PDA

View Full Version : The state of the Engraving and Awards industry



Andy Wingfield
01-17-2009, 6:44 PM
I would like to get some input from forum members from all over the World on the state of the Engraving and Awards business.
Let discuss from 2004 into the future. Do you think this industry trajectory once the current rescission is over if one of expansion, decline or has it reached a level of maturity and saturation?
What are the big changes you see taking place in the industry?
What are some of the challenges you see for folks in the industry?
If this is a topic you are interested in please let me know the part of the world you are located in and we are discussing. I am interested in a global perspective.
Regards,
Andy Wingfield
913-239-9670
913-486-6341
andy@wanlaser.com
Wanlaser.com
Trotec Laser
Thermark
Rayjet Laser

James Stokes
01-17-2009, 8:22 PM
Andy, I have been in the engraving buisness since 2000. I have done fairly well up untill the last year. Part of it has been the economy and part of it has been the low cost of the equipment. There are to many people buying lasers now and they are doing things to cheap. I will not compete with just cheap. I do not see things getting any better. People are losing their jobs and then trying to jump in to the laser business to work for themselves.

About once or twice a month some one will post on this forum wanting to know about buying a laser. Then a couple times a month people will post wanting to know how to make money with that new laser they have setting in their garage. I know of 4 differant people here in Springfield who have lasers they are trying to sell. They did not make money with them like they thought.

Joe Pelonio
01-17-2009, 8:35 PM
I still see a lot of people wanting personal items and electronics engraved. That's not something I target, and I would not want to depend upon it because some of the manufacturers are starting to offer it when you order.

I have a friend who does mainly awards. There will always be a market for youth sports trophies, but it's highly competitive. He has had to lower profits greatly to compete as the organizations he has done for years look for ways to save costs. Same with his corporate awards, some business have failed while others are going for less expensive items than in the past, but that may change with a better economy.

Tim Bateson
01-17-2009, 9:05 PM
I'm no authority here, in fact I consider myself a hobbiest with future aspirations of making this a real business. I'm very proud of the work I do, but wouldn't think of comparing it to those that have been in this business for many years. I'd be a fool to think I could run a sucessfull business without those years of experience. That right there is why a lot of people will fail. You have to know your craft and you have to be the best at what you do.
All startups have a high failure rate, lasering is no different. When I'm ready to call this a full time business, I will have the experience. Also by that time a very good reputation that should serve me well in competing with new startups. This business is built word of mouth, so reputaion and quality is everything.
I say flood the market with low cost lasers. I'm not concerned. There is still a steep learning curve. As easy as some folks here make it look, there is a lot to learn to be competitive.
My three big keys are: 1. Have a thorough and realistic business plan. 2. Pay cash for everything and owe nothing. 3. Have a thorough and realistic business plan.

Bob Keyes
01-17-2009, 9:31 PM
I believe that you will not see any appreciable recovery in industry for at least 4 years. The decline will take its toll on small business. As was said, those operating on borrowed money will soon see, if they have not already, a tightening of their money. This coupled with reduced business will spell disaster for them.

The good, honest, qualified operators will probably remain in business. And, you will see a lot of garage lasers up for sale at ever decreasing prices over the next couple of years.

This is not a get rich scheme. It is very much word of mouth and it takes a long time to develop relationships that bring repeat business.

In 2008 my industrial business suffered, but my gift and promotional trade has increased to where I did a little better than 2007. If I had a big debt to service I would be in trouble.

Anyway, that's my perspective from a little town in Kentucky.:)

Steve Chalmers
01-18-2009, 12:30 AM
This is my second full year in the industry, and have seen an almost 80% increase in commercial business in 2008 over 2007. I honestly can't say if is because of word of mouth, or due to diversification of products.

I know I continually search for new business and new products in which to offer my clients, and I believe that this has had the greatest impact on my business. I spend a set amount of time each week doing nothing but cold calls looking for new business. Now, some of the new business I've found is not necessarily the type of business I would have envisioned I would be doing when I bought the laser. But you know what? It all pays.

