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Profitable Sublimating
This month our intention was to present just an article on profitable full color inkjet sublimation. We have included thoughts about that, but expanded the scope of the article.
With January being the official start of a new century, we decided to offer our thoughts on sublimation opportunities (and possibly threats) for the entire year of 2001.
We think 2001 will be a pivotal year for many. No, you probably won't go broke, if you have a solid company now, and do nothing with sublimation. However, the decisions you make this year will affect your ability to compete and prosper, for many years after this one.
Sublimation Is Profitable
We lead off with the above simple sub-title because it is true. The statement will be even truer, each month of this year. There is no longer a question about "if" sublimation will be profitable. The real questions are: how much, how fast and what's coming next?
Market forces are both pushing and pulling the awards industry towards a year that will see an explosion of sublimation opportunities.
Sublimation equipment is getting cheaper, as are the consumables and sublimatable items. Production methods are faster, simpler, and more reliable and user friendly. The demand for sublimatable products is increasing greatly, as the public becomes more aware of what seems like unlimited ability to fulfill their needs and desires.
The opportunities and the dangers of sublimation come from the same facts. As it becomes cheaper, faster and better, it becomes more profitable for you, and your competition, and your competition that hasn't even started up yet, but will.
Competition doesn't have to be a problem however, if you make yourself the lead dog in the pack. At the very least, the rest of the "mutts" will have a more restricted view.
Let's examine some of the opportunities and dangers presented by sublimation, by starting with the equipment.
For a typical awards company there is only three pieces of equipment they might not have, to begin sublimation. That equipment consists of: the right kind of printer (laser or inkjet), sublimation cartridges (laser or inkjet) and a heat press.
Printer prices are relatively "dirt" cheap. It is no longer necessary to buy a $1,000 printer to do single color sublimation. A refurbished $260 older printer will perform very nicely. Inkjet printer prices continue to drop. The Epson 980 remains relatively cheap while we have seen $99 price tags on the 900. Even high end Hewlett-Packard dropped their prices $250 when they introduced their full color HP 4550 laser printer to replace last year's 4500.
Sublimation cartridge prices continue to go down. In terms of 1995 dollars, single color laser printer cartridges cost about half as much, delivering a typical transfer for about 10-15 cents a page.
Sublimation inks, for full color inkjet printers, are falling so fast they are almost breaking the sound barrier. In less than a year, average transfer costs per page has dropped from around $1.50 a page to a reliably reported .60 to .70 a page, from some suppliers.
Increased supplier competition and the relatively new bulk ink systems for the Epson printers are the primary reasons for this dramatic drop. It may well continue.
While there are relatively few suppliers of cartridges for full color laser printers, we don't see transfer costs rising. While transfer costs vary widely between suppliers (.25 to .50 a page), we see increased competition keeping those costs the same or slightly lower. As the toners continue to improve we also see this type system replacing full color thermal wax transfers for metal.
Heat press prices have never been better. Excellent, new 16x20 heat presses only run $600-$900, with premium presses (with lots of "bells & whistles") running about $1,200+. These are inexpensive prices for something that lasts about like a refrigerator. A few companies (HIX, for example) are even offering little "starter" 9x12 swing-away presses, for under $300, that can sublimate thick items.
Just as exciting as the relatively low entry prices for sublimation is the fact that it is now much easier to do.
Initially, sublimation laser toners (or even further back, copier toners) had to transferred directly to the metal and then the plate cleaned. Now, more powerful toners can be transferred through the plastic cover on the plate, which saves considerable time. The labor and material costs of single color sublimation is almost a non-issue, unless you want it free.
The most dramatic simplicity has taken place in full color inkjet sublimation. While inkjet sublimation suffered normal growing pains in the beginning, the technology and the support is getting close to first-class.
It is still not quite a "plug n' play" proposition, but it is getting close. Now, with most suppliers, when you buy inks for the first time, you get effective color correction software with it. There is still a learning curve, but it gets shorter every month.
Trade show seminars are also making things easier to learn, as well as the flood of information on the web. You can just about learn anything you want to know, without ever leaving your computer screen.
As the numbers of dealers doing inkjet sublimation are increasing, so too are the numbers of product manufacturers.
In an incredibly short period, manufacturers have gone from offering a few, full color sublimatable products to a vast array. Available are bag tags, beverage wraps, calendars, car flags, clipboards, clock faces, jigsaw puzzles, license plates, signage, tiles (for plaques), patches, mouse pads, tote bags and more, with much more coming in 2001.
About now I can just see an ol' line awards dealer muttering, "I want to sell profitable awards, not trinkets in place of them." That is a worthy and correct sentiment, but that is not where we see the full color sublimation industry headed.
We think the highly profitable niche for full color sublimation is going to be in providing personalized advertising specialties. While we will save a "meatier" discussion for a later article, we will make these observations.
First, the advertising specialty industry is a multi-billion dollar a year industry and that ain't built on just ball point pens and key chain tags.
Second, there is already a growing demand from corporate customers for unique, personalized products to give to their most valued customers and for "theme" promotions.
Third, there is already a small group of dealers cashing in, on this growing and profitable niche, by using sublimation. We understand why they are not saying much.
In Conclusion
With the speed and cost effectiveness (labor is not getting any cheaper or easier to find) of single color sublimation, and the increasing versatility of full color sublimation, the wave of the future for most dealers is here, now.
It's not perfect. It will get better. But, it is here. If we were in the retail awards business (and not doing sublimation) we would start as fast as possible.
Because the two methods do have different abilities, we would pick the method that we thought would give us the fastest return, first. If we were already doing one type of sublimation we would quickly add the other.
Twenty years ago, computer engravers burst upon the scene. Many thought they were a "fad". Now, unless you have a laser engraver, could you picture making any money, without one?
Within two years, most will think the same about sublimation.