You're doing 80K labels a month now, but where is your market for those labels going? Is it expanding? How can you grow it? What can you do to add more value for those customers that could generate a bigger share of their wallets? Are there bigger labels they need? Are there other prospects/suspects you can go after and gain their label business? What's the big picture--6 months out, a year, 3 years? Which of your customers will need more? And are there customers you aren't reaching who you could reach if you were to expand your capabilities?
There are no compelling reasons to subcontract this work unless you see the volume you are doing now as the best you can do. (unless, of course you can't afford to invest in some technology)
The small format presses mentioned here are good ways to enter the labels market and grow from where you are, and without reliance on outsourcing. The Memjet machines from Afinia and Colordyne are good bets, and if you prefer toner there are options from Allen Datagraph, which also has some inkjet options. With any of these machines you can keep the investment down and work at expanding your capabilities for short label runs. There is a LOT of potential in the label segment.
The pricing from 4 Over and others is very attractive, but in my opinion outsourcing is too narrow a way to look at the potential opportunity for digitally printed labels. At $60 per 1000 for 80K labels a month that's $4,800 a month, plus your time in handling the job in terms of prepress, etc. I don't know, but my guess is that price may be for a basic substrate, glue applied. How much is it for a film or polyester pressure sensitive? Be sure to check all the variables on outsourced costs.
For comparison, a small table top machine can be had for $25-35K. And you could offer very fast turnaround, which means a lot to some customers. Bigger machines $50-70K, but are faster, can do more and have higher monthly maximum volumes. Those might be a couple years out for you, if you work to grow your business. Then there's a big leap to the high end machines--bring money!
The small machines do a very good job and can handle the volume you describe. What I would recommend is going with the Memjet technology and doing all you can to grow business and max those machines out in terms of monthly print volume. That way you have a real sense of your potential market size. You can then add additional small machines or upgrade to a more substantial device.
Noel Ward | Managing Director | Brimstone Hill Associates