Will 2009 be even stronger than 2008? If I knew the answer to that question, I would have already sent the manuscript to the publisher and would be selling my new book instead of working the laser full time. All I know for sure is that each day offers new opportunities. . .ya just gotta know where to look for them.

Steve

Rodne Gold
01-18-2009, 5:34 AM
I have been in the business for 25 years and have a fairly large operation. (25 ppl)
I am not in the USA....but am in South Africa. but can syill offer a global perspective.

Here's my take on the "industry" in point form

AWARDS

1) You can make a lot of money in trophies/awards if you are creative and dont just buy and sell figurines

2) You need to import your own components for trophies , like marble bases (which are about 1/5th of the price of making em yourself in wood), columns, cup tops , plaes , nuts and bolts , rods etc to maintain a decent profit margin on the cheaper end of the scale

3) There are 2 markets in awards , those that want the biggest glitzy stuff for cheap and those that want designed specialised stuff...you can profit off both.

4) In awards , you need to have a huge variety and encompass the total field of awards to make money ..from cheap pdu junk , plaques , frames , perspex award , customised stuff , medals , shields and so on.

5) PPL are sick and tired of the old column and 4 pole trophy awards and the gold figures..everyone has em and they are merely a commodity at the lowest price...

6) The chinese are taking over in terms of production and price..and quality is improving

7) The customers who buy awards are customers for other products , like badges, point of sale displays , digital printing and so on.

8) In hard times , you can sell to corporate clients as they need to motivate staff more than ever before.

9) As with anything , your success will depend on how hard you market.

10) There is always a need for awards , in the hard times ahead , the corporates will be cutting back on spend as will clubs and orgs ...you will have have to market harder to maintain your market share and profitability and poll your customers as to what they require

11) Smaller retailers in the awards industry will go out of business..however the mom and pop orgs , with very low overheads will probably muddle thru.

12) You have to offer a complete solution to your clients , a one stop shop.

13) I predict that 2009 will be a LOT worse than 2008 - the pigeons are only coming home to roost NOW and there will be no discernable recovery till late 2010 , if by then. We are relatively lucky in SA cos we have had extremely rigid credit controls via a credit act ..that came into force mid 06 ..so we have expereinced our mini depression already..but still..things dont look rosy despite us hosting World cup soccer in 2010. We contracted by 7% last year in my business , and with inflation at 10-12%, it meant a real contraction of 20%. We do not estimate growth this year.

14) I am spending nothing on any capital equipment this year and am looking to slash my expenses , mainly in staff reductions and more efficient production and doing away with unprofitable procceses. We havent dropped our prices as this would not lead to appreciable sales volumes..we have to maintain profitability for survival.

15) I am looking further afield in my imports ...india ..china..mexico..usa cos our european supplier has becomes extremely expensive due to the appreciation of the euro..

16) I am now pushing far more customised stuff made with local components than imports and am only going to import the articles that compliment or add value to our manufactured items.
(I import appox 2 containers a yr)

ENGRAVING

1) Cheap lasers are going to kill the market ..much like cheap vinyl cutters and digital printers did ...niche markets are the way to profit

2) Capital expenditure on lasers and rotary machines will drop radically - the USA laser mnfgring market and the way lasers seem to be sold (make a million bucks in your spare time) is , imho , doomed once the far eastern machines improve.

3) There *might* be some short term spike in laser and engraving machine sales as ppl lose jobs and scramble around for money making ideas ...but this wont last and the proliferation of garage operations is not good for anyone barring those that sell machines.

4) To offer a decent engraving service , one needs both a laser and a rotary and other stuff besides

5) No one will get rich doing onesies and small jobbing..one is probably better off selling bananas from a street cart

6) If mnfgrs persist in marketing lasers as they have , they will be overwhelmed by inexperienced users support needs and unrealistic expectations as to guarantees , profitabilty etc. Therer are lots of hidden costs the laser supplier keep hidden

7) The money is to be made in using your machinery to produce stuff , not to just mark it

8) The corporate branding market is dying in that China now offer "free" branding for moderate quantities and all that buy engraving machines see this segment as the easy way to get into the market and thus cut prices to the bone to get some share and survive or make payments on their machine.

