by Jackie Mah, Star Tribune, July 25, 2002

To most, Tom Wicka is in the junk-mailing business. He’s the guy who gets companies to inundate your mailbox with unsolicited promotions and “unbeatable deals.”

But when Wicka talks about his company, Chanhassen-based Instant Web Co., he gets animated -- his eyes lock on yours, and his arms flail a bit. Instant Web doesn’t produce junk mail, he said, it offers “solutions.”

Such enthusiasm was probably unheard of three years ago, when Instant Web nearly hit rock bottom.

From 1995 to 1999, the company lost about 2,000 employees -- during a period of 50 percent annual turnover. Owned by founder and Chairman Frank Beddor since 1969, the privately held company struggled with manufacturing inefficiencies, a lack of innovation, and irreconcilable cultural differences between its three divisions: printing, envelope making and mailing.

Company growth was stagnant, and Instant Web had lost much of its market to larger direct-mail companies. Financially and structurally, the company had serious cracks, said Jim Andersen, the current president and CEO brought in from direct mailer Banta Corp. during Instant Web’s management overhaul in April 1999.

“Business was not managed well for the large part of the '90s,” Andersen said.

Beddor, who was unavailable for comment, hired Pete Karle, executive vice president and chief financial officer, along with Andersen. Wicka was brought in as vice president of sales early this year.

Two of his first major tasks as CEO involved cutting 48 of 990 employees and shortening its client list from 800 to 350, focusing on fewer, but larger, companies. The company now employs 800 to 900 people, and is one of Chanhassen’s largest employers.

“We’re not a perfect company, but we’re much better,” Wicka said.

Before the restructuring, Instant Web consisted of three divisions: Victory Envelopes, United Mailing and Instant Web printing. In 1999 the company, whose clients include American Airlines, AOL Time Warner and Columbia House, consolidated its three parts.

Other direct-mailing companies offer the “total package,” as it is known in the business, but they don’t handle an average order of 1.5 million pieces of mail per client, as Instant Web does, Wicka said.

Japs-Olson, a commercial printing and direct-mailing company based in St. Louis Park, is one of half a dozen Twin Cities companies that competes with Instant Web. Japs-Olson employs 650 people and its order sizes range from 100,000 to 5 million pieces of mail, said its CEO Michael Beddor, who is Frank Beddor’s nephew.

(The Beddors must have direct mailing in their blood: William Beddor, Michael’s father, co-owns Japs-Olson. Frank and William Beddor went their separate ways, but in the same business, Michael Beddor said.)

Think junk mail doesn’t work? Sales generated by the direct-mail industry rose 8.8 percent to $1.86 trillion in 2001 and is predicted to exceed $2 trillion this year, according to a 2002 study done by the Direct Marketing Association, an industry group. The industry, which reported $196.8 billion in sales last year, accounts for about 8 percent of the U.S. economy, the study said.

Instant Web’s three Chanhassen buildings house, among other things, 10 presses, three die-cutters, an 816-gigabyte database of client information and a small-quantity mail facility. The company has a fourth facility for bulk mail in Little Falls.

Rising stamp prices might threaten what Wicka #148ed as the company’s 1 to 7 percent profit margin. For