By Ed Avis
Facilities management is less important overall to reprographics firms today than it was 15 years ago, and the space reprographics firms occupy is larger. Those are two take-aways from the the 2020/21 APDSP Financial Benchmarking Study.
The study is complete and the report has been written. It is currently being printed and in a couple of weeks hard copies will be sent to firms that completed the survey. In addition, on November 16 at 10 a.m. Central, Mitch Evans and Rod Bristol from Graphics Arts Advisors will lead a webinar on how to best use the report to improve your business.
Who Participated?
The survey was taken by 56 firms, though not every firm completed the entire survey. The average sales of participants was $2.7 million. More than half of respondents have at least one full-time outside sales rep, and a quarter employ two or more reps.
The respondents were spread throughout North America, with the greatest percentage (32.4 percent) from the Southeast, followed by 29.4 percent from the Western states.
As everyone knows, the reprographics industry is mature. That fact was highlighted by this statistic: Companies that responded to the survey have been in business an average of 41 years.
Three Take-Aways
The 72-page report is packed with information, including information ranging from average sales per employee to a breakdown of product categories by profitability to the average price of a D-size plain paper print. Companies that took the survey will receive the report in full, but here are three interesting take-aways:
- FM is becoming less important. In previous surveys of this type, facilities management represented over 20 percent of sales. In this version, it represented only 7.44 percent. In fact, only a quarter of the respondents reported any sales in facilities management.
- Employees have way more room to work. The average space occupied by respondents to this survey was 20,168 square feet, compared to 18,742 square feet in the 2006 survey. However, the average number of employees in the 2006 survey was 40, but it was only 16 in this survey.
- Its pays to be an APDSP member (71 percent of respondents were members). Sales at member firms were almost double the sales at non-member firms. Members and non-members reported about the same decline in sales during 2020 (presumably due to COVID); however, non-member firms project an average continuing decline of 2 percent for 2021, while member firms expect sales to increase an average of 5 percent.
Three Suggestions
The study authors included a long list of suggestions to improve profitability based on the data. Here are three:
- Choose carefully whether to make a product in-house or farm it out. According to the survey, overall, brokered sales make up only about 2 percent of gross sales, but they have a comfortable 58 percent profit margin BEFORE labor costs. And since they have essentially no labor costs, they may represent an underutilized profit opportunity.
- Consider an acquisition or new location. It might seem odd to consider expanding so soon after COVID, but several companies in the repro industry are growing, and the data shows that multiple-location firms have higher owner compensation and lower overhead.
- Make sure your salespeople are doing their jobs. The data show that the average outside salesperson sells significantly less than they did in 2006. There could be multiple reasons for that, but if the reason is that salespeople have been around a long time and are comfortable with their situation – “fat and happy” – it may be time to shake things up.
Bottom line: There is tons of good information in the report. If you completed the survey, watch for the report in your mailbox in the next couple of weeks, and click here to register for the webinar on November 16.