won't cut it. You'll need to buy some serious print from the company.

It's a bit unclear how my new customers will actually translate into profitable work, since the Red Tag projects they'll be purchasing are printed by 4Over and provide only a tiny margin to the hosting print shops.

Could a Red Tag customer be cross sold to other products/services in my shop? Perhaps so, if I'd like to put my own red tags on everything.

If this is the future of printing, it doesn't look good.

 

By Keith Davis on Jul 08, 2010

I could have sworn that not too long ago 4over was rallying their customers to write HP and stop their MarketSplash program. Now THEY are doing the SAME THING!! Go figure.
Plus, now with their new "loyalty" program, because I have had a slow season, I am now in a category of customers that can't even get a custom quote/order from them.
I am searching for an alternative.

 

By Ricky T on Jul 10, 2010

The supposed fact that RedTag is a separate deal is a blatant lie. I have spoken with several employees regarding RedTag, in several divisions over there, and all emails come from 4over.com email addresses.

My guess is that "Chuck" is from 4over, especially considering his excessively loyal stance on 4over. [Editor's Note: Chuck is not from 4Over]

For 4over to even pretend that they are trade only is laughable. They allow absolutely anybody to sign up and get an account. As previously noted too, I have met many non-trade companies that buy from 4over.

There are other trade vendors with much better service and better pricing.

The only thing I can really agree with in 4over's favor is that most trade printers do indeed sell retail as well. It is shady but it is what it is.

 

By Peter Posk on Jul 22, 2010

After 35 years we (BCT) are still wholesale and we are proud of that fact. We have 60 locations and 30 of those have full color (offset) capabilities. We have plants in every major shipping zone and most major markets which translates into fast turn & low shipping costs. We have some great online technologies for both placing orders/uploading art to our plants...as well as technologies for repeat/template based orders. We won't compete with you, in any form.

 

By Chuck on Jul 22, 2010

Peter, I hadn't looked at your website for quite some time, it's a nice upgrade from the last time I looked! And I also read the article in Printing Impressions last month. You folks seem to be keeping up with the times, even running ahead-- that's somewhat rare in the industry these days! Congratulations!

 

By Carl Gerhardt on Jul 27, 2010

Since this thread started with the "franchises in a tizzy" comment I thought it appropriate to comment on the discussions/negotiations our coalition of franchises had with 4Over about Red Tag.

We had several conference calls with top management of 4Over. The franchises represented were Allegra Network (Allegra, American Speedy, Insty-Prints), Alphagraphics, Franchise Services (Sir Speedy, PIP, Signal Graphics), Minuteman, ICED (Kwik Kopy, Ink Well, Franklins)and Proforma.

Basically we agreed to disagree with 4Over/Red Tag. Our main position is that by dealing directly with the end user Red Tag violates a primary principle of who controls the customer relationship. For any company in the print for pay market the main reason for being is owning the customer relationship and providing value added services. Are we losing business to on-line "gang run" commodity suppliers? Certainly! Is this business we want or can even compete effectively for? Probably not. Is Red Tag the answer...we don't think so the way it is positioned and 4Over is not willing to change the model to meet our requirements.

All of the above organizations agree that with the direction Red Tag is going it will not be a fit or receive endorsement from our companies. That said each organization will continue individual dialog with 4Over to see if there are ways to cooperate. The discussions were respectful and we do believe 4Over was wanting to find a solution acceptable to our organizations. However, they appeared too committed to the investment they have made in Red Tag to make changes that will the primary issue mentioned above and several other practical issues with the current program.

I want to point out that I am primarily speaking for Allegra Network but since I was the primary coordinator of the discussions with 4Over on behalf of the coalition I have tried to convey my interpretation of the positions of the group as a whole and the end result.

 

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