9) As in anything else , marketing is the key

10) Specialised niche markets and customer service will make you money...some ppl still look for quality and delivery over and above price

11) The use of the right tool to mark is vital...everything looks like a nail if you have a laser as a hammer...

12) Industrial work will take a dip ...especially in hard hit markets like automotive , electronics and so forth..expect a 30-40% contraction over the next 2 yrs.

13) engraving for the general public , like gifts and trinkets will proably still be reasonable..ppl always need stuff.

14) Engravers need to think out of the box and find and market new items , you already have a customer base so farm it.

15) Point of sale items will probably be reasonable too as everyone scrambles to put their product in the public eye
This is a marvellous opportunity for Co's to get massively increased market share (if they are still financially viable) and to rocket when there is growth..the intelligent ones realise that promotion and marketing is key and that POS is a cheap way to achieve that.

16) You can do well if you are a one stop shop and have multiple machines and the vision and creativity to integrate all their output to make unique products

17) I think the outlook is far worse for engraving machine sales and mnfgrs than for those in the industry. The sales/mnfgring sector need to look at what they can do to to make their customers more profitable and reach wider audiences...if you sell lasers alone...you are going to suffer. As a distributor of lasers ...I would try diversify and sell products allied to the industry as well ..like sublimation , pex fabrication machinery , rotary engravers and so on.

18) the prices of laser tubes are an issue ...the R&D costs of simple 25-50w lasers have long been amortised ...the prices should drop dramatically to compete in the chinese market

19) the price of power in the laser market is not proportionate to mnfgring costs..double the power shouldnt be double the price.

20) In your case...the strength of the euro must be
hurting as Trotec is mnfgred in europe? It's most likely cheaper for euro customers to import from the USA than buy locally?

At the end of it all, I dont think the future is particularily rosy right now and if one can survive the next 2 yrs...consider yourself having done well.

Frank Corker
01-18-2009, 8:26 AM
Ditto (.....well it was how I was thinking too)

Scott Shepherd
01-18-2009, 9:05 AM
First of all, thank you Rodney for such an information packed answer (as everything you say is). Excellent, excellent advice there.

Now, to venture off and take a risk of offending people....

I see the failure of anyone is business as a failure on their part, not a failure on the "market". I interact with small business owners all the time. In the last year, I have seen no less than 5 people either go out of business or really struggle. In every case, I spoke with them about branching into markets I saw growing steady. Not a single one of them wanted to do it. It required no investment, no nothing, just calling on different people. They flat out would not do it. I would see these people struggling and I'd give them the names of people I personally knew and told them to call them for work, and I'd ask the people I knew if they ever heard from them and they would always say "No, sure haven't".

Each time I would see them, they would tell me how poor business was and how tough the market and economy was. Each time I would see them, they'd whip out something new they had spent money on, like $2000 worth of brochures or a $5000 website. Yet, they had no work and wouldn't call the people who needed their services.

So I see so much of this entire situation as self induced and poorly managed. I'm no rocket scientist by any means and my business could fail 6 months from now. I hope not, but if it does, it will be my fault, not the markets. It will be my fault because I didn't adapt TO the market. I will fail because I wasn't creative enough. I will fail because I couldn't get outside my comfort zone and take the business in a different direction.

Every day when I get up, I go to work and I actually TRY to gain customers that day. I do it through networking, organizations, groups, anything I can do to get in front of people who need my service. However, I know many small business owners who are struggling and they sit by the phone and wait for it to ring. They do not advertise, they do not market, they aren't in the yellow pages or on Google's search engine, yet they think the phone will magically ring and they will have work. It just doesn't work that way.

Demand crappy in your area? Go outside it. Things tough in your state? Go outside it. Things tough in your country, go outside it? It todays world with the internet, there is almost no excuse for not marketing your services outside of your local area if you are looking for work. It's not painting someone's house, it's engraving. You make the product, stick it in a box, ship it anywhere in the world, and move to the next one.

