COMMERCIAL PRINT

Selling Envelopes

Mark CupachDirector, National Sales

BASICS OF PRINTING

1Todays session focuses on the Envelope Market. Literally, Billions of envelopes are printed and used by Americans each year.

Envelopes are everywhere and pretty much every business needs them to operate. Envelopes to mail invoices, to send payments, to hold products, to hold records, almost every conceivable use.

Envelope MarketOVERVIEW900 US PatentsLions share of $3 Billion Stationery2005 Distributor Market = $385 MillionPositive FactorsLeverage superior sales skills and customer access, PLUS, e-commerceDelivery of On Line Identity programs providing consistent product image and ease of use.

2There are over 900 patents in the envelope market. Envelopes to hold jewelry, the little cards that say I love you with the flower you bought your sweetheart last Valentines day, your medical records, the mastercard payment, the $10 tip you gave your paper boy in the currency envelope, all the junk mail you got in your mail box todaythey are everywhere.

Imprinted Envelopes represent the lions share of the over $3 Billion stationery market.

The distributor share alone is $385 million. Most of it in short to medium run jobs from 2500 to 25,000.

Some of the positive factors surrounding the envelope market include the fact that distributors are INCREASING their share of the market by delivering on line ordering programs to end users, providing consistent image management and ease of use.

Ease of use, plus, the distributors great selling skills and customer service have provided a positive sales environment for this product.ENVELOPE CHARACTERISTICSMeasured in Bond Weight Stocks20# 24# 28#

Major Use Envelopes Identified numerically6 #9 #10Regular and Security TintA-2 thru A-10

Blank vs Imprinted

3There are several characteristics you need to be familiar with when talking envelopes.

Most all envelope products are measured in BOND weight stocks. 20#, 24# and 28# are the most common. 20 and 24# in the commercial #10 and #9 sizes and 28# in the larger envelope products.

Major use envelopes are usually referred to numerically. Both commercial and the announcement/invitation types.

Here, we will discuss the IMPRINTED envelope markets. Blank envelopes are part of the whole commoditized product markets where there is no real added value, thus, no real potential for Margin gain.End users can go to brick and mortar establishments like OfficeMax and Staples to buy blank envelope stocks that are usually offered as a loss leader to get buyers into the store.ENVELOPE CHARACTERISTICSStock vs Custom Stock for Stationery ProductsPremium Smooth White / 25% cotton / Watermarked / #10 RegularLinen and Laid / 24 # / 25% cotton / WatermarkStrathmore Writing / Wove or Laid / WatermarkStrathmore Fiber

4At BSI, we carry a significant number of STOCK envelopes and letterhead stocks.We refer to them as our house stocks because the quantity we purchase qualifies us for better pricing and in turn, better pricing to distributors.BSI carries a Premium smooth white stock, a 25% cotton, or RAG stock, a stock watermarked paper like Capitol bond and those papers are also translated into the matching #10 envelope.Many customers like the Linen and Laid Finish effect on paper so BSI carries a stock paper in regular, 24% cotton and a watermark.Strathmore is a popular letterhead stock in a Wove, Laid or watermark finish as well and again..with a matching envelope stock.Strathmore stocks with a Fiber color are also available.

ENVELOPE CHARACTERISTICSStock vs Custom Stock Finish for Stationery ProductsLinenWhite/Ivory/Gray/Blue/Natural/MauveLaid White/Ivory/Gray/NaturalFiber White/Gray/Cream/RoseStrathmore Ultimate White Wove or Laid Natural White Wove or LaidCustom PapersAll Writing PapersCustom Watermark

5If a customer is particular to a certain type of finish on a paper, BSI offers several options as Stock papers.Linen finishes come in several colors including white, ivory, gray, blue, natural and mauveIn a laid finish, colors like white, ivory, gray and natural are available on our shelves.For a fiber look, white, gray, cream and rose are standards,And some additional strathmore brand stocks include an ultimate white color stock in a wove or laid finish as well as the Natural white color.

For more custom jobs as dictated by your customers, there is a limitless number of different brands, colors and finish combinations that can suit most any customers demands. Even custom watermarked stocks that can be manufactured at the paper mills. Of course, once you leave the realm of standard stock papers and quote on custom writing stocks, the costs will increase substantially as well as the expected production times to complete the order.

ENVELOPE CHARACTERISTICSFormed Envelopes vs Print Flat and ConvertFormed Envelope StockCommodity itemPrint Flat and ConvertFour color processColor CriticalBleeds and wrap around imagesExtremely long run

6There are instances when you cannot print an envelope after it has been converted from a flat sheet. This is referred to as Printing flat and converting.When printing envelopes that require full color, or four color process printing, the registration needed to insure a quality print job requires that the images be printed while the sheet is flat. This gives ultimate control over the printing process.When colors are critical or require a high degree of registration between colors, especially when two or three colors touch, then again, we need to print as flat sheets then convert to envelope shape.

