Opinion: Mesh Direct collapse highlights ‘race to the bottom’ pricing

The recent voluntary administration of Mesh Direct highlights the wider problem of race to the bottom pricing wars plaguing the printed mesh production industry, according to Stephen Lamont, owner of Townsville-based Lamont Print & Signs.

“The race to the bottom of any product only leaves in its wake negative effects, and in this case, a huge loss to all involved,” said Lamont.

Mesh Direct was placed in voluntary administration earlier this month. It is understood the print broker owes number of wide format printers hundreds of thousands of dollars as well as staff entitlements of more than $250,000 – with total debt calculated to be $1,924,086.53.

“While blame will no doubt be allocated and fingers pointed, the commercial environment that we now are part of, means that all work produced by any company needs to have sufficient margin and discounting costs at all levels,” said Lamont.

“It also diminishes the value of the product as the production from a print perspective is compromised by using the cheapest media, lower print quality and using the ‘it’s only mesh and it’s short term’ as an excuse to produce a compromised print work.

“Unfortunately, there exists in the printed fence mesh industry those who not only engage in this type of business, but enable as suppliers, those companies that do this.

“In my opinion, it is a bit hypocritical to be saying that this was Mesh Direct’s fault for seeking the cheapest price, when as trade print providers, it was the very same companies who helped them get to this point by continuing to discount in the hope that more volume would eventually deliver a profit,” he said.

According to Lamont, printed fence mesh is a growing market in Australia, to the surprise of some of the major print machinery providers.

“With companies such as HP and Durst and others now providing dedicated platforms that do an excellent job of printing high quality product, and with automation now taking the finishing to new speeds, this allows companies to make a solid ROI if they don’t enter the discounting spiral.

“While discounting printed fence mesh may seem to be a quick boost to sales in a growing market, it comes with significant risks.

“From product perception problems to brand dilution to outright business destruction in the case of Mesh Direct and now significant profit loss of their enabling suppliers, the negative effects far outweigh the short-term gains.”

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