Artgrafix Blog

A couple of months ago, we wrote about mounting and laminating giclee or fine art digital prints.  Working with customers we have now launched our range of acid free films.  The toughest part was not the acid free but also getting non-yellowing adhesives with hi tack components.  Like all things, these cost more, but right now we have a robust group of 3-4 customers who like having these and we have sized them for their printers to get sales going.  The products are now listed on our website and have a separate product grouping for the acod free pressure sensitive films.

We are also looking at new adhesives which have a textured release liner to make grooves in the adhesive to help air escape.  This helps eliminate bubbles in mounts from trapped air, especially common with hand applied graphic mounts.  The films we are evaluating are silicon top coated polyesters which can be self-wound as cold over-laminates.  Eliminating the release liner not only makes the laminates easier to use, but is more environmentally friendly and eliminates the silicon paper waste people now face.

Like a lot of people, the first time I saw products we use that were being made in China, I was bowled over by their prices.  Many of these items were 40% of the cost we have been paying and certainly when we looked at these at tradeshows, they looked good, worked well and were not poorly made.  So following the herd (I never said I was an original thinker!), we have been trying to import directly and have found the original promise to be less than we thought although still an option for certian items.

First of all, our costs rapidly rose.  As a small company, we found that on our purchases of less than $10K, shipping, duty and clearance fees were approaching 25%.  Plus what we found was that with the time to get products here being 45 to 60 days from when we ordered (and paid), we had to have 2 orders going at a time (staged 30 days apart) to have product arriving every month because we didn’t have the space to hold 4 months inventory.  And finally, we inspected every unit and for those that had any damage or needed rework, the Chinese are good at sending parts but the rework and repackaging is all on us. Not including the management time to control the importing, the landed costs rose and the savings became about 30% instead of the 60% originally thought. 

The ongoing support for imported goods, tech support and alike, is all on us.  Not that that’s a problem, but we do have some challenges with component changes from lot to lot and communication always takes a couple of days and is sometimes problematic. So when you factor everything in, importing is a an opportunity, but not the ‘no brainer’ the herd makes it out to be.

What this means is that YOU NEED SCALE and you need to to provide all of the resources to make it work.  Not only economically, but also to get the Chinese’ attention to correct issues on a timely basis.  This requires working directly with the Chinese  For certain items, we have stayed with our US sources and what we have done to bridge the gap with other items is partner with others to combine bringing these items in, have additional people we can network with on Technical issues, and make it so we can maintain sevice levels.  This has diminished some of the financial luster these originally had, but gives us a sustainable position which we can service and grow our business.

In the past couple of months, I have written about the challenges of higher energy costs, longer lead times and the challenges that poses to a small company.  In addition to the passion we have for our products, we go through our financials pretty rigorously to make sure that costs are not moving in the wrong direction (and like the salt shaker on my kitchen table, we always have to scale back spending on a couple of items to get them back to the ‘center’ of the table!)  Even though business has been good, with $4 gas we are expecting the ’shoe to drop’ and business to slow down.  Increasingly, we are looking for ways to automate and to outsource actions to limit the growth of staff to both protect our downside as well as handle additional sales while maintaining our overhead costs.

 Right now, we are looking at automated cutters with computerized stops, new software and updated computers.  The technology which is available is affordable and can have a meaningful impact on productivity as well as help to give better service and make better products.  It also takes time to evaluate and implement which takes time away from product development and being with customers, but right now we feel an urgency to focus on these internal improvements to protect us against downturns as well as give us capacity for future growth.

I would be interested in how others look at their business right now and what steps you are taking for the future.