History

With the rise in demand for security in markets such as education, Idesco Corp.has become more than just a 61-year-old card manufacturer. The multi-million company is now recognized as one of the largest security systems integrators in the New York area.

Business Solutions, by Dan Schell

After 66 years, IDESCO continues to flourish; offering a conservative approach
In 1943, Andrew Schonzeit wasn't even born. However, the company he is now president/CEO of, Idesco Corp. (New York City), was just getting started that year - by Schonzeit's grandfather. "The ID card business has been in my family for three generations," Schonzeit said. "In the 1940s, my grandfather was making ID cards for the War Department via a cut and paste system." Commonly known as the composite or film-based method, this system involved taking a person's photo, cutting it out, and laminating it to a card-sized piece of paper. The paper contained the person's name, ID number, and any other personal information. This method of ID card manufacturing actually lasted as the standard in the industry until the early 1980s. It was at that time that the first card printers and digital ID systems were introduced. One of the first distributors of this new technology was Idesco.

Today, Idesco employs 40 people (e.g. sales, service technicians, customer support, marketing). The company is now recognized as more of a safety and security systems integrator rather than just an ID card manufacturer. Access control equipment, closed-circuit TV cameras, laminating equipment, and safety equipment (e.g. signs, tags, and locks) are all part of Idesco's product line. "Although security comprises more than 70% of our business, card printers are usually part of those solutions," Schonzeit explained. "Card printer sales still account for almost 40% of our revenue."

Making The Grade In School Security
It should be no surprise to anyone why the security market has gone through the roof in recent years. Highly publicized stories of shootings in schools, restaurants, and offices have created a culture obsessed with security and safety. Consequently, as with many ID card printer suppliers, Idesco has experienced significant growth from this trend. "In the past decade, the demand for increased security really took this company in a new direction," Schonzeit said. "For instance, we now provide services like on-site badging, card design, and database programming. In particular, the education market offered us the largest opportunities."

Ten years ago, colleges and universities were almost the only educational facilities that used ID cards. Today, high schools, elementary schools, and even some daycare centers use ID cards both for children and staff. Moreover, the cards are being used for more than just identification. Some common applications for ID cards in education include:

• Student, staff, and visitor photo ID badges
• Controlled entry to an entire campus
• Registration processes/record keeping
• Meal programs
• Library/bookstore checkout
• Equipment (e.g. sports, audio visual)
• Activity passes (e.g. plays, dances, sporting events)
• Fundraising activities (e.g. coupons for use at area merchants)
• Vending machine purchases
• ATM cards
• Time and attendance

Business From More Than Just Word Of Mouth
According to Schonzeit, if a company is looking for an ID card printer in the New York area, Idesco's name will almost always be mentioned. Indeed, with 58 years of experience, the company receives the majority of its business through word of mouth. "Equally important, though, is getting customers to visit our huge showroom," he said. "Once there, they can try the equipment firsthand. That makes a big impact on their decision making process."

Idesco also gets leads from its vendors and from Pro-ID, a national organization of card printer companies. In addition, the company receives about 10% of its leads from relationships with electricians, general contractors, engineers, security companies, and alarm companies. "These kinds of partners are usually involved with new construction or renovations," he explained. "Residential security, which includes card access to buildings and parking garages, is big business. That's why we even go to some real estate trade shows." For any of these projects, Schonzeit said it is important to find out the number of personnel using the cards and the size of the building(s). In addition, the type and location of the equipment and the level of security required should be determined. Since security is an intangible concept, VARs and integrators need to translate it into financial savings when discussing a client's return on investment.

Beating The Competition By Selling More Than Price
When Schonzeit's grandfather was making ID cards (and up until the 1980s), the initial investment for a film-based system was relatively low. Unfortunately, the time, labor, and individual cost per card was high with this method. Plus, these cards were easily counterfeited. Digital printing changed all of that. However, now Schonzeit fears that card printers are becoming so affordable (e.g. $3,000) that some vendors may soon choose to sell direct through retail stores. This is especially disconcerting to him since Idesco acts as a distributor for many integrators nationwide. "We typically sell one or two printers to a large corporate business or another integrator," he explained. As examples, he cited the United Nations, the New York Yankees and Mets, the U.S. Open, and many hospitals in the New York area.

Many of Idesco's competitors offer low priced products direct via Web sites. In 2000, Schonzeit decided to redesign his company's Web site (it receives 1,000 hits per month). Through a partnership with Thomas Register (New York), the site now has e-commerce capabilities. Nevertheless, Schonzeit doesn't expect the site to account for more than 5% of sales. "The biggest mistake our competition makes is assuming that a low markup is the way to go for easy sales. They're not selling the service, which is really what creates a long-lasting customer."

Schonzeit is a savvy businessman. He realizes that despite his company's long reputation, change is inherent for continued success. Technology evolves. Trends like the current focus on security in education come and go. "This is a growing business," he said. "But I can tell you from personal experience, it is not recession-proof. You've got to develop, and more importantly, maintain customer relationships. If that's the key to good business, then we must be doing something right."