There are more then 200 custom label producers in the Chicago Illinois area that claim to provide labels of some kind. So, what are some of these Chicago, Illinois custom label companies? Well, as we looked at the market we uncovered all types of custom label suppliers. Below, we have broken them into groups that can be understood.
If we look at a supply chain that goes from a paper mill all the way to the customer with a finished label, the longest route to get to the customer is as follows:
Paper Mill –> Adhesive Coater –> Label Converter –> Broker, Barcode VAR, Distributor, or another converter –> Reseller –> Customer
This is a demonstration of how some labels get to market. Why could there be up to 6 steps to get labels to the customer? Well, it is the nature of custom labels. Not all label converters have all the equipment to make every custom label. The Chicago Illinois area has many boutique label converters where one may have the equipment to run embossed labels very well and cost effectively. Another may make blank thermal transfer barcode labels very efficiently. These are two very different production methods. So if a customer goes to the embossed label converter and asks for blank barcode labels, the embossed converter may act as a broker on the blanks.
Now, that is not bad news for the customer. The customer has a one-stop shop for their labels and the embossed converter has intelligence that allows them to supply the blank barcode labels at a great price as a broker. The knowledge of knowing which converter is making which label becomes the value that is provided to the customer.
Now, there are also resellers that do not make any labels, but they just distribute and resell product. They may be set up with warehouses all over the country to provide local availability of product. They usually do not just sell labels, but they sell many products that could be signs, barcode equipment, safety products, and more. These resellers do not have a significant amount of expertise to add value to the customer but the value comes in local availability for the customer.
A reseller may rely on a broker that brokers only labels for that expertise. A broker may have more intelligence and expertise than some manufacturers because if you remember from above, the manufacturer can only really be good at one or few types of labels. A broker can span all label types and have relationships with many label manufacturers across the board forwarding that knowledge to the reseller or customer.
Now, some purchasing managers within large companies feel that with a C.P.M. Certification, they need to cut out the middle-man and get right to the manufacturer, this can be done, but it will definitely add costs in other areas. What other areas? Well, as you know now, most manufacturers are only good at making certain types of labels, so if you are trying to get to the core manufacturer, you may end up having 10-15 new manufacturers to manage, cut P.O.’s to, send proofs to, manage payables to, negotiate with, and manage quality issues with. The hidden costs of this can be really big.
Think of all the types of labels in a large company. They use laser labels, Avery type labels, blank shipping labels, color mailing labels, file labels, UL labels, 4 color product food labels, embossed cosmetic labels, promotional labels, static cling labels, asset tracking labels, inventory management, and barcode labels. Imagine setting up a different supplier for all of these.
There is an interesting concept that has happened in Chicago Illinois and other parts of the country. Some of the label converters will only work through brokers or resellers. For the converter, this keeps them with fewer, but larger customers to maintain and work with. The benefit here is that most converters are not really customer focused. They are manufacturing focused in order to make product fast and with high quality. They leave the customer service and maintenance up to the broker or reseller.
Custom labels in Chicago Illinois is a complex business and trying to discover which manufacturer does which label at the lowest price with the highest and most consistent quality is the key for any broker or reseller. This takes years of experience, which makes the industry a tough one to enter from scratch. Once the knowledge is there, the next step is to find more manufacturers outside the Chicago Illinois area because most customers have multiple locations. Probably the best position to be in is having a niche label converter that also acts as a broker or reseller on other labels they do not make. That may be the sweet spot in this industry.