Reprographers: how much can you provide for free and still maintain a profitable business?

Let me restate the above, this time a bit longer (as is my style and inclination):

How many services can a reprographics company provide “for free” and how much (and what level of) technology (and “tools”) can a reprographics company provide “for free” ….. and still maintain a profitable business?

In my opinion, that’s a question that has been plaguing Reprographers ever since the transition to “digital” began.

This morning, I spent some time researching Pantera Tool’s web-site. Before I make further comments about Pantera Tools, I’d like to take a few minutes to provide my readers some “background information”.

In 1993, DeWayne Adamson co-founded Plan Express, a national printing and distribution company. Most Reprographers (if not all) were familiar with Plan Express. Plan Express’ first location was located near the main Fedex hub in Memphis, TN. Later on, Plan Express opened additional locations – print centers – in other parts of the U.S.

In 1999, Dewayne became the sole owner of Plan Express and went on a mission to make PEI the first Online Planroom with Print functionality. This technology was launched successfully and PEI grew to one of the largest print and logistics companies in the world, introducing many new technology products along the way.

DeWayne left PEI in 2009 as his plans for continuing to build a digital workflow environment for the construction community were not shared by others in the organization. His departure was done to enable PEI to stay in, and focus on the print business and for DeWayne to fulfill his ideas.

Blog Publisher’s comment. Actually, my comment is a question: If, by 2009, DeWayne was the sole owner of Plan Express and was not happy with the direction Plan Express had taken, then, instead of departing Plan Express, why did not DeWayne simply change Plan Express’ direction? Did Plan Express’ venture capital / private equity investors (or lenders) have something to do with that, with his decision to leave Plan Express?

At some point (and I don’t recall exactly when), Plan Express sold some of its assets to iSqFt. I don’t know the specifics of the deal that happened between iSqFt and Plan Express, but I do recall seeing a press release about the deal. But, to go on, Plan Express, apparently, is still in business and is operating under the direction of Tom DeGreve, Vice President of Operations. Plan Express’ location is still in Memphis, TN.

Whatever the case, DeWayne Adamson went on to found another company, this one called PANTERA TOOLS, and it’s that company – its apparent business model – that’s the subject of today’s blog-post.

Based on what I read on Pantera Tool’s web-site, it “sounds like” Pantera Tool’s initial objective was to provide a lot of (virtually all of its) services for free (the use of the technology/software it developed, document management services, etc.) and only charge for “plans and specs” printed on paper.

My own personal conclusion about that is that, if a company only generates revenues from printing plans and specs, it’s a reprographics company.

Pantera Tool’s pricing – for hard-copy printing services - according to its web-site:

Blueprint Pricing:

ü 85 cents per Large Construction sheet

ü 8 centers per Specification Sheet

ü Free ground shipping on Online Blueprint orders

ü No plot fees on Large Construction Documents

I guess it does not matter what size prints are ordered, sounds like the same 85 cents per-sheet price applies to all large-format prints, 24 x 36, 30 x 42, 36 x 48, etc. If that’s true, then Pantera Tool’s pricing, on a per-square-foot basis, works out to a range of $.14 to $.07 per sq ft. (As a former Reprographer, I could probably live with that, provided that I got a ton of volume and provided that my only cost of doing business was limited to equipment, paper, toner and someone to operate the printer.)

Pantera Tool’s web-site is really excellent looking. Well laid out and lots of information.

In the “FAQ” section, here’s the first question and the first answer:

Q1. What is Pantera Tools?

Answer: We have created the most advanced bidding and collaborative project management tool in the industry. PanteraTools gives you the ability to upload files to your FTP/Planroom, invite users to share files for bid, or project management, and add vendors to your private address book as well as broadcast for bids and receive bids from our Contractors and Subs in the Pantera Sub-Mall all at no cost. We also offer Print-On-Demand for digital files received from any source, which provides the user with Printed files delivered to the doorstep for less than the cost of paper and toner, Document Management and quality assurance, as well as free tools from our Partners.

Here’s some more information about Pantera Tools (Blog-publisher’s comments continue later on):

About Pantera

Pantera Global Technology is an Arizona corporation operating as Pantera LLC for the Pantera Tools product. Our offices are located in Arizona, Tennessee and Illinois. The sophistication of the technology behind Pantera Tools is unmatched in the Construction Industry. Our purpose is to create the largest community of users in all of Construction with access through one integrated Portal. We accomplish this by providing software that is not only superior to all others, but available at no cost. Our software provides complete File Sharing, Document Management, Contact Management, Messaging, Reporting, Collaboration, Construction Project Leads and Contractor Directory Functionality that all work together seamlessly as one product. Print and Delivery functionality is built-in and serviced by our network of Print Partners. We are not a “Cloud Based” system. We are a Web based Software provider and we use Top Tier Vaulted redundant Dedicated Servers to protect the security and safety of your data and to insure maximum up-time capability. We proudly challenge any paid service provider to match any of our product functions. Build the Community!