At no point in our history has selling outside your neighborhood been so easy and effective. Yet so many small business owners are stuck in their own mind, thinking they just can't find work. The work is out there, you just have to go get it. It's not going to find you, you have to find it.

Just my opinion. I'll get off my soapbox now....

Judith Halliday
01-18-2009, 10:05 AM
In my real life, I am both a Professor and an Industrial Organizational Psychologist (PhD). The engraving and CNC fosters my creative side. What is being echoed here, especially from Rodne and Scott could not have been written any better in any journal, business book, or text. I provide assistance to businesses in order for them to realize profit potentials through strategic management. There will always be forces that are uncontrollable by you (mother nature, accidents, etc.). However, there is always a local market and there is always a global market. Tapping into the markets is no piece of cake, and you must consider if you have the “Mojo” to tackle the tough issues for years to come. If I can extend an extra perspective, utilize built up capital to purchase items if you can. You will be under less psychological stress than if you had to worry about selling it because it is sitting in the garage wasting $400.00 a month. It’s a term I refer to as cognitive dissonance. If you can reduce the dissonance, you will be much happier.

Ensure you have another income venue for the rough patches. The economy will not see an appreciable upswing for a few more years.

Cheers,
Judy

Paul Brinkmeyer
01-18-2009, 11:02 AM
Rodne (and Frank) Thanks for the view from your part of the world. I always enjoy your views and try to apply it to me.

Steve....I have followed more than one lead I have seen here on the creek. You never know when an idea will turn into something that will add to the bottom line, and also be fun. Keep the ideas flowing.

One thing I learned to do in my former life was to listen to every level of employee/customer, they all see it differently and I do not want to miss that good idea.

Mike Null
01-18-2009, 11:51 AM
Steve

To your extremely well made point, 90% of my business is from out of state.

Dave Johnson29
01-18-2009, 1:46 PM
I see the failure of anyone is business as a failure on their part, not a failure on the "market".


Scott,

I have to agree emphatically. Your description of small business people was as if you had been reading my emails. I too have advised people to do stuff and even offered to help them do it, but they always have a reason (excuse) why they can't do that or why it will not work.

I live in a fairly small community and for the life of me I cannot understand why these people prefer to moan about tough times rather than do something about tough times.

Quite frankly, I have now stopped trying to help. I have been running my own businesses for 40+ years. I build them up then sell them as a going concern so I believe I know what is required. I have a wealth of knowledge in business admin., marketing and customer relations and it is frustrating to see these small businesses failing because of lack of effort.

It is true that the economy is not going well, but wringing your hands and waiting for the sky to fall is not going to help. It's an old cliche, but when the going gets tough, the tough get going.

Andy Wingfield
01-21-2009, 7:24 AM
Hello All,

Thank you for your very insightful and informative answers and views about the state of the engraving and awards business.
I am hoping I can encourage members from all over the world to reply.
Do we have some Europeans?
Folks from the Middle East, Asia, South America, or North Africa who would like to reply.

Regards,

Andy Wingfield

Carrol Fleming
01-21-2009, 9:43 AM
I live in Zambia, Central Africa, and have had my machine for nine months. Fortunately it is my "other job" and whilst it would be great if it made heaps of money, it is slowly paying itself back.

In Zambia I do not have easy access to product blanks and supplies - I tried to get some LP-20 from South Africa - what a joke!!! I eventually informed my husband that it was vitally important for me to visit our girls at boarding school in Johannesburg and went to the supplier and bought the stuff in person - wonderful people but no credit card facilities and no interest in sending stuff via UPS or any other courier!! :(

Anyway, as a result of this I have to find easily available stuff to engrave - lots of experimentation - you should see my engrave yard!! :D I am working with an acquaintance who is setting up a framing and wood working business but we have still not managed wood sheets thin enough for me to cut.

