Size is not the necessary criteria of success in business. Profit, agility and a vision for the future better define long-term success. Starleaton Digital Solutions is a family-owned supplier mixing it successfully with the big boys in wide-format consumables and specialised hardware. Ben Eaton spoke with Print21 magazine about what the industry can expect from this rising star.
Size is not the necessary criteria of success in business. Profit, agility and a vision for the future better define long-term success. Starleaton Digital Solutions is a family-owned supplier mixing it successfully with the big boys in wide-format consumables and specialised hardware. Ben Eaton spoke with
The market for inkjet signage materials moves with amazing speed. This year’s sought after specialty product is next year’s throwaway commodity. Today’s high margin substrate tomorrow barely pays for its space in the warehouse. Buying too much or too little stock can be ruinous for any size business, especially suppliers that focus on imported materials. Being lumbered with expensive excess that sits around eating up capital is as bad as not having enough supply when customers need it ‘today.’
Navigating these treacherous waters requires a mixture of level-headedness, experience and importantly; enthusiasm for the game. That’s something Ben Eaton has in spades. As managing director of his family-owned enterprise, Starleaton Digital Solutions, he is deeply versed in every aspect of the company’s operations and the wide-format substrate market. He has a clear recognition of the company’s role in the market, about how he wants it to be regarded.
Bread & butter – plus jam
Carrying over $6 million in stock in its five warehouse locations across Australia and New Zealand (both bread and butter commodity material required daily by the industry and, more importantly, specialty materials), he sees SDS as the supplier customers turn to when they have a challenging job or when they need that specialty product.
This focus defines SDS, setting it apart and positioning it as a unique supplier. It also brings its own set of challenges in terms of stock holding and turnover but last year it delivered not only 21 percent growth in turnover, but also a 31 percent lift in revenue. Eaton sees the result as validating his company’s strategy of not playing in low margin turnover.
”You can’t survive in this business on commodity products alone unless you’ve got massive and really regular turnover where it comes in and goes out quickly, and you’re not sitting on stock. Margins continue to be eroded. Our focus is on having more specialty products,” he said.
‘Not here to talk about standard self adhesive vinyls’
Specialty products are ‘sexy,’ according to the dynamic Eaton. They are high-value items for the supplier but also, importantly, for the printer. It may be a tight rope act as far as stock volumes are concerned but holding specialities is more than a simple point of differentiation. At a time when customer loyalty is constantly being challenged, being able to supply what no one else can, in the time frame the customer needs, is often the start of valued relationships. With 65 percent of deliveries to customers required in three hours or less, SDS offers a logistical solution.
“With a lot of specialty products, people are prepared to pay more because they are achieving more for their customer. You’ll hear us say when we visit printers … look, you’re looking for more margin, and this is a way of getting more margin. We’ve been doing a lot of work with sales teams within printing businesses to get them to understand the ‘sex’ factor about the products,” says Eaton.
“Often I walk in and say, one thing I need to make to clear… I’m not here to talk about self-adhesive vinyl (SAV). You’ve no time to talk about self-adhesive vinyl and neither do I. In saying that, the customers know I’ve got SAVs available but more importantly, I’ve also got a suite of other sexy products that are going to make them more money.”
The SDS value proposition relies on having the right material at the right time, and this means keeping one of the largest ranges of products in the industry. It requires more than simply being prepared to invest; it means juggling capital flows and currency exchange rates; it demands appropriate stock turnover and an agile response to market trends and demands. This is in the company’s DNA, ever since Peter Eaton began the Starleaton business in 1978, importing specialty laminates and adhesives. Since then father and son(s) have built up intergenerational experience in sourcing the most apposite product for the times.
Ship-shape logistics
“We’ve been very lucky. Traditionally we’ve done a lot of business throughout Europe. With the consolidation that went on during the GFC, a lot of manufacturing consolidated into Germany. Now, a huge chunk [of our product range] comes from within a hundred kilometres of Hanover. That means we’ve got regular container shipments departing Europe throughout each month. So, if we get a spike in demand we can get it into the pipeline quickly.”
“The benefit of holding such large amounts of stock is that we can draw down on it without affecting the regular daily business – and that’s what a lot of our competition doesn’t do. We’re placing forward orders three to six months ahead with our suppliers. I am forever reminding my team and the end user; you can slow the ships down, but you cannot speed them up.”
