Five Ways Label Companies Can Create a Niche

Posted by Rock LaManna

Create a Niche and Experience Growth

When people refer to Sohn Manufacturing, they tend to lump them in with other label companies, but don’t be misled.  You can experience growth in the label or printing industry – often explosive growth – and you don’t have to be a “label company” at all.  It’s all based on finding the right niche.My colleagues and I use broad-based terms like “label company” and “printing industry” quite a bit, but companies like Sohn fall outside that purview.  They’re lumped into the mix when they provide ancillary businesses related to label printing.   

If the name didn’t give it away, Sohn Manufacturing isn’t exactly a printer, although they do some contract printing.  They’re manufacturers, having built tabletop, stand-alone printers for cost-effective flexo printing, die-cutting and label printing.  

They let the big boys like Mark Andy focus on the big presses, while they turn their attention to the smaller label converters and printers.  And that’s an incredibly astute strategy.

 Bigger Isn't Always Better

Bigger Isn’t Always Better

I discovered Sohn Manufacturing at the recent GOA Expo in Miami.  I love attending trade shows.  Like everyone else, I ooh and aah at all the big iron on the floor.  Companies like HP or Mark Andy draw big crowds, but I like to seek out companies like Sohn, who focus more on small niche printers.  Because in an industry like label printing, someone who caters to the little guy wins big too.

That’s because there are so many smaller label companies out there.  According to Blaige & Company, the converting industry is experiencing consolidation, but there are still many smaller companies out there.  He reports that there are 1,450 US plastics processors, with 78% of the market with companies under $50 mm in sales.

Blaige’s numbers reflect the converting industry as a whole, but they definitely apply to the label sector.  An astute company like Sohn Manufacturing had the vision to see this back in the 1950s.  They realized there was, and would always be, a need for custom short-run, quick-turn label printing.

Sohn’s particular niche is their affordable rotary die-cutting machines.  They were early innovators in rotary tooling and converting processes, and today they make rotary dies for a variety of substrates.  The machines, such as the Rotary Wizard, are extremely time-efficient, precise and effective.  They’re also priced affordably, ideal for the small printer.

The niche has resulted in a long, profitable run for the company.  What allowed Sohn to establish its niche?  Here are some of my top five takeaways:

1. Avoid being literal.  Just because you’re in the label printing business doesn’t mean you have to be a printer.  Sohn realized that someone had to provide the infrastructure necessary for label printing, and so it decided to produce ancillary materials.

2. Think beyond sexy.  Sexy sells in car and beer commercials (at least that’s the theory), but that doesn’t mean it will bring profit to your bottom line.  It’s amazing how much opportunity is out there in the “boring” industries.

I recently attended a pharmaceutical label printing conference regarding compliance.  Yes, pharmaceutical labels are not the most glamorous field, but they are a multi-billion dollar industry – and growing!  What’s boring about making big profits?

3. Speak a different language.  I’m not suggesting you need to learn Mandarin or Spanish, although it certainly wouldn’t hurt in today’s global economy. However, you do need to develop a specific expertise and learn the language of a niche field.  For Sohn, it was in rotary-die machines.  They are machinists by trade, and they leveraged that expertise to build their niche.

4. Find your field, and stick with it.  Lemmings tend to nose-dive off a cliff, and you will too if you go running and screaming for the “next big thing.”  Slow and steady will win the race.  Pinpoint an area of steady, climbing growth, and then work, work, work on that niche.  Success won’t come overnight, but it will arrive eventually.

5. Announce your niche.  The hardest thing for an entrepreneur is to forsake all the business they think they’re “giving up” by creating a niche in a particular area.  Think about it this way:  How can you give up anything you don’t have?      

For example, if you’re reluctant to declare yourself a label printer for pharmaceuticals because you’re worried you’ll lose out on commercial printing opportunities, you’re making a dangerous assumption.  What makes you so sure you’d be able to get that commercial printing in the first place?  And at what price?

By declaring your niche, you commit yourself to a particular sector.  You demonstrate to potential clients that you are an innovative expert in a field, and that you are “all in” on a niche.  You’ll get far more business being a master than a jack-of-all-trades – a marketing fundamental that owners never quite trust.

I love discovering companies like Sohn Manufacturing because it always demonstrates how much growth potential is available for companies who strategically plan for a niche market, and stick to it.  More revenue, more profit, more opportunity = more wealth!  Who says you need to be a label printer to make it in the label printing industry?

Business Matchmaking

Topics: Converting Industry, Printing Industry, Strategy, Label Industry