Narrow Web Profile: Discount Labels

By Jack Kenny | July 20, 2005

Customer service and technical innovation are hallmarks of this Indiana converter.

Among consumers in the USA, probably no one outside of New Albany, IN, knows about Discount Labels. Yet the products produced by this 40 year old company are used and touched by millions of people every day. To the average person on the street, Discount Labels Inc. doesn't exist. But to the thousands of label distributors and retail operations on the customer list, the company is a profitable source of labels of all kinds, of high quality and timely delivery.

Discount Labels is big. At the beginning of the 1990s sales were at about $20 million, and by the end of that decade were greater than $50 million. Last year the company's revenue from sales was around $76 million. Discount Labels today is but a part of a much larger company — Cenveo, the new incarnation of what once was known as Mail-Well. Cenveo is a public company that engages in general commercial printing, high impact premium printing, custom and stock envelopes, printed business forms and labels. Sales are around $1.8 billion, and the company employs 11,000 people.

Discount Labels is part of the company's resale division, as it is known internally; externally, it is positioned as a brand of Quality Park, the official name of the resale entity. Quality Park's revenues last year were about $430 million.

New Albany might be in Indiana, but it's pretty much a suburb of Louisville, KY, which is right across the Ohio River to the south. Discount Labels is in an industrial park (as are most label converting businesses), but at 212,000 square feet and four stories in height, it's rather imposing. The property also has a feature seldom encountered at your average label printing business: a guard house, complete with a gate and a no-nonsense person who makes sure you are who you are before you go inside.

What's that all about? Proprietary stuff. Like every press in the plant, all 93 of them, all custom re-engineered in-house, mostly out of old Webtrons. Like proprietary operations management software and procedures. Discount Labels employs 660 people, and the management is serious about propriety. They also don't let anyone, even editors, take photographs indoors.

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Humble beginning
Most label printers started in their garage, right? True, but not Discount Labels. Founder Fred Conway started his company in 1964 in his basement. When it got too big, only then did he move it to the garage.

Fred Conway's dream, since his childhood, was to become a firefighter. He fulfilled that dream, eventually rising through the ranks to become the fire chief (unpaid) of the Perry Township Volunteer Fire Department in Indiana. Back in the early 1960s, before the 911 emergency network, citizens who needed the fire department would call the operator. In Conway's neighborhood, sometimes the operators would call the wrong fire company. The chief tried to eliminate the confusion by sending stickers to residents that showed the correct phone number. They were the kind you lick, and they didn't work well.

Soon Fred learned about pressure sensitive labels. They worked just fine. After a while he decided he didn't want to order them, but rather make them. He bought a label press and moved it to his basement. Business grew, and in 1969 Fred and his family moved to a different town, to a property that had a big garage. He began advertising his labels in fire department magazines and to US military bases. Those smart moves required that he move to a vacant doughnut shop in New Albany.

In late 1997, not long before he died, Fred Conway published the story of his firefighting and printing experiences in This Will Never Happen Again, subtitled "The Fascinating Story of the Birth and Growth of Discount Labels."

Allen Conway, Fred's son, joined him in the label business after graduating from college.
He learned how to set hot lead type, how to make rubber stamps, and eventually began tinkering with flexo presses. It was Allen Conway who came up with the changes to the second-hand presses that have made the company unique in a wide field of competitors. His modifications reportedly allow for quick changeovers, among other benefits.

Today, Allen Conway is president of the Quality Park division of Cenveo.

Discount Labels founder Fred Conway (left); his book about the founding of the company; and his son, Allen Conway, president of Quality Park.

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Short runs, very fast
In the height of the honey season, bees are not as busy as the people at Discount Labels. Every employee displays a palpable intensity.

With 93 printing presses it has to be busy. Some of the presses print one color only. Others apply two and three colors. All presses are flexo. All plates are manufactured in-house on several DuPont Fast CTP units, imaged by Esko-Graphics equipment.

Each day, the people at Discount Labels process between 2,500 and 3,000 orders. Eighty percent of those orders will ship between 24 and 72 hours. The runs are short, and getting shorter, says Mike Vejar, vice president of marketing. "We are seeing some longer runs, but to us, 25,000 labels is a long run. Customers no longer are ordering in the millions. We play heavily on our speed, the ability to manufacture in small quantities, and our delivery."

The company's core business is labels of one, two and three colors, says Vejar. "But our fastest growing segment is process color." Vejar explains that many of the company's distributors — plus outlets such as Sir Speedy — receive orders from their customers that are crafted using desktop publishing software. "People are creating four-color labels on their own," he says. "Our biggest competition is today's technology."

Discount Labels publishes a large and handsome catalog that contains images of the many types of labels, from the simple to the complex, that the company produces. Standard colors and paper stocks are available, as are 400 die shapes (from RotoMetrics), but the company welcomes custom work with challenging specifications. Indeed, Discount Labels bills itself as "America's Largest Custom Label Printer".

The company holds no inventory of finished goods — "no make and hold," says Vejar. We push the custom. Everything we do is built around speed.

Managing a daily flow of thousands of label orders is a serious challenge. So is plate production, and so is shipping. The company is up to date with print management software, but they're not off-the-shelf products. The building's fourth floor houses the technology brain trust, 30 IT people who design, install and oversee all electronic systems.

One such electronic workflow system is a digital "mold maker", a computer program that picks up each image to be printed and gangs it for plate production with other jobs automatically. It will wait only so long for the mold to be filled, at which time it sends itself to the plate production area for output and starts a new mold.

The shipping area also is software heavy. The computer scans the bar code of a particular job, and decides — based on destination and other factors — which logistics firm will carry the package. It also prints the shipping label, and also prints a promotional sheet with the distributor's name and contact information, which will go into the box with the finished labels. The promotional sheets let the customer know that their label supplier (the distributor) has many other products for sale: "Like stamps," says Vejar. "We do $2 million a year in just rubber stamps." Nowhere on the literature are the words Discount Labels to be found.

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Promoting labels
Because Discount Label's sales people are independent distributors, the company does not need an outside sales force of its own. Inside, however, is a mighty customer service department. The company will assign employees to service retail stores such as Sir Speedy and Office Max. "They deal at the corporate level down," says Vejar. "We develop programs with them at the corporate level that trickle down to the various stores. We develop store promotions for them as well."

As an example, he points to labels for teachers, feel-good stickers to give to students for a job well done, or at holidays. "We develop the concepts, and we have to drive the sales. Our business is very reactive, and seldom planned."

Working with distributors is an exercise that continually educates the people at Discount Labels, Vejar adds. "Our distributors are busy with many other products; labels are just one of them. We spend our time making sure that the distributors see labels as a necessary and profitable part of their business. At the same time," he says, "we focus on the fact that labels is not a stressful sell, but easy. They really sell themselves."

Discount Labels Inc.
Division of Quality Park, a Cenveo Company
4115 Profit Court
New Albany IN 47150 USA
Phone: 800-995-9500
Web site: www.discountlabels.com
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