Our Team

The executive team has over 75 years of high level experience in our core product offering. Our team understands the Construction Industry as well if not better than any technology company in the sector. The tools we provide today will be available by our competitors next year. We are building software today that will keep Pantera always a step ahead. Not only do we take pride in the best and newest technology, we deliver it for free in order to fulfill our mission to build the largest construction community in the world. Pantera is trusted by many National Brand Retailers and 100's of prominent General Contractors. We are talented, hard working, well funded and profitable. You can be assured that using Pantera Tools will provide you with the best product at the lowest price.

Executive Team

DeWayne Adamson/Founder and President

DeWayne’s unique background encompasses numerous aspects of the Construction and Technology sectors.

His expertise in Construction began as a skilled tradesman. At an early age he was quickly promoted through the ranks to become a Project Manager/Estimator by the age of 26 and a Vice President of a prominent Mechanical Contractor by 27. Gaining knowledge from one of Chicago’s largest Mechanical Contractors, Dewayne ran numerous Major construction projects in the downtown area. In 1986 State Construction offered Dewayne an opportunity as a Sr. Project Manager in the General Construction arena. Specializing in Retail Construction, Dewayne ran over 700 projects. In 1992 Dewayne founded the first National Permit Expediting firm, a National Maintenance Company, and Co-founded one of the Largest Retail Construction firms in the country. All of these companies were successfully sold. In 1993 he also co-founded Plan Express, a national printing and distribution company. In 1999 Dewayne became the sole owner of Plan Express and went on a mission to make PEI the first Online Planroom with Print functionality. This technology was launched successfully and PEI grew to one of the largest print and logistics companies in the world, introducing many new technology products along the way.

DeWayne left PEI in 2009 as his plans for continuing to build a digital workflow environment for the construction community were not shared by others in the organization. His departure was done to enable PEI to stay in, and focus on the print business and for DeWayne to fulfill his ideas.

Pantera Global Technology was launched with the vision of providing new mechanisms for file sharing and contact management, and wrapping it into a community setting using the very latest technology. Pantera Tools was written by some of the best programmers in the world.

DeWayne is well on his way to yet another success story as Pantera has gone to profitability in half the time anticipated and is growing in revenue by over 20% every month. The community is building rapidly as demonstrated by web statistics that have surpassed every competitor in the industry.

Blog-publisher’s comments, continued:

After I explored most of Pantera Tool’s web-site, I came across a fairly recent post that DeWayne put up on the blog page of Pantera’s web-site:

The following was “written by: DeWayne Adamson 
2/7/2012 7:18 PM”

The best intentions don’t always work perfectly

Well we had good intentions but had a bit of a misfire. As most readers know, Panteratools offers free Invitation to Bid software and a free File Sharing Planroom along with Address Book and Reporting features. These are all private areas to the GC and his contacts.

We also offer GC’s the ability to publish jobs to a Public area known as the Sub-Mall. These projects are matched up with our registered vendors and sub-contractors and Invitations and links back to documents are sent to those matches. As most of our services are free there is very little opportunity to collect enough revenue to pay for the employees who handle the indexing, posting and hosting of the individual files. We have done well by providing a Print-on-Demand service for subs who want to save money on construction plans but many have moved to digital media.

Despite our ability to print for cheaper than a sub can print on his own plotter, not enough people take advantage of that service to offset the cost of the growing number of projects posted daily to the Sub- Mall. We did not want to charge subs to list in our Directory or to build a Profile Page about their company as that could defeat the intent of building a large community.

We decided that the best way to capture some revenue was to charge for the Construction Content like everybody else does. (Not counting those who charge to advertise). Secondary to that we wanted to make it cheaper than any other service plus we knew that there was value that would be created simply because not every member would pay thereby limiting the number of subs competing for the project.

We picked a price that we thought was fair and would get great participation. The result of the Pay per Project feature is mixed at best. While we have gotten very good response with many subs paying for the download, we also received many calls and emails from subs that were not as happy. Most of the passionate emails pointed out that high use of the product would result in large spending per month.

We do not want to alienate any members of our community so after much discussion amongst the team and our customer base, we changed the individual download price to 3.99 for those who don’t receive many invites and added an unlimited projects and downloads price of 19.99 per month. In the near future we will offer a discount for an additional 3 months free per year if paid in advance. (Give us a couple of days to write the software, either way, it will be ready by the end of the free month trial period.) For those who want to take advantage of a free Project or a free month, simply add the credit card billing info and you are good to go.

Sometimes companies fail to realize just how much customers value a service until it changes. That was us, and we thank all the members who helped to put the new pricing in place. Over the next year you will also notice many new projects being posted as we continue to add new General Contractors daily posting projects to the Sub-Mall.

Blog-publisher’s comments, continued:

So, in spite of the fact that “Pantera has gone to profitability in half the time anticipated and is growing in revenue by over 20% every month”, Pantera was not generating enough revenue, and, in an effort to increase revenue, Pantera has begun to charge for downloads of digital files!

Our best wishes for luck and success to DeWayne and his team. Hopefully, Pantera’s revenue from printing – when subs actually do order hard-copy – and revenue from digital-file downloads will allow Pantera to continue to provide the rest of its services and technology for free.

But, certainly, this change in Pantera’s revenue-generation model brings to mind the question I posed at the beginning to today’s blog post: “How many services can a reprographics company provide “for free” and how much (and what level of) technology (and “tools”) can a reprographics company provide “for free” ….. and still maintain a profitable business?”