Onlineprinters is among the three biggest online printing companies in Europe. Just a few weeks ago they announced customer number 1 million and even though this is “just” a number it’s still impressive. With more than 183 offset printing units, a tight partnership with companies such as Heidelberg, HP, and Horizon the company still look for double-digit growth in the years ahead.
At the recent Press Tour 2018 INKSH in cooperation with WhatTheyThink.com got the chance to talk to CEO Dr. Michael Fries about this and that.
Enjoy the very frank and open interview – and thank you Michae Fries for your time!
Onlineprinters is one of the leading online print companies in Europe. We are B to B online print company that is, we sell flyers, posters, business cards, brochures, large format print, promotional articles all over Europe via our online shop. And we also have two subsidiaries, one in the UK, one in Denmark, Denmark particularly with lasertryk and Solopress who are leading in the Nordics and UK respectively. So with all brands were well present all over Europe.
No, we’re one of the top three players in Europe. We have 1,400 employees. And some 200 million euro in revenue.
The original company was founded in 1984. And was it normal family print business and on top of that business, the son of the original founder founded Onlineprinters and the online printing business. And yeah, he was very good at that. And so the company grew from 30 employees in 2004 when online printing started to now more 1,400 all over Europe.
At that time people really didn’t see the opportunity. Fortunately, Walter Meyer saw the opportunity and his father was also not too convinced, but he said, you take this amount of money and go for it and if the money has run out then you just forget it and the money never went out. There were hard time certainly. But he grew the business to a really, really big size. So that was a very good idea. Although he was very adamant. I think that’s typical for an entrepreneur that people start with ideas that are really good, but sometimes they have a hard time convincing those around them that this is really a good idea.
I joined Onlineprinters four years ago, so now I’m all here for four years. Before that I worked with CB Color. One of the leaders in photo business who also has a share in the same way of online printing that Onlineprinters is doing. There was responsible of the German business of the German production sides. And I also created the first online print offerings that CB Color had. Before that I was two years with Boston Consulting. And before that I started with Bertelsmann in the print business where I had the opportunity to lead the prepress of Mohndruck one of the biggest offset companies in Europe.
I let the first steps into CTP production. There was at that, you see my gray hair. And I also lead the sheet-fed printing department there. So yeah. And before that I studied engineering and spent some time in France, married three kids and yeah. So, it’s like with strategy when you’re moving forward, you’re doing things that seem to be right, but when you look backward it looks like a great strategy. So when you look at me today a CEO of a company that does online print, online printing, a strategy to grow in a strongly growing market and you have spent time in engineering, in printing, offset printing, in strategy consulting and in the online photo business and created an online printing company yourself. It seems to be a good preparation for being CEO of this company.
I think that online print is dealing with part of the print industry that has still way to go in its move online. We think that roughly 10% of the potential commercial printing revenue that could go online is actually online today. So, certainly we have to adapt. We have to improve process. We have to convince people to really go online with their printing needs, but we think that there are huge opportunities for growing in that market. But also not to tell the story that everybody should rush to that market because it’s such a great opportunity. I think by now the big online players have assembled a set of cost advantages, brand value, online marketing, know-how and everything you need for being successful in that business so that there’s a huge opportunity for those that are already big enough to grow with this growing market. But I think it would be really hard for new entrants who would try to get into that market at a much smaller scale than we are today.
In the beginning. You don’t have the scale advantages that we have, we have scale advantages in IT, in marketing and production in paper purchasing and everything. And when you start with 500,000 year old revenue, you don’t have any of that. So you really must be capable of investing and it would take quite a while to, you really have a revenue that in itself is profitable. And in the same time the profitable big players continue to grow and continue to become bigger.
I think there are two drivers. One driver is that certainly we take volumes that historically have been done in these 8,000 small print companies and over time these volumes partly move into online print. So this is one driver and the second driver is certainly that with the low cost that we have, the low prices that we have, we also offer an opportunity to order a print to people who before wouldn’t have thought of it. So today when you go to a … I always say to the annual meeting and the kindergarten. People might make an invitation that has been printed online. Historically, they would have done that in a coffee shop or however or you wouldn’t have had this written invitation had all. So today it’s easier and people can use things that they didn’t before. So I think there we really create growth of the market, not just of our market but in general of the market of printed products. But the stronger driver is to move volumes that are in other printing companies into the cheap and efficient and standardized online printing world.
