A classic add-on sale opportunity
We are all familiar with the phrase, “Do you want fries with that?” This is a familiar line heard when placing a fast food order. This same principle can be applied to labels in the material handling industry.
In this case, you want to substitute the phrase, “Do you want labels with that?” All the salespeople out there selling pallet rack, flow rack and complete warehouse systems need to ask this question. Pallet rack, flow rack and warehouse projects are always going to involve some sort of labeling device and label holders. Your customer is going to buy these products from somebody—why not you? It is truly as easy as asking, “Can we provide the rack identification labels and label holders for the project?” This is an easy add-on sale that takes minimal work and knowledge. You provide a value-added resource while increasing your project revenue and income.
Here is a listing of the various add-on products your customers may need for their projects.
Pallet Rack Identification Nameplates/Labels
These are generally referred to as location labels or stickers. These labels give each pallet location an address or identification. They can be a numeric sequence or an alpha-numeric sequence. They can also have a bar code printed on them which has the numeric or alpha-numeric sequence in the code. Some of these labels might have arrows on them to indicate above or below the beam. These labels are usually white with black text. Some companies may want a yellow background with black text. Some may go one step further and want to color code each beam level with a particular color.
Aesthetics are playing a bigger role in the labeling of the warehouse. Your customers want the warehouse to be visually enticing because it will be a showcase for their customers and potential customers. The good news is the more aesthetic value, the larger the sale. These labels will, for the most part, have a permanent adhesive. Once you have asked your customer if you can provide the pallet rack identification labels and he says yes, you need to ask him to e-mail you the Excel spread sheet containing the sequences. The Excel file will have all the sequential information your printer partner will need to complete the job. You should also ask for the size of the label and a draft of the label layout.
Flow Rack Identification Nameplates
These are very similar to the pallet rack location labels, except they will be smaller in size so that they can fit into the smaller areas of the flow racks. The flow racks chiefly get labeled on the front of the rack and the back, so you will need two for each location. Unlike the pallet rack labels, the flow rack labels are likely not going to be permanent. The items in a flow rack are dynamic and constantly changing. Because of this, your customer may want to print these themselves and may ask you to provide them with a blank label that they can print themselves. In this case, you will not need to ask for the Excel spread sheet. Instead, ask for the size of the label, the type of printer being used and how many labels will be needed each month. This is the pertinent information you will need to share with your printer partner. Because the flow rack labels are constantly changing, specify a removable label adhesive or ask for a label holder.
Some customers may not want to permanently label their pallet and flow racks. This opens up another potential product—label holders. One label holding option is the vinyl pocket or pouch. These pockets are made of clear vinyl and should have a thickness of eight gauge. You do not want the flimsy packing slip pockets that will rip or tear. The pockets will either have an adhesive or a magnet to stick to the shelf.
Some customers may opt to take the labels you have sold them and adhere them to a magnet and then place the magnet on the rack. The magnets should have a 1/32-inch thickness in order to have a strong connection to the shelf and ensure the labels do not fall.
Another label holding device is a placard, which adheres to the rack surfaces and will hold an adhesive label but the special surface enables the label to peel off without leaving any messy adhesive or label residue.
You now have sold the labels and the label holders to your customer. The next step is to ask who will install the labels and label holders. The installation/application service of the labels/label holders is once again an easy add-on sale. Your customer, generally, does not want to be bothered with the installation of the labels. Therefore, it is a surefire way to provide a value-added service that delivers incremental revenue to your bottom line.
Speaking of your bottom line, how much incremental revenue can you expect from these projects? Labels, label holders, installation and application projects can range from $10,000 on smaller projects up to $200,000+ on larger projects. Margins on these projects can range from 20 percent to 50 percent. Margins are typically better for the application/installation service than for the labels themselves.
These are really great figures considering all you have to do is ask, “Do you want labels with your racks?”
For all this to take place, you will need to align yourself with a reputable printer partner. You may have some ties with a local printer depending on where you are located. But, proximity to your location is not a prerequisite. You need to make sure they have years of experience in providing sequential and random alpha-numeric labels. Your printer partner is also a good source for your label holders.
So don’t forget the next time you are quoting a rack job to ask to provide the labels, label holders and the installation services of these products and increase your revenues.
|Meet the Author
Kevin Marrie is distribution channel sales manager at The Kennedy Group, located in Willoughby, Ohio, and on the Web at www.kennedygrp.com.