Commercial Printers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 23,400 commercial printers in the US produce brochures, ads, books, packaging, business cards, and other output for clients. They are in the midst of a transition to digital technologies and electronic media.

Rapid Technological Change

The transition to digital technology has accelerated the rate of equipment change in the printing industry.

Weak Printing Demand

The commercial printing industry has seen falling demand for printed advertising materials caused by the shift to electronic media.

Industry size & Structure

The average commercial printer has about 16 employees and generates $3.3 million in annual revenue.

    • The industry consists of 23,400 firms with 377,800 employees and revenue of $78 billion.
    • Digital communications are replacing print for advertising, direct mail, magazines, books, and other business publications.
    • Digital printing has reduced the barriers to entry for commercial printing. The new competition consists of quick printing companies and companies doing their own printing in-house.
    • Industry-wide employment fell 20% from 2011 to 2020.
    • Most firms are privately-held and 85% of firms have less than 20 employees.
    • Large firms include RR Donnelley, Quad/Graphics, Transcontinental Printing, and Cenveo.
                                    Industry Forecast
                                    Commercial Printers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Nov 9, 2022 - Direct Mail Printers May Seek Expansion Opportunities
                                    • Some commercial printers with a significant direct mail business may look to expand their geographic reach as the US Postal Service (USPS) has lowered its performance goals, according to Printing Impressions. In addition to increasing postage rates, in 2021 the USPS reduced its delivery time standard whereby any region that achieves a 90.25% on-time grade would receive an “above target” rating. The downgrade in USPS performance metrics is prompting some direct mail print firms to extend their geographic footprints either through acquisitions or expanding operations organically to ensure timely delivery for customers.
                                    • At the height of the pandemic, commercial printers often struggled to buy enough paper to meet demand. Like many other products, paper was often in short supply due to pandemic-related supply chain disruptions. Now, many printers are experiencing the opposite problem. Amid paper shortages, printers often stockpiled as much paper as they could, and now many firms are struggling with excess inventory. Carrying too much inventory creates a cash flow problem. To clear inventory and free up cash, industry insiders suggest speeding up production, shipping, and billing as much as possible. Some firms are increasing production by adding shifts if supported by adequate order volume.
                                    • As some supply chain issues experienced during the pandemic have eased, book printers are seeing less pressure on production capacity and lead times. According to an October survey by the Book Manufacturers’ Institute, printers of hardcover books said they were running at 82% of capacity in October compared to 91% in September. The average lead time for hardcover book printers in October fell to 62 days from September’s 84 days. Paperback printers’ capacity utilization dropped to 83% from 91% in September, and their lead times decreased from 61 days to 45 days.
                                    • Commercial printers and packaging firms posted robust revenue and profits in the second quarter of 2022, according to Semper Workforce Solutions’ most recent survey released in late September. Many firms notched record second-quarter profits: 70% of survey respondents said they had a net profit margin of 8% or more. However, the Semper report suggested firms should use their windfall to build a cash safety net to cope with interest rate hikes. Most printers and packaging firms reported strong propensities for hiring but have shifted from internal referral strategies to heavy use of job boards and temp agencies. Despite increased economic challenges, most firms expect strong sales in Q3.
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