Selling Industrial Labels for Recurring Revenue
Print distributors are always on the lookout for profit-building opportunities. Notice we said “profit” and not “sales.” There are plenty of products that bring in sales, but do they make money? If you have products with low profit margins, you can sell a lot of them and still not make very much. This is where industrial labels shine.
High-profit products are different. These are products that have a high profit margin built into them. This means you can sell less of them and still make the same amount of money (or more). This is why distributors should consider selling industrial labels, if they aren’t already.
Industrial labels are highly profitable, and the market is huge. Just compare it to another market many distributors are already eyeing, the commercial labels market. According to Market Research Future (MRFR), the commercial labels market is expected to reach $20.6 billion in 2025 with a steady 3.3% yearly growth. That’s impressive, but the global industrial labels market is set to hit a whopping $66.7 billion in 2023 with growth of 5.2% CAGR through 2033. That’s three times higher! No wonder industrial labels are drawing so much interest.
Let’s take a closer look at some of the characteristics that make industrial labels so profitable.
1. Recurring revenue
Recurring revenue is the holy grail of business sustainability. It provides a stable income stream that allows distributors to plan and grow confidently. With a foundation of recurring revenue, you can be out there selling new products and services knowing you have a steady source of income supporting you in the meantime. This is where industrial labels shine. Once established, industrial labels ensure consistent demand month after month.
2. High repeatable nature
Industrial labels are highly repeatable products. One-off sales are time-consuming because each sale requires a time investment. Repeatable products are simply reordered time after time. Wise offers a Repeat Order Prediction Engine (ROPE) that predicts when an order is likely to repeat based on past order history. This way, distributors never miss a sale.
What are some examples of highly repeatable labels?
- Barcode labels
- Product identification labels
- Safety labels
- Serial number label
- Quality control labels
- Inventory labels
- Asset labels
- Calibration labels
- Pallet labels
- Tamper-evident labels
This is just a sampling. The actual list is long!
3. They are sticky.
Industrial labels are specialty products, requiring significant expertise to match the label base to the substrate (product, drum, physical asset). Once you identify the right combination of label substrate and adhesive that will adhere to the base substrate and meet the often challenging performance requirements of the application (i.e., the need to withstand harsh weather conditions, extreme temperatures, and chemical splashes), you are unlikely to lose the business easily.
4. Building long-lasting relationships
Because of the sticky nature of this business, industrial labels open the door to long-lasting client relationships. When you become a reliable source for industrial labels, this can lead to additional opportunities over time.
5. Diversification and stability
Print distributors often face market fluctuations and seasonal demand. By including industrial labels in your portfolio, you can diversify your product range and reduce your dependence on one-off, project-based jobs. Diversification provides stability, ensuring that you have a reliable income stream even when other segments of your business fluctuate.
6. Upselling opportunities
Selling industrial labels can lead to upselling opportunities. For instance, sales of traditional barcoded warehouse labels can lead to an upsell to RFID labels. If the customer is struggling with theft or unauthorized returns, traditional asset tags can be upgraded to add security features. These value-adds can let you increase your revenue per customer while still allowing you to benefit from the repeat business generated by standard products.
7. Easy integration into existing sales
Adding industrial labels to your product line does not require a huge learning curve or complete overhaul of your sales process. You don’t have to be the expert—your printing partner is. You develop the relationships. Your label expert develops the right solutions that meet their needs. This makes selling industrial labels a relatively low-risk investment with the potential for high returns.
In the competitive world of print distribution, finding opportunities for recurring revenue is essential for long-term success. Thanks to their highly repeatable nature and consistent demand, industrial labels offer a strategic path for distributors to secure stable income with little additional effort.
Bob Saunders is vice president of Wise, a top manufacturer in traditional forms, tags and labels, and digital printing solutions to the reseller market.