OCA Group is gearing up to offer a huge suite of trade services to printers around Australia, letting them build their business before investing in kit.

Chief executive Naresh Gulati says in about two months the company, via its subsidiary Print Bound, will offer printers services for the entire print process from design to distribution, including software, for every job except high-end packaging and labels.

Gulati says too many printers are investing in expensive equipment or software before they have the income to pay for it, and that using the resources of another printer while they attract clients is a better path.

“There needs to be a mechanism where printers find clients first and then buy the equipment they need, the reverse of usual,” he says.

“I will sit down one-on-one with anyone, no obligation, and help them by working out a price and offering that suits their needs.

“Printers will be able to focus on their core strengths and yet be able to compete with better offerings at virtually no investment.”

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The move by OCA comes as part of what is becoming a tidal wave of trade printing investments over the past few months, with all the major players positioning themselves to become the manufacturing arm of smaller printers, and new players like Vistaprint entering the market.

Gulati says low margins and increasing vicious price wars are forcing too many printers into financial situations they cannot get out of, having bought new kit and not seeing the business to feed it.

“The fierce competition has led some printers to resort to ‘low price’ being their unique selling point, which is nothing but a shortcut to graveyard,” he says.

“Such businesses will inevitably die irrespective of their size – it’s a race to the bottom. Price wars result only in one thing – erosion of profits.

“It’s only a matter of time when the reality catches up in such cases. They pose all sorts of problems be it cash flow, inability to meet their interest or financing obligations, lack of funds to upgrade technology leading to reduced competitiveness, erosion of brand, and the list goes on.

“The price wars practically are nothing but zero sum games. No one wins. Everyone loses.

“Investment in an asset that will not be fully utilized means the return on assets will be bad and it will eat up the profits and pushing the printer back into that vicious cycle.”

Gulati says one of the main problems is a lack of information and support for printers, leading to them making bad financial decisions.

“The print industry is highly fragmented and is predominantly family business. Generally the owners of the print companies are the owner operators with strong hands on experience,” he says.

“They work hard in their business but the key to success lies in working on the business.

“As they are often more technical than business minded, they don’t take into account the running cots of the machine – staff, power, infrastructure – and they have no time to find the clients to fill it.

“Printers are also open to being hijacked by suppliers, they end up buying in excitement on promises that are never delivered.

“They need more help and education on getting the most out of their investments and while some suppliers have great support, many will simply sell equipment and walk away.

“Printers need supplier partners who are an extension of their own business, and we can be that.”

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Gulati says even if they don’t use his services, printers should work with each other to share infrastructure for extra capacity, out-of-state jobs and different technology offerings.

“It is time to consolidate, leverage one’s strength and work in a collaborative manner with fellow printers and allied suppliers. It works very well,” he says.

“For example, DHL has been our major distribution supplier for more than a decade, but they are our competitor too. This works as long as there is a clear understanding on the basis of the relationship.

“You need to have faith in each other and be honest friends and not backstab each other. As long as you both give and take and take care of each other before yourself it works.”

Gulati says printers who partner up with OCA will, in addition to print, design and distribution services, be able to licence workflow software or have OCA handle it themselves.

He says setting up software systems can cost up to $200,000 before staff and other running costs, and he will be able to offer it for a quarter of the price.

OCA is based in Melbourne, much of it moving into the old Geon facility next month, and while there are no immediate plans to expand production to other states, Gulati says this will be evaluated according to demand.

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