You see, Labelsprint is an all-digital print shop, and the company is thriving on providing customers with what digital print technology brings to the labeling industry. The business model is simple, and Labelsprint is living, growing proof that it works.
The company is located in Denbighshore, North Wales, UK, and got its start in 2005. However, it began with the idea that label printing would only be a side business. The name of the start-up was Borble, and its business model was to use digital print technology to manufacture wallpaper borders. And the machine of choice to produce these products was a Xeikon 330, a machine that happens to be suited for just-in-time label printing.In fact, Borble installed the UK's first Xeikon 330 press within a label market that was known for a wealth of flexographic print shops.
Gavin Scott is Labelsprint's owner and managing director. While he comes from a printing background – gravure – he didn't know too much about label printing. But he knew enough to determine that digital print technology could provide the foundation for a profitable business, a departure from where he was in his career before labels.
"I worked all my life in gravure printing. And basically, I had spent the last three years in that industry closing factories down – taking customers and moving them to other factories, stripping the factories down, laying people off and closing up shop. I got fed up with this. I wanted to apply my skills, not to businesses that were dying, but to growing and profitable businesses," Scott explains.
So Scott and a business partner spent a year planning the business. "Initially we were going to base the business on wallpaper borders, but we bought a label machine, so figured we'd do a swath of trade label business on the side," he says.
The duo had done a good deal of research, and had spent some time in Belgium looking closely at Xeikon machinery. "Because of the repeat length, and with our original business model being based on the wallpaper borders, we were drawn to the Xeikon. Plus, being able to visit and see how the machinery was built was another reason why we chose Xeikon. We had our second one installed in 2009," Scott says.
And that's it for Labelsprint, as far as printing machinery is concerned – two Xeikon presses, a 330 and a 3300. Of course, machinery needs people, but Labelsprint's approach is hardly conventional. The company runs four pieces of label converting machinery – the two Xeikon's, with their respective GM finishing lines. But Scott has one operator running all four machines at once – a testament to digital printing's attributes and also the company's unorthodox approach.
In those early days of Borble, the company wasn't anticipating the direction the business would go in, and the team had to learn on the fly. "We were so successful with the labels, we kind of moved the wallpaper border business to the side, and just focused on labels," Scott says. "The borders still account for around 5 percent of the business – but we don't do any selling into it; it grows quite organically," he explains.
"We were all new to it," Scott says of Labelsprint's entry into the label industry. "We didn't have a clue, really. So that first year we spent on a very steep learning curve. We managed to grow to about a quarter of a million pounds, and it has just kept growing and growing. And it's all really been without a focused sales effort – it's been word of mouth."
The press operator prepares a job for the Xeikon press.
Toyota is one of the company's biggest customers, and provides a good example of just how Labelsprint is using its technology to acquire and develop business. "They manufacture overseas, but assemble cars in the UK, and their parts are shipped from all over," Scott explains. "What they found was that shipping the boxes of parts was quite expensive, and there were complications en route. So they wanted a label that could go on the boxes that basically had all of the necessary information – the supplier, the supplier code, the country of origin of that supplier, a unique number, and the part number and bar code – all on one label.
"They asked around. And people were telling them that it couldn't be done. But we could do it – that type of label can be made with our technology. They just kind of found us through word of mouth, and we said, 'sure, it can be done.' Most of our customers have come like that – word of mouth," Scott says.
The automotive market is big for Labelsprint, and they serve a variety of others, particularly any brand that digital print capability appeals to – photo quality labels, variable data, and custom, promotional items. The food label market is also in the company's wheelhouse, as the Xeikon 3300 runs on Xeikon QA-I dry toner, and is compliant with regulations for indirect and direct food contact.
Scott point out that throughout Labelsprint's brief history, there really wasn't much of a sales effort at all. But with the company's growth and success, things are changing.
Today, there's a sales team in place, and there's also some new space to organize the effort. This year, Labelsprint has added an additional 3,000 square feet to its workplace, effectively doubling its size and allowing more space for sales and customer service.
Also, there's a new press on the way, with an installation scheduled for June – another Xeikon, this one being the new 3500, which features a wider web width and a faster print speed. Yet there are no plans to grow an arsenal of presses; the 3500 will replace the 330, and the faster press speeds and increased capability will pave the way for entry into new markets while also adding to its capacity.
Labelsprint currently employs 13 people, and is actively looking to add more employees to its customer service team.
A new type of customer
The company is evolving. There's the new machinery, a new workspace and also a new type of customer.
"When we first started, just about everything was short run work. Those first customers were, say, people at home, making their own products – that was the business we were doing. And it's good business – low risk, with some pretty decent margins and repeat business as well," Scott says. "Then, as we grew, we started getting business from bigger and bigger companies that wanted just-in-time orders. And then we started doing longer and longer runs for these customers.
"When we started, our average job was about five minutes on press. Now, our jobs are averaging about half an hour. It's also gotten to the point where we've had to contract some work out to flexo printers. We won't make money if the job takes too long on press," Scott says. "The irony is, when we started off, we were taking work away from flexo printers, And now, we're giving them work, hence the reason we're buying the new machine."
What about investing in a flexo press? "We're not going to invest in flexo," declares Scott. "Personally, I don't see a future in it. I see it going the way gravure went. I don't know when, but I think that's what's going to happen."
A GM finishing unit
While Labelsprint is committed to controlled, sustained growth, Scott has some interesting ideas for the future. Today, most of the company's customers are based in the UK, with some located in Ireland, France, Sweden, and Spain. But Scott sees opportunity in a couple of other regions.
"The label market in Japan and the Czech Republic is similar to what it was in the UK," Scott says, referring to the lack of a digital label printing presence in those regions. "We're now thinking about how best to exploit that."
In the UK, Labelsprint can be considered something of a pioneer in the industry. Since it has come onto the scene, more area printers have made investments in digital. "The UK label industry never should have let us take off. We were ridiculed at first. People said, 'They don't know anything about labels.' I think we were just underestimated."
Also, when the global recession hit, Labelsprint was in a good position. "It was great for business," says Scott. "At the start of it, everyone wanted just-in-time orders and shorter runs, so we were able to grow throughout the recession. Sure, people took longer to pay us. But apart from that, we kind of sailed through it. I think that maybe the recession has led to an increase in competition, because a lot of flexo printers got to thinking that maybe they needed to do something different."
Gavin Scott doesn't focus on the technical aspects of printing labels. Instead, he thinks about what he feels a customer really wants – a simple label ordering process that gets the job done right.
Today, the company is looking to upgrade its presence online with a new quote and order module that its excited about. "What we're trying to do is make it three or four clicks from start to finish. We would like to make it as simple as that, like buying a book or a CD on Amazon. That's what it needs to be.
"Most people don't like buying labels," Scott adds. "It's something they have do, and either it's always late or it's always wrong – and we'd like to change that."