About a year ago, I wrote about commoditization in the world of wide-format and specialty graphics printing, and one of my comments was “Here’s the upside of commoditization: things don’t become commodities unless there’s high demand for them. Commoditization is a reflection that the market for something is expanding, attracting new entrants, and forcing down prices.”

The dread word “commoditization” was starting to be a concern in some specialty printing applications. Has anything changed in the past year? 

First off, a quick recap of what we mean by “commoditization.” Says Wikipedia:

a class of goods for which there is demand, but which is supplied without qualitative differentiation across a market. A commodity has full or partial fungibility; that is, the market treats its instances as equivalent or nearly so with no regard to who produced them.

Let’s break that down phrase-by-phrase and then see how it applies to specialty graphics.

“...a class of goods for which there is a demand...”

This is the essential point of a commodity: there needs to be a demand for it. A chocolate teapot, to pick a random example, will never really become a commodity because there is not likely to be a huge demand for one, certainly not if one hopes to use it as an actual teapot and not for, say, fondue.

But there is a demand for things like oil, wheat, sugar, salt, and so on—commodities all. So, too, is there a demand for many kinds of printed products, from business cards, to labels, to publications (yes, there is still a demand for printed publications), to signage, to all the varieties of specialty printing. Are these “commodities” in the pejorative sense? Some are. Business cards, for example, are certainly a commoditized print product. What about the others? Well, let’s dig a little deeper into the definition.

“...supplied without qualitative differentiation across a market...”

Aha! What do they mean by “without qualitative differentiation”? A rose is a rose is a rose. A bushel of wheat is a bushel of wheat. Likewise, a business card is a business card; anyone can print a business card, even someone with a decent desktop printer. Sure, anyone can produce bad business cards, and we’ve seen enough examples of those, but it doesn’t take an inordinate amount of effort or skill to produce a good one. These days, no one shops for business cards by asking for print samples from different shops and evaluating their respective quality. No, if they shop for business cards, they do so solely to find the best price.

So, indeed:

“...the market treats its instances as equivalent or nearly so with no regard to who produced them.”

Except, perhaps, in the case of who has the cheapest price. The dread that print businesses have with commoditized products is that there is very little, if any, profit margin on them. When printing is based on skill and quality, one company can easily stand out from another, and thus charge more, and realize more profit. When skill and quality is no longer a differentiator, all that’s really left to compete on is price. Right?

Well, yes and no.

As I was writing this feature, I happened to get a new comment notification for a story I wrote a little over a year ago (I swear this was a coincidence; there was no quid pro quo involved). It was a story about “digital couture” and it included a passage about looming commoditization in digital textile printing:

“That’s always been a struggle for Steven and I [Steven Moreno and Carol Yeager, principals of L.A.’s MY Prints] because there are new print shops that are popping up left and right and their M.O. is, ‘We’re going to sell it to you cheaper, we’ll sell it to you faster,’ they’ll get the cheaper inks and they’ll get the cheaper paper,” said Yeager. “And they’re competing with us and we refuse to let that be our motivation.” [Ed. Note: Steven Moreno’s name corrected from original. My bad.]

Alert reader Olivia Harbison commented:

Absolutely beautiful work, and great article... I'm one of those newer print shops mentioned, and I can appreciate Yeager's point.

However, those cheaper inks and paper are what enable us ALL to compete with overseas clothing manufacturers. I don't think we should underestimate this objective...

(Tangential note: Actually, one of the advantages of digital printing is that it is “inshoring” [the opposite of “offshoring”?] print work that would have gone overseas, largely because one of the drivers of that digital printing is faster time-to-market. Jobs can be turned around and delivered faster when they don’t need to be shipped a few thousand miles.)

This increased competition and thus the next stopover on the road to commoditization is not just a cost issue; yes, cheaper ink, media, and equipment sure help lower the barriers to entry, but improvements in print quality and consistency, as well as improved ease-of-use all help, as well. When you can hire one less-skilled person to press a button and thus replace a phalanx of skilled craftspeople, that also goes a very long way toward lowering costs and barriers to entry. (Although it may be bad news for those skilled craftspeople.)

Any next-generation technology will always bring some print application closer to commoditization. After all, the users of the older generation of textile printing equipment enabled businesses to open that could produce printed fabric—or at least certain kinds of printed fabric—cheaper and faster than analog textile printing, and that analog equipment was likely more productive and less expensive than previous generations of analog equipment. And so on and so on. The path to commoditization has always been a continuum of improving technology and declining cost.

So is pure, cut-throat pricing by faceless companies on cookie-cutter products the ultimate destination of this continuum?

Absolutely not.

Lets face it, even a highly commoditized product can easily be screwed up. We’ve all ordered business cards online that arrived looking not quite as we had anticipated, even with an online proof. We all love the ease of web-to-print and automation, but it’s not an error-free solution.   

Specialty printing applications still require a high level of quality control, because very often specialty graphics are about more than printing. Take vehicle graphics. Anyone can buy a Mimaki, Mutoh, or Roland machine and start pumping out panels, and these days it doesn’t require a very advanced skill set to get good quality graphics. But installing them is where the real skill and experience are required. Can your installer detect trouble spots where the vinyl may not adhere properly, come loose, and start flapping about on the highway? Any vehicle wrapper will tell you that they are always competing at least in part on price, but when the customer goes for the cheapest option, they end up paying in more ways than one. “You get what you pay for” is still a relevant maxim. The trick is convincing the customer of that.

And even in the fast-growing textile printing market, there is a lot of specialized knowledge beyond simply laying down ink that is required to create a high-quality finished project—fabric handling, sewing, seaming, and whatever other processes are required.

So when developing a specialty graphics-oriented business strategy, think about what else besides the physical printing can you offer a customer. Is it an additional service, like graphic design (at the front end) or installation (at the back end)? Is it complementary print products? Is it brainstorming with the client to create unique products and projects?

Commoditization, should it ride its pale horse into specialty printing, doesn’t have to mean the end of profitability.