The majority of my business at the moment is trophies for sporting events and as traditional trophies are not easily available here and there is also more of a demand for useful prizes I do glasses, multi-tools fishing reels ..... etc. Fortunately Zambia has a reasonably small community and my customers will support me and recommend me to their friends because they know me, or my family, or their grandfather knew my grandfather ... so I am fairly confident I will keep their business as long as I maintain quality.

My aim for this year is to hit the tourist market - the fancy lodges are not interested - tried them - but I am sure the backpacker and normal tourist crowd will go for small and trendy. Working on plans for an outlet that will not gobble my profits.

I know I still have a vast, untapped market out there, I just have carry on convincing people that they need me. I carry a bag of samples wherever I go and produce it and my business cards at the slightest hint of potential business. (I think people are starting to avoid me and my trendy retro striped bag of amazing stuff ;)). My husband has even started grabbing my bag and giving the sales patter - no one is safe!

From Darkest Africa
Carrol

Dave Johnson29
01-21-2009, 11:15 AM
I live in Zambia, Central Africa

...snip
I carry a bag of samples wherever I go and produce it and my business cards at the slightest hint of potential business. (I think people are starting to avoid me and my trendy retro striped bag of amazing stuff ;)). My husband has even started grabbing my bag and giving the sales patter - no one is safe!


Hi Carrol,

I had to laugh at the "avoid me..." quip. Loved that.

You have a great attitude and approach and I am sure your business will flourish. Even more so with that unpaid Sales employee. :)

Rodne Gold
01-21-2009, 12:07 PM
Carol...wont Maizeys supply you with stuff ...they carry a huge range of laser engraveables.
AMS also carry , as do Rubber stamps and engraving.
Trophys are available from Dan at Steelware distributors in durban..I'm sure he will be more than helpful with components and figurines.
What machine are you running?
You can call me on 027 021 5924123 for more info on suppliers in Southern Africa. I am at work from 8.30 to 12 most days.

Carrol Fleming
01-21-2009, 12:53 PM
Hi Rodne
I personally went to Maizey and AMS and bought some stuff - very helpful companies, but they will only ship to Zambia if I transfer money into their bank account - exorbitant bank charges from here - AMS have no credit card facilities - and I must use my own courier company. I did look into that but the only company I had any luck with is a major import export bunch who would charge a collection fee, and then charge for transport by land in a truck and then I would have to organise a customs clearance company at this end, pay their fees and import duty. When you look at bringing up one 50g bottle of LP-20 it is already over three times the price before we got to customs at this end. If I use UPS from the States or China I pay UPS charges and if customs catch it at this end I would pay that. So far so good but I still factor in potential customs costs when doing my pricing. The problem is UPS from that far away is expensive so I have to weigh up how much I can afford to spend to make the courier charges economically feasable!

Stock from the UK comes via a locally managed courier company where I can pay COD on weight, not the cheapest stock but probably the least expensive freight.

I ordered some stuff from Chewbarkers and they used USPS, according to the online tracking the parcel is deliverd to the foreign country but according to the post office in Lusaka they have no idea where it is and I must wait for a delivery slip, which is fine, but I used a physical address (my mistake, I thought couriers deliverd - USPS does, to the post office!!) the Postal System in Zambia is P O Boxes and they don't have a box number for the delivery slip .....:confused: Catch22 or what?!

So, simple business economics, how much can I charge for the finished article and what will my profit be? ..... I use as many local materials as possible. :D

I can only dream of overnight delivery of sample packs ..... Oops, my coffee is getting cold.

Carrol

Thad Nickoley
01-21-2009, 1:44 PM
Technology is always going to bring down the price of equipment. 10 years ago most of you probably did not have a web site. Now you live by the internet. I remember 15-20 years ago driving down the freeway, if you saw someone on a cell phone the first thought was "wow look at that, a real rich person". Now you cant drive down the freeway and find someone not on a cell phone. I guess my point being what you do with your equipment is up to you. I am sure there are going to be more and more "garage" lasers but that sholdn't be an excuss for not making it in the business.
How may of you have ab-rollers in the garage and still have a spare tire around the middle? I know that I am guilty!!!:eek: