Few people appreciate the distance between Australia and Vistaprint’s home on the east coast of the US quite as well as Mike Ewing. For months, Ewing was taking part in what he calls “the world’s longest commute” – working in Australia but continuing to live in Boston, Massachusetts.

Those days are now behind him as Ewing, much like the company he works for, has now properly settled in Australia. In September, Vistaprint officially opened a production hub in the Melbourne suburb of Deer Park, which it set up in tandem with a marketing office in Sydney.

The expansion is something of an endorsement for the opportunities in our local printing industry, with the Deer Park facility becoming one of only three Vistaprint manufacturing hubs worldwide, joining sites in Canada and the Netherlands. But the arrival of Vistaprint has many in the local industry concerned, not least because of the company’s cut-price business model.

Ewing, however, isn’t fazed by criticism that companies like Vistaprint are making it tougher for others in the industry to turn a profit. “This may sound a little egotistical and American, but I’m not particularly worried about the profits of the entire market. I’m worried about the profits of my company,” he says.

“We are able to generate a very healthy profit while delivering low prices to our customers,” he adds.
Ewing, though, doesn’t see Vistaprint as another competitor in an already overcrowded market. Rather, he says the company is targeted at what they call “microbusinesses”, companies of fewer than 10 people who might spend no more than $200 a year on print, if they decide to use printed communications at all.

Indeed, the company was founded on the principle of giving very small businesses and the self-employed access to cheap graphic design and print production services.

“Zero to 10 employees is our sweet spot,” explains Ewing.

“The example I like to give is a dog walker or a painter, someone who is independent and works by themselves. ‘I paint walls, I don’t know anything about graphic design. And it’s really expensive if I go get something professionally designed’.”

Ewing says the make-up of the typical Vistaprint customer means the company isn’t in direct competition with traditional printers. “Those people don’t have a lot of buying power.

“The painter, the person working on their own, they will probably only spend about $200-$300 a year on print. They’re not attractive customers for commercial printers,” he adds.

International aid
Rather, Ewing argues that Vistaprint is actually “expanding the pie” by luring ‘microbusinesses’ to printed marketing, whereas they might otherwise have opted for internet-based advertising.

“People ask me about rivals, but I view this as a fairly open opportunity for everyone. I don’t see this as coming in to steal share from folks as much as it is expanding the marketplace. If we get some small accountant to buy brochures for the first time, that is a print purchase that may not have happened otherwise.”

Having already set up a localised ‘.au’ version of its website in 2007, Ewing is confident the company can continue to build a presence in the local market.

“The great thing about the way we’ve put our toe in the water over the past couple of years is that it has given us as idea of how the market will respond to our offering and business model,” he says.

“That’s allowed us to demonstrate to ourselves that Australia will embrace what we’ve got to offer. They have over the last couple of years and will continue to do that,” adds Ewing.

The typical customer is small, but there’s power – and profit – in numbers. Ewing estimates that the local ‘microbusiness’ market is “worth well over one billion dollars a year”.

“There are lots of microbusinesses here. We believe there is a very, very large number of businesses with under 10 employees that will allow us to continue to grow at the pace we’ve become accustomed to,” he says.

Land down under
It is the proximity to this $1bn market that was behind the company’s decision to set up a manufacturing operation in Australia, despite the potential for lower manufacturing costs in other
Asia-Pacific countries.

Ewing describes Australia’s higher labour costs as “a premium we’re willing to pay to be close to our customers”. Previously Australian customers were having their print sourced from Vistaprint’s manufacturing hub in the Netherlands, meaning that the best turnaround time they could manage was nine days.

With the Deer Park plant now open, that number has been reduced to three days, making speed-to-market one of Vistaprint’s key selling points. The company’s “huge logistics costs” are also expected to tumble.

So too, Ewing adds that due to Vistaprint’s high level of automation in its operations, its labour costs aren’t as high as other companies. He observes that “the customer does all their own work” through the online ordering process. When they click ‘buy’, the job is then processed through a computer system which, along with all the other orders that have been placed at that time, places it in a gang appropriate to its job type, as well as a place in the queue appropriate to its expected delivery time.

Ewing says the first time the job is touched by human hands is when it is rolling off the press, after which time it is subjected to a minimal amount of manual packing and shipping.

“We actually work very hard to get as much automation and integration in our systems as possible. All in all, the amount of human labour time that goes into that order is less than one minute.”

Ewing says he has watched other printers make tentative steps into web-to-print by putting order forms on their websites. Ewing likens the Vistaprint website more to a supermarket environment, where customers might make impulse purchases at the check-out area.

“We’re extending it well beyond just the order form and turning it into a shopping environment,” he says.

Get ready
Whether the Australian market is ready for this kind of shopping, particularly in the print space, is another matter. This is a country that doesn’t even have its own version of Amazon; consumers are forced to order from the online shopping giant through its US or UK versions.

Ewing, however, isn’t fazed that Vistaprint appears to be one of the first online shopping giants to make the long trek to Australia, nor does he think that the Australian market isn’t yet sophisticated enough to take to the medium. “You can’t find a ‘.com.au’ version of Amazon, but I still believe a lot of people order from Amazon and they still ship product here. I’ve heard some people say Australians aren’t interested in buying the way we sell, completely online, but I know that Australians are willing to buy the way we sell.”

“And I don’t think Australians should sell themselves so short. There are some very shrewd consumers and buyers here who are looking for good value, but are also willing to pay more for good service,” he adds.

Not for everyone
Ewing is also prepared to accept that Vistaprint’s model won’t win over the entire market. “I’m the first to recognise that the way we sell is not for everybody. There are folks who buy a lot of print who would rather work with someone face-to-face, or who would rather see a proof in person. We don’t have plans to build those services into our operation.”

But Ewing says the company often still reaches these customers through its competitive pricing. As he points out, with a 250-pack of business cards retailing for as little as $28, “the risk of trial is very low”.

“We get a lot of folks willing to try us out because they think ‘what’s the worst that could happen’, and that’s the environment in which we wow customers,” he says.

With all his talk of “wowing folks”, not to mention the cut-price model, has the online giant’s ‘American-ness’ hit any cultural resistance from Australians?

Ewing says the company hasn’t come up against any nationalistic protectionism as a ‘foreign invader’.

“There certainly hasn’t been any backlash. When we talk to customers, we haven’t heard people say, ‘oh, but you’re an American company’. But we want to come here and be a good citizen, and employ locally and create opportunities. And I think Australians in general are pleased to see good value.”

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