If an envelope has ink that bleeds, or, runs off the edge of a formed envelope, then we need to print flat.Finally, the speed of a web fed press is optimal in very long run envelope jobs.Print Flat and Convert

7Here we see an envelope that has been printed flat. You can see the diecut outline of the envelope.After printing and when the envelope has been diecut out of the square flat sheet of paper, then it is run thru an envelope converting machine that will fold the flaps, glue the edges together and apply the gum on the flap.If we were printing window envelopes, the converting machine would glue a piece of glassine or poly type material to the inside of the envelope prior to gluing the folded edges and gumming the flap you would seal.Envelope Terminology

8Here you can see some of the standard terms used in describing the various parts of an envelope.

Although it is not necessary to memorize this list of terms, it is important to understand that manufacturers will need to know the ink positions on an envelope in order to quote it properly.A vast majority of envelopes are printed with what is commonly referred to as corner copyThats where the return address is printed.Window Measurements

9On all window envelopes, it is critical to make sure you communicate the right measurements when ordering.The placement of the window is extremely important because the inside documents to be sent are usually formatted in such a way that when folded for insertion, the name and address need to be viewable.There are TWO standard measurements for describing the size and location of windows.The first measurement is the size of the opening itself. It is measured in height and width. Here, you can see that the window size is 1 and 1/8 up and down and the window opening is 4.5 inches wide.Now that we know the size of the opening for the window, we need to define WHERE on the envelope the window is.The first measurement your envelope manufacturer needs to know is how far in from the LEFT edge of the envelope the LEFT edge of the window opening is. Here, the left edge of the window opening is located 7/8 from the left edge of the formed envelope.Secondly, your envelope manufacturer needs to know how far the bottom edge of the window opening is from the bottom edge of the envelope. Here, the bottom edge of the window opening is up from the bottom edge of the envelope. No matter HOW MANY windows on an envelope there are, you need to spec out these two sets of measurements for each opening.Envelope TypesBANGTAIL: An open side style with side seams and two flaps - Commonly used by financial institutions for bank-by-mail.

BARONIAL: A style close to square in shape with diagonal seams and a large pointed seal flap. Common uses are greeting cards & social stationary.

BOOKLET: A large open side style with side seams and the seal flap on the long side. Usually used for mailing booklets and multiple unfolded documents.

BUSINESS REPLY & RETURN: A business reply includes a pre-printed First Class Permit indicia, while the return envelope requires the sender to affix postage. Both envelopes may be any style or size. Most common sizes are #6, 6, 9 and remittance.

CATALOG: A large open end style with a center seam and the seal flap on the short side. Normally used for mailing catalogs and multiple unfolded documents.

10There are some very common envelope types you will have the opportunity to sell. Bangtail envelopes, used mainly by the financial markets, have an extended flap that is perforated for removal. Many times, these are numbered both on the detachable flap and on the body of the envelope.Baronial style envelopes are used with announcements and invitations. They can be made with diagonal seams or with the more formal square flap seams on the back

Booklet envelopes are the bigger envelopes that companies use to mail either directories, magazines, or unfolded literature. They usually are made with a heavier 28# bond white stock,.or sometimes in a kraft paper.Business Reply Envelopes, or BREs, and Return envelopes are used by the billions. Everytime you look for some type of response to a mailing whether its a check, a subscription order, a completed survey, whatever, a BRE is needed. On BREs the return postage is not charged to the customer unless it is mailed. A simple Return envelope can be included in a mailing, with the preprinted address on it, but the sender would be required to pay the return postage.Finally a catalog is much like a booklet envelope, bigger, made of the heavier 28# paper or Kraft stock and is used forcatalogs.Announcement EnvelopeA-2 to A-10

11Here is an illustration of Announcement envelopes used to mail social items like invitations and announcements.These come in what is referred to as A sizes including A-2, A-4, A-6, A-8 and A-10 in size.

BookletCatalogExpansionTamper Proof

12Here you see some examples of the envelopes we just discussed.

The booklet envelope, or the open side type.

The Catalog envelope, or commonly referred to as the open end type.An expansion envelope that has a gussetted side of bottom for handling larger contents,AndA tamper proof envelope where once sealed, a visual signal is given thru a special window indicating the envelope has been opened.Envelope TypesCOMMERCIAL: The most common and widely used style. Has an open side and diagonal seams. Available as regular or window in #6-, 6-, 7, 7-, 8-5/8, 9 & 10.

LATEX SEAL: A self-sealing pressure sensitive adhesive that does not require moisture. Latex seal will only adhere to itself and therefore, two latex surfaces are required to obtain a bond.

PEEL & SEAL: A self adhering seal strip on the seal flap with a protective strip covering the adhesive. As the name implies, the protective seal is peeled away to expose the adhesive and close the envelope. No moisture is required.

13Some other types and terms of envelopes include:Commercial---the most widely used type envelope that comes in multiple versions including side and diagonal seams, square and diagonal flaps, regular and window as well as single or double flaps, depending on the application.

Latex Sealnot everyone likes to lick gummed envelopes. So, latex seal was invented. TWO surfaces are needed as they bond to each other.

Peel and Seal.here, only the flap has an adhesive protected with a strip of paper. Pull the strip and close the flap. A little cleaner than the Latex seal variety.Envelope PrintingLithographyHighest qualitySheetfed or Web fed

FlexographyGood Quality Geared to very long runsNot good with flood ink coverage

Jet PressesGood Quality Geared to short/medium Runs

14How do we get the ink on the envelopes?Really 3 ways.First, old fashioned litho. Litho, or offset printing, is the highest quality type printing. Envelopes can be run either already formed on a sheetfed press or, for long run or jobs that need critical color registration, bleeds or multiple operations, can be printed on extremely fast web fed presses and then diecut and converted into formed envelopes.

Second, and a little cheaper is the flexography process. Flexo uses a different type of printing process using a rubber or poly printing plate that applies ink directly to the papers surface. Flexo has good quality and is geared to be used in long run printings. From a quality standpoint, flexo is weak is on holding flood ink coverage.

Finally, ink-jetting envelopes is a great alternative to sheetfed litho printing on short to medium run jobs. Envelope PrintingEmboss or Foil StampConverted blank stockShort runOne operation with register to inkPrint and ConvertLong runMultiple EffectsMultiple Register issues

15When envelopes have a special effect like embossing or foil stamping, we can use the same methods. For short run jobs that are using only one special effect like hot stamping or embossing, and, being registered to an ink color, we can perform these operations on already formed envelope stocks,On more complicated jobs, with multiple effects and multiple registration issues, or, on a really long run job where the quantities approach over 25,000, then performing the foil stamping, embossing and ink printing on flat sheets, then converting them to finished envelopes are the method of choice. Again, remember, when printing flat and converting, extended production times are required to complete the job.Envelope Feeder on Press

16Here is a litho press showing an envelope feeder mechinism. The blank already formed envelopes are fed into the printing press where ink is applied. The standard location that most envelopes are imprinted is the Corner copy area where the return address is.Other areas include the Body of the envelope and the flap. When printing envelopes, it is necessary to make sure that the lower 3-4 inches of the bottom right edge not be printed. This is the area where the post office images the routing bar code information. Inside the post office, once the address is machine read and the envelope barcoded, no one else reads the envelope until the postman delivers it to your door.

Delivery End

17After ink is applied, the envelopes are delivered out the end of the press where the operator places them back into the same box he took them out of as blanks.Here the printed envelopes are re-inserted into the boxes they were taken from when fed into the press.Envelopes can be thermographed as well. Those jobs are run on sheetfed presses that are equipped with thermography tunnels.

Targeting Envelope OpportunitiesShort to Medium RunsCoupled with Business Cards and LetterheadOn Line Stationery Ordering ProgramsStatement ProcessingDirect MailOutgoing EnvelopeBusiness Reply Envelope

18Where are the opportunities to sell envelopes? Well, it starts with knowing that in most cases, distributors sell in the short to medium run markets, anywhere from 1000 up to 50,000 and more.With many print products, very long runs tend to commoditize a product and thus reduce the margins you can realize as the value added diminishes.Envelopes are typically sold together with Business card and letterhead programs and this is where distributors can excel. Finding customers that have over 500 employees or use a number of envelope products that are repeated orders can benefit from having an online ordering solution.Customers that have statement processing operations use lots of envelopes as well.Finally, the grand daddy of all envelope users, the companies that have direct mail campaigns. Most direct mail use TWO envelopes. One to mail the offer and the other to get the response. And its not only the envelope. Don forget to ask about the BRC, or the Business Reply CARD..

Selling Envelopes RECAPBillions of Envelopes usedTarget by Market and UseShort Run vs Long RunQuality of Print processEnvelopes always the add on to another project

19To summarize,There are Billions of envelopes used in the US each year and a significant share of the market can be serviced by the distributor channel. Short to medium runs of imprinted envelopes are a great source of repeat business.Target the customers by Market and then by use.Remember the differences between the short run and long run markets. If some one asks you to bid on 500K envelopes and up, you are most likely competing with some direct envelope manufacturer and as the product gets commoditized, you run out of worthwhile margin.The Quality is critical..WHAT is the envelope being used for? Find out. Then match the print process with the use.Finally, always ask about the envelopes when selling other projects. Sending out collateral in a direct mail run? Can I do the envelopes too? Sending out monthly statements? Payment reminders? APPOINTMENT REMINDERS? All kinds of projects.Distributors are selling over $385 million in envelope products annually. How much of that are YOU selling? Contact Business Stationery with your envelope projects and let us assist in helping you grow your stationery business.