Overseas Print Orders Stay Near 9%: How Packaging Printers Can Escape Thin Margins

Beijing Packaging Company

A review of the Printing Machinery Equipment and Materials Industry Association's yearly figures can be consolidated into a table showing the state of overseas printed materials in recent years. A look at the chart makes one point clear:

Export output value for overseas printed materials has risen quickly and steadily, yet its share of total printing output value has stayed close to 9%.

It has never moved past 10%.

As the mystery around printing prices fades and pricing becomes more transparent, printing companies' profits have fallen as well.

Some have been pushed into meager margins, while others are trapped in a loss-making cycle where deficits keep growing. Layer on rising labor costs year after year and widespread overcapacity, and competition has become white-hot. The industry's shift into a thin-margin era is an undisputed fact. Besides exploring outside markets more aggressively, winning more overseas orders has become another useful route.

First-hand orders. These involve dealing directly with overseas customers. That means a printing company must form a strong foreign trade team, and such a team cannot be built quickly.

A longer transition period is inevitable. First-hand orders also call for heavy upfront investment and a persistent, serious attitude.

Neither element is optional.

Printing companies should proceed according to their own resources.

Second-hand orders. These are orders obtained through domestic or foreign intermediary companies.

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This approach tends to suit small and medium-sized companies better.

Larger companies often prefer to engage international major clients directly.

Such players typically choose a high-end, large-scale production path. As the market economy continues to mature,

The division of labor in the market has also become more refined.

The emergence of intermediary firms has thus become an inevitable market outcome.

First, customer information may be unclear. This often stems from objective factors such as language barriers and cultural differences, especially with second-hand orders.

These orders must also pass through an intermediary, a critical step that can distort the customer's requirements before they reach the printing company. As a result, the company may fail to meet those requirements.

They may even suffer major economic losses.

Unclear business types. Many printing companies face this same issue in the domestic market: they accept every kind of order.

Yet they lack a star product.

As a result, they cannot build a strong brand effect. Some firms, realizing how serious this problem is, drop weaker business lines and focus on becoming refined, specialized and strong.

Overall strength still needs improvement. In the past, China's development relied largely on labor-intensive operations to create a price advantage, but rising labor costs year after year have nearly erased that edge. Overseas orders also frequently demand fast delivery, small batch sizes and high quality. How can printing companies strengthen themselves and meet so many customer requirements?

This is another challenge that must be tackled.

—This article is reprinted from China Packaging Network (pack.cn), original link: http://news.pack.cn/show-369950.html