Color Label Solutions

Color Label Solutions
www.colorlabelsolutions.com

Monday, July 9, 2018

Making Money On-Demand


Recently, I attended a webinar by HP titled, “Cost vs Value; how to monetize digitally printed packaging”.  In this webinar I found HP lays out the reasons for Color Label Solutions to exist: by explaining the benefits and returns for moving to on-demand color labels and packages. 



In addition, HP provides a ROI tool to calculate the potential return on investment for moving to on-demand color, or in their terms, “Packaging Decoration”.  In this post, I’ll summarize the paper; and provide links to download the whitepaper and get the calculator.

Overall, HP states that on-demand color packaging and labeling has 3 key advantages when compared to preprinted:

  • No Plates
  • No Press Setup
  • Easy configuration


These advantages lead to the benefits:
  • More cost-effective printing of small batches
  • Increased agility; by reducing the time to market
  • Increased variation and personalization of labels and packages, in which every item is “one-off”.


The benefits of on-demand color increase the value to the company, both internal and external to customers.  But where does a company find the value to pay for the typical cost per unit increase in using on-demand color labels and packages?

HP offers 4 areas to research inside a company to find returns from moving to on-demand:
  1. Supply Chain- Adding efficiencies
  2. Marketing-Extending customer engagement
  3. Finance-Increasing overall profitability
  4. Business Development-Developing/Testing new market opportunities

#1: In the Supply Chain, HP states moving to on-demand:
  • Reduces warehousing
  • Frees up capital trapped in inventory
  • Allows for fewer materials to be ordered
  • Reduces obsolesces of artwork changes
On-Demand saves money throughout the supply chain.


#2: In Marketing, HP opines that on-demand labels and packages are the final opportunity to convince customers to purchase their products.  In addition, on-demand color labels and packages enable companies to strengthen brands making it easy to set up product versions and localized promotions.  And finally, on-demand color enables brands to invest in promotions and advertising for less than traditional methods.




#3: In Finance, HP says on-demand color offers ways to increase sales and margins; a means to increase overall profitability.  By understanding the ratio of gross dollar margin divided by the current cost of “decorating” (the incremental cost of on-demand) labels and packages, companies can calculate the value or return in the investment.  For most companies, HP says the increased sales required to pay for the increased cost of on-demand is less than 1%.



#4: In Business Development, HP states that on-demand makes it easy to develop:
  • New consumer categories
  • New channels
  • New territories
  • Test markets, special programs, regional customization and tactical e-commerce activities

On-demand enables companies to customize product packaging and labels which is different than traditional channels; making testing of new offers easy to do with limited impact on existing paths to market.

For further information, download this white paper here: http://www8.hp.com/h20195/v2/GetPDF.aspx/4AA7-2182EEW.pdf 



In the companion RODPI (Return on Packaging Decoration Investments) Excel sheet, HP gives companies the methods to calculate their return on investment in moving to on-demand.  Email HP here, ropdi@hp.comto get this ROI calculator. 

After reviewing this white paper and calculator, I believe current customers of on-demand color tools can find ideas on how to increase their return on this investment.  Further, this white paper gives non-users ideas on how on-demand color labels and packaging will make money for their companies.

With the changes in technologies, on-demand color labels and packages make financial sense for many if not most every company.  Contact us to discuss how on-demand solutions we sell will help your company increase returns and support your areas for growth.

Guy Mikel
855-962-7670