SheetLabels.com, based in Glens Falls, NY, is not the typical label company, and Adam Gray, its president and CEO, is not the typical label business owner. The company’s business model is based on e-commerce, and uses unique, proprietary software developed specifically to make buying labels online as easy as can be.
Gray is the quintessential entrepreneur, and being a business owner was something that he knew he wanted to do since childhood. “Ever since I could remember I wanted to own a company and have a business,” he recalls. “I was the 11-year-old kid trying to figure out how to widen the margins on lemonade sales. When I was 13, growing up in the Lake George, NY area, I knew people who had boats, so I started a boat cleaning and detailing business.”
It’s striking to note that after selling lemonade and cleaning boats, next came Gray’s label business. SheetLabels.com wasn’t going to wait until after college – or even after high school.
Gray grew up around the printing industry and entrepreneurship. “My dad worked in the printing industry, so a lot of technical terms and concepts were a part of typical dinnertime conversations, which I became familiar with,” he says. “But what really got me excited was the software side – particularly e-commerce.”
In 2002 Adam Gray was a 15-year-old high school student. It was at this time that he bought the domain name and developed the SheetLabels.com website. Using the Internet, he found programmers all over the world to help develop the site. A 15-year-old teenager from upstate New York was employing computer experts in India, Pakistan and Russia, and SheetLabels.com was up and running.
At this time, with no manufacturing equipment of its own, the company was a label broker. After all, Gray was still a high school student. “The initial framework of the business was a CRM (Customer Relationship Management) system. I started there – just simply being able to accept orders online and manage the customer account. It eventually evolved from that to what we have now, which is much more sophisticated – handling production workflow, allocating different press lines based on machine capabilities, and so much more.
“But in the beginning, it was all about taking orders online,” Gray explains. “From 2003-2006, we basically brokered laser sheets, inkjet sheets, thermal transfer products, and also some commercial printing, like flyers. But most of what we sold were blanks – probably around 90%.”
The business was evolving and growing, but meanwhile, Gray still had high school to attend to. He had the full support of his family, and fortunately, his teachers as well. “I had a cellphone, and I was getting emails from customers throughout the day. Thankfully I had a special deal with the assistant principal where I could go into the hallway and take an order or talk to a customer on the phone,” Gray says, adding with a laugh, “I didn’t have very many friends.”
By the time he was a senior, SheetLabels.com had been up and running for a couple of years, and the company reached its first big financial milestone, breaking $100,000 in sales.
Upon graduation, Gray was faced with a big decision. “I could go away to college – while borrowing upwards of over $150,000 to invest in an education – or I could go to the bank and invest roughly the same amount of money in equipment where I could make my own labels and improve our profit margin. Meaning, I can take a full swing at this and see what happens. I felt that if I didn’t do it, I’ll always wonder ‘what if’? And that’s what led me to ultimately pull the trigger and make it happen.”
The Move to Manufacturing
In 2006, at 18 years old, Gray got his first bank loan for $112,000. “I went out and bought an old offset web press. It had been used for carbonless forms, but we modified it with a die unit in order to produce laser sheets,” he says.
The press was housed in a 6,000 square foot 1850s era blue barn that his family owned. But not all of the money was used for the press. Gray invested in dies, some online advertising, further website development and new employees.
New to manufacturing, there were some growing pains. “We made a lot of mistakes in those early years,” Gray recalls. “There were people that didn’t work out, we had some quality issues, and I hadn’t even wrapped my head around customer acquisition – I had no idea what it costs to gain or lose customers. I was in a frenzy of trying everything I possibly could, while growing as fast as possible. I was exhausted, working until 1 or 2 AM most days. My lead programmer at the time – who is still with us today – is in the Ukraine. So the time difference in communicating with him was another challenge.”
Then and now, the key to SheetLabels.com’s success is in the website and the software. “Most of our customers today find us online, but back then, it was all online. So it was a constant game of optimizing our website and trying to generate as much traffic as possible. Our customers were people going online searching for labels – a lot of small startups, but also some mid-sized and large businesses. We were getting several thousand visitors per month to our website who were actively looking for labels.
“Our customers would select what they wanted from our site and we would either print it or broker it out,” Gray says. “Today we have between 60-80,000 visitors a month on our site looking to buy labels, and they can select from a variety of 6-7,000 combinations of materials.”
In 2009, the company grew 40%, a rate that Gray attributes to the fundamental shift of focusing on data. “It was around this time that I started to get a handle on understanding our customer base. We used all of the data we were able to gather with our software to learn who our customers are, what they bought, how much they bought, what industries they were in and their buying behaviors – like how often they come back, their lifetime value, and cost per acquisition. All of this data helped me understand what we needed to do to improve.
“My gut was telling me to do certain things, but when I validated those ideas with data, I knew it was the best possible decision we could make. When I started doing that, things really started to change,” he says, adding that this was the year the company went from around $600,000 in annual sales to $1 million.
With the software and data-driven activities fueling growth, additional manufacturing equipment came with two more used, webfed offset presses, and also a sheetfed, toner-based Xerox digital printer. In addition, the company acquired a Primera digital printer to accommodate roll label customers.
With the influx of manufacturing equipment, SheetLabels.com had outgrown the blue barn. So in November 2014, the company – now with 20 full-time employees – moved to its current 34,000 square foot facility in Glens Falls.
Today SheetLabels.com occupies 19,000 square feet of its space, with plans to fill the entire facility within the next couple of years. The company has grown 40% annually since 2010, with no signs of slowing down.
In the fall of 2015, Gray made a $1.25 million investment in the company. He had been paying close attention to the UV inkjet digital label press market for several years, and in November SheetLabels.com installed a Domino N610i digital label press. At the same time, for finishing, the company added a Rotoworx 300 unit, manufactured by Gonderflex. Renovations to the facility to create a climate controlled pressroom for the Domino and the addition of three new full time employees rounded out the investment.
With a 13" web width, SheetLabel.com’s Domino N610i prints up to 246 feet per minute, up to five colors (CMYK plus White), in 600 dpi native print resolution. The N610i uses vibrant UV curable inks designed for a range of industry standard self-adhesive labelstocks including coated paper, polyethylene and polypropylene, normally without the need to prime.
The finishing unit, the Rotoworx 330, is a standalone, modular converting and finishing system, complete with unwind, semi-rotary diecut, lamination, matrix rewind and two rewind modules. It has a 13" web-width and operates at speeds up to 160 fpm.
“We’re very happy with the Domino and may be looking at adding a second,” Gray says. The company has strategic partnerships with another New York State–based label converter, as well as one in Connecticut, so when very long run or certain specialty orders come in, they can efficiently meet those customer needs. The partner companies’ machine profiles are within the SheetLabels.com software. Gray says, “If we continue to develop strong partnerships, we may not need to invest in a flexo press. I can see this building one day becoming a 34,000 square foot digital print shop.”
The secret’s in the Software
E-commerce is defined as the buying and selling of products and services exclusively through electronic channels. In 2014, retail e-commerce sales in the United States amounted to over $305 billion and that figure is projected to grow to $548 billion by 2019. Frost & Sullivan projects B2B e-commerce will hit $12 trillion in sales worldwide by 2020, up from $5.5 trillion in 2012.
While the Domino and Rotworx machinery provided a significant upgrade to the company’s in-house label manufacturing ability, the proprietary software system developed by Gray is his company’s trade secret, and ultimately the heart and soul of SheetLabels.com. The business model is steeped in e-commerce, and the ever-evolving website and software is fueling the steep growth trajectory.
Designed specifically to provide an e-commerce solution to online label buyers, Gray and his team of developers are continuously upgrading the software and website to make the process easier to use and more intuitive. And it’s also set up to facilitate growth for the company as well as its customers. Gray explains, “Here is how I tried to set up this business: A startup wants a blank label for a new product, and he is going to print it himself. So he needs 10 sheets. Then he comes back and says, ‘I have been so busy, I’d like you to print my labels, but this time I need 100. The customer continues to come back, and continues to upgrade and enhance the order, until he is now onto small quantity rolls – which we would then print with the Primera. And now that we have the Domino, they’ll say, ‘Hey, I’m being looked at by Whole Foods or some other major retailer, we now need 100,000 labels. Then we upgrade them again.”
One of the keys to the company’s success lies in its customer data. “We collect user data all day long, and we take that information and use it,” Gray says. “So we’ll monitor how many people visit the site and how many of those visits turn into orders. That’s one metric. Another might be to calculate how long they are on the website, and another may be how deeply they penetrated the site – did they get all the way to the checkout process and then leave? So we are constantly trying to collect as much information as possible to make the experience better for the customer.” Most recently, the company has invested a lot in shopping cart technology, as well as in improving the user interface for product selection. “We’re now working on a label design aspect, which will be integrated into the workflow,” Gray says, “We want our customers to go through the label buying process without having any hiccups, roadblocks or challenges along the way.”
SheetLabels.com has more than 50,000 active customers from throughout the US, with those from California, Texas, New York and Florida leading the way. Over the years, the company has added to and refined its customer service team, which takes phone calls, and also provides service through email and an online chat feature.
The company has come a long way since Gray was running the business by himself as a high school student. The website today gets between 50,000 and 75,000 unique visitors monthly. There are now 30 total employees working to produce and ship anywhere from 150 orders on a slow day to upwards of 300 on a busy day. “Our smallest order might be 12 or 13 dollars for just five or 10 labels, upwards to 10-20,000 labels shipped to mid-sized organizations that may have a deal with one of the larger grocery store chains,” Gray says. Standard turnaround time is four days, though if needed the company can print and ship labels on the same day they’re ordered.
Gray says that SheetLabels.com is on the fast track to $10 million in annual sales. Plans for the future include diversifying the product line – perhaps ading flexible packaging and folding carton capability – expanding the outside sales team and perhaps having multiple locations nationwide.
And it all goes back to the software, what started it all. “Our software follows our customers through the whole process. So they start from the inception of their small business all the way until they’re requiring large label volumes. This gets me excited,” adds Gray. “We can follow the evolution of the customer up until they are on the shelf at a huge chain.
“A lot of our customers are entrepreneurs – busy minded people trying to start a business, and the last thing on their mind is the label, and then all of a sudden they’re really concerned about the label. As a business owner myself, it’s exciting, and it’s pretty cool to be a part of that process.”