Turnover is vanity, profit sanity
There is a hard-headed realism behind what might seem like a quixotic ideal to have just the right speciality on hand for when a customer calls. SDS is competing in a marketplace where most of the players are big international corporations supplying their own manufactured products, but Ben Eaton has no interest in competing on who has the largest turnover. SDS stands out with its own value proposition and having an abundance of high-value, speciality stock, even if it costs, is an essential part of it.
“I took a call yesterday from a customer who demands high quality and orders big volumes. I said to him… I only hear from you when you need something special. He says; Yes, well you’re the expert; you’re the guy we go to when we can’t find that product. And I love to hear that! We want to be on speed dial number one for the weird, wild and wonderful. Then you have an opportunity to prove yourself and the customer may decide he can get his commodity bits and pieces from us too.”
There is little doubt that Ben Eaton sees SDS as primarily a sales organisation. He tells how he worked his way up from sweeping the factory floor to developing an in-house custom-sizing business and then finally being turned loose in sales. It was a revelation to him. He found he loved it and still does.
The old man’s wisdom
“When I first started with my old man I worked in the warehouse for three and a half years, mainly converting jumbo rolls and handling dispatch. This was where my love for the product came from, having spent so much time touching and feeling all the variations the business sold. I was later used to go out helping to set up warehouses around the country, which I quite enjoyed. To this day the respect I get from the staff all the way down the chain comes from when I was out there sweeping the floors.”
“The company then had a sales guy in Sydney who decided to move on and do other things, so I was told, here’s your opportunity son, here’s a box of business cards, get out there and see if you can sell. And I absolutely found my groove. I found selling is my thing. To say, I love sales is an understatement.
“At PacPrint 2005 I was appointed as general manger for the business. For the following five years I went around the country eyeballing people and asking one simple question: Why aren’t you buying from us? You should be buying from us. What can we do to get your business? It was a simple formula but one that has been passed on to me by my old man. The business has just grown from there.”
“If you don’t have it, you can’t sell it,” – founder Peter Eaton’s inventory motto.
The figures back him up; in 2005 SDS had a turnover of approximately $4.5 million. Now its sales are north of $15 million and growing.
National footprint
During that time he was on the road, Starleaton Digital Solutions (SDS) took over from the original Starleaton, buying up the distribution it traditionally had around the country. SDS has a national footprint with a warehouse and office in every mainland state as well as one in New Zealand. With Peter Eaton as chairman and financial director and brother Josh coming on board in 2012 as operations director, there is now considerable management depth in the company. This family focus resonates with customers, many of whom are family-oriented themselves.
Although firmly committed to the path of growth, Eaton is cagey about trying to grow too quickly. He still carries the scars from an abortive attempt to expand in 2011 when he believed the GFC crisis was over.
“It was the biggest lesson I ever learnt in business. When we felt the economy was bouncing back, I went on a massive recruitment drive and put together what I believe was a team of international and local stars. And it was an epic failure.
“Trying to recruit too many too fast without having anyone who could tie those people together, I discovered you can’t be the general manager, operations manager and sales manager at the same time. That put us back a few years.”
Now the company’s expansion is more measured and organic, even as SDS keeps an eye out for suitable takeover projects. In 2013 it acquired Adkote, bringing owner, Ian Cleary, on deck. Shared interests in environ-
mental products and solutions for the signage industry saw an easy and thorough integration. It also brought the Memjet-powered RTI Vortex and Xanté inkjet engines into the SDS stable, expanding hardware supply, which at the time had centred mainly on Seal laminators alongside Roland and HP printers.
More savvy acquisitions
Since then, Eaton has made further acquisitions, allowing him to bring into the SDS portfolio the Zünd digital cutter agency with former director of Intergraphic Technologies, Peter Wood, moving over to join SDS in Melbourne after the acquisition. It’s all part of a clear plan to expand hardware sales and technical support to make up a greater percentage of the overall business.
SDS is gaining traction at an impressive rate. With a firm and clear road map planned, the ambition is to further the results posted in 2014/15 over the next five years. There is a sense that Ben Eaton is feeling more comfortable in the managing director’s role, and that SDS is firming up its own valued place in the industry. He believes what it offers is unique and although, with brother Josh, he is constantly working at refining and speeding up the stock availability and services to the end user, he has no plans to diminish the range or the scope available to the market. In fact his plans suggest quite the opposite.
In the Starleaton universe, investing in stock may be a form of customer service but it’s more than that. Eaton is quick to attribute the philosophy underpinning the business to his father. “I’ve heard my old man say it in hundreds of different ways over the years to all of our suppliers; If you carry one month’s extra stock and you turn it over once a year, it’ll have paid for itself, but if you don’t have it, you can’t sell it.”