I know a little bit of these two dimensions have been apparent in the historical development of how online print has been seen by people. The beginning was, “Oh my God, these terrible online predators, they killed our business.” But in the end, I think there was a saying in the beginning of 2000, everything that can be digital will be digital or everything that can go online will go online. So in the end, we are drivers in a rather natural development of online print and online ordering. That’s something that has happening everywhere and it’s also happening in the printing industry. So that was only seen in the first years of online print. Today when I go to a conference and I speak to printers, most of them really see us as partners and most of them really say, yeah, in the beginning we were against you, but now we’ve understood it’s a historical movement.
Certainly you are driving that movement, but it will happen anyway if it’s you or somebody else. It’s a natural development and we have to find ways of using the opportunities that are in that. And I think the small printers, they have a high local relevance. They have many customers they know they do more than just printing for these customers. They may do creation, they may help them in organizing all the things that they need to print. And all that is added value that we cannot supply from afar. But that’s what they do regionally with our customers. And then they from their point of view, they just outsource the production and in that increase their own margin, reduce the necessity to invest in new machinery and so for them, the business model changes, but we can then be a partner to them.
I think in other industries, maybe those, the zalando’s, they don’t sell to the local clothing shop they sell to the customer and say local clothing shops, we don’t need them. Like Oliver Zambia said once, if the Internet had existed all along, there wouldn’t be any shops in the world, which is a little bit crazy I think. But that’s the way they see the business. We think there is added value in the work that a local printers are doing to their customers. But the added value is not in the production because there we are more efficient.
Certainly there are in the end, I think we are in the market that changes with digitalization. Many, many things change and all printers have to redefine their business model. And there are those that redefined it in a way that they say, Okay, with these standard products, I don’t want to do my business anyway. So they move into specialized products, specialized post processing work in a supply chain structures. They do warehousing, they do supply of material, not just printed but everything else for their customer. They integrate into the ERP system of their customers.
So they do many things that take them out of this pure price comparison of the product, which is a good move and this is their way of digitizing their business. And there are others that say maybe that’s not what we want to do. Or maybe that’s something for the companies of 30, 40, 50 employees, but not the solution for those with five employees. They have to search other solutions. And I think those that today say, oh, I still hate them. They are still our enemies. Maybe they are the ones that are not willing to really rethink their own business model.
I think it has been natural from the beginning or it has happened from the beginning. And I think it’s more actively communicating how people are using our service because we have worked for printers all along. There have been printers who understood rather early that printing 2000 fliers is not their forte. So it’s more that we say, okay, look at our customer base, look how many people, companies, printers, also people in the graphic arts use us in which way do they use us, what is the value that we give to them? And then first trying to communicate that. And secondly, trying to get even better in being a service provider to them for that you have to understand it, but in the end you also have to communicate what you’re doing there because hopefully there will be some more who will also like that.
Yeah. Certainly the challenge of growing is always adding, new production capacities to really keep track with the volumes that keep coming in. But also, always understanding where they are the new opportunities from the new size that you have reached. Because with each size you have new challenges in leading the company, which organization you need. And so on, but also new opportunities of things that you can do that you might not have done at half the size, so it develops all the time and certainly the bigger you are, the more new customers you have to create. So the better you have to become in marketing yourself and getting in new customers in online marketing and in everything you do for really attracting new customers to your business model.
I think technology for us is broader than just print technology. It’s technology in the online world and the online marketing world in the way our website works and the way we understand customer behavior, all of that is technology. The automation that comes with that is all technology. So there’s a big software part that is customer facing technology that is very, very important because I think, there is the new efficiency dimension that we have to work on. The efficiency of our production is one part, but the efficiency and ease of use of the customer side, that’s something that needs to be strongly developed.
And then certainly in production, also using new technology is important, but you’ve seen today in the visit, we also use many machines that are high tech machines, but that are not dedicated technology but still technology, everybody could buy and just the way we use them, the way we organize the workflows, the way we have the software around it. That really makes a very big difference, but I think the bigger we grow, the more areas of production will then be open for technology in terms of integrated production lines, full automation and all that stuff so that then we get more and more into dedicated technology that only we and maybe two or three others in the world can really use because nobody else has enough volume to really use that kind of technology. That’s something that I see now coming for the future.