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IPA Study: Profit Leaders Focus on Packaging and Value Added Services

Press release from the issuing company

December 16, 2003) Profit Leaders are much more focused on packaging products, direct corporate customers and creative, advisory, digital asset management, content management and facilities management services than their lower profitability counterparts, according to IPA's latest Industry Economic Study. Profit leaders are recognized as the top 25 percent of graphic solutions providers and prepress companies participating in the IPA Economic Study. Commenting on the Profit Leaders' market mix, Steve Bonoff, president of IPA, The Association of Graphic Solutions Providers, said, " The report clearly indicates that the growing emphasis on packaging and value-added services has allowed Profit Leaders to achieve higher gross profit while creating a structure that requires less administrative and sales expenses." Based on all participants, sales continued to fall in 2002, however the decline was less sharp than in 2001 and may be indicative of an improving economy.  The decline is putting considerable pressure on administrative and selling expenses as well as labor costs. These expenses continue to take up a higher percentage of sales, thus making profitability harder to achieve. However, even with sales declining in 2002, repeat participants in the IPA study experienced an increase in their gross profit percentage allowing them to report stable profitability. Among all participants, the report shows that packaging now represents the largest percentage of sales, compared to the third largest in 2000. Bonoff added "The study confirms that IPA members are becoming more diverse in their offerings, creative, advisory, and management services continue to grow as a percentage of members' businesses, increasing from 8.1 percent in 2000 to 14.5 percent in 2002. On the other hand, the last two years have seen a dramatic decline in members providing advertising materials." The Annual IPA Economic Study provides detailed analysis of cost of services as a percent of sales as well as sales per employee, return on equity, return on assets, inventory turnover, and debt to equity. In addition, the study reports on customers and markets served as well as products and services offered. The report is divided into several sections with each section providing a comparison of the top 25 percent-the Profit Leaders-to the lower 75 percent. In addition to a section that includes all participants, the study includes several sections based on sales as well as a section showing a year-to-year comparison for repeat participants.   IPA members view participation in the IPA Economic Study as a key benefit of membership in the Association since it offers comparative data that helps their companies compete more effectively in the marketplace. While the study-a $1,195 value-is available free to all members, each study participant also receives a free personalized company analysis, which can be used for benchmarking purposes. Participants can easily see how their expenses, employee productivity, and profitability compare to companies of similar size as well as identify areas in need of improvement. For more information about the Economic Study or to purchase the 85-page report, contact IPA at (800)255-8141.