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This is Heidi from Wise. While many resellers and commercial printers are flocking to the commercial label market, there’s an opportunity you might be missing out on—industrial labels. While the global commercial labels market is expected to reach $21 billion this year, the industrial labels market is triple that. It’s already $61 billion and expected to top $100 billion in a few years! Industrial labels are not only a larger market than commercial labels, but they are extremely profitable. In large part, this is due to the fact that they are highly repeatable. Repeatability is a topic that is not often discussed in the print industry, but it is a key reason to branch out into products like these. Unlike one-off sales, like many prime labels, once you sell a highly repeatable product into an account, that job tends to repeat month after month, year after year, all by itself.
Industrial labels may not be as exciting to talk about, but they are sold in high volumes, and they are extremely profitable. Even if you don’t have the expertise to sell them in-house, consider being a reseller. You be the front man, and let Wise be the expertise and production muscle that stands behind you. Let’s look at seven key reasons you should consider reselling industrial labels:
First, it’s less work. With highly repeatable products, once you sell into the account, those jobs repeat over and over. Other than maintaining the relationship with that account, they often don’t require any additional work from you. This allows you to take the time you save selling into these accounts and use it to develop new accounts or cross-sell products int existing ones instead. Use our proprietary ROPE Report—which you can access through your WiseLink account— to anticipate when an order is coming up for repeat so you can contact the customer and secure the sale. Second, these jobs have a higher level of customer retention.
Once you sell an industrial label into an account, this makes the account “sticky,” and you are more likely to retain it. This creates a level of protection against losing the account to a competitor. It also makes the account more profitable. Which brings us to higher profitability. Your best customers are your existing customers, who tend to buy more frequently and in higher volumes. One study found that the success rate of selling to an existing customer is sixty to seventy percent, compared to five to twenty percent for a new customer. Another found that increasing customer retention by only 5% increases profits up to 95%. Fourth, industrial labels offer predictable revenue. With highly repeatable orders, you have a predictable income stream. This helps you plan and budget effectively. You know how much money is coming in each month from those accounts, which enables you to better forecast future revenue and make strategic decisions. In contrast, with one-off sales, revenue can be unpredictable, making it difficult to plan.
Fifth, industrial labels offer increased customer lifetime value. Customers who buy your products on a recurring basis are likely to stay with you longer and generate more revenue over their lifetimes. Lifetime customer value is often shortened to LCV. Sixth, they offer more stable cash flow. A recurring revenue model provides more cash flow stability compared to one-off sales, which can vary significantly from month to month. This stability allows you to grow and expand your customer base and portfolio, knowing that you have a reliable income stream to support you. Finally, industrial labels can help you achieve higher company valuations. Let’s face it — many resellers and commercial printers are reaching a stage at which they are looking to retire. This means either closing or selling their businesses. Businesses that sell highly repeatable products are often valued higher than those relying on one-off sales.
Investors and buyers prefer businesses with predictable revenue streams and lower risk of revenue fluctuations. If you were an investor, wouldn’t YOU?? So why should you build your business on highly repeatable products like industrial labels? Because they provide predictable revenue, higher customer retention, higher profitability, increased customer lifetime value, more stable cash flow, and higher company valuations. What’s not to like about that? Until next time! Thanks for listening, and have a great day!