Powder Coating Services

Question:

We are a job shop powder coater searching for a new application. Powder coating is the backbone of our company and will continue to be so. Although, as time passes it seems that our high volume work either ends up in China or our customers install their own powder coating line. We have lost business for these reasons. We are very attentive to our accounts, knowing our place in the manufacturing food chain. Quality, service and pricing are our mantra. We are successful at maintaining accounts, but it is impossible to compete with offshore suppliers and in-house systems. Other than liquid paint, are there any other applications we could venture into with our existing powder coating line? I would appreciate it if you did not publish this email. Thank you for your time. A.F.

Answer:

I am sorry about not honoring your request not to publish this question. However, since PF publishes these questions anonymously and since this question is a popular one, I thought that I would answer it in my column as I usually do.

In the ’70s and ’80s powder coating was a relatively new and unusual technology. In those days, a “build it and they will come” marketing approach worked well. This means you got business just because you had a powder coating system when most job shops did not offer this service at all. However, as powder coating has become more mainstream and more job shops installed powder coating systems, job shops had to evolve to stay competitive and keep their customers. First of all, you will never compete or stop a company from installing its own in-house powder coating operation. The transition to installing an in-house system is driven by production volume, quality, costs, delivery and scheduling issues. Although you can forestall this transition by offering quicker turnaround of smaller lot sizes of high quality coatings at lower costs, eventually you will lose this customer. However, this has always been a problem for job shops since the beginning of time.

Today the “Global Economy” has provided added pressure to keep pricing low. Imports from offshore countries with lower labor rates and government-subsidized raw materials have become a problem for many manufacturing and services companies in recent years. Fighting this has also proven to be difficult. However, if you think about it, this can provide other opportunities.

Companies rarely send product to offshore entities for just coating services, because the cost of shipping and quantities to make this practical are very high. What the offshore companies are doing is providing completed assemblies or semi-assembled products that are delivered powder coated. You can also offer your coating services coupled with other value-added services like assembly, machining, fabrication, silk screening, etc. This allows you to offer the convenience of “one-stop shopping” for your customers and to have a rolled-up cost on many services. This makes it difficult for your customer to shop your services for a lower price.

The successful job shop in today’s economy must be in a position to offer a complete package of value-added services that streamlines its customers purchasing of finished goods. Migrating to a one-stop fabrication, assembly and coating service company can be the answer that you and your customers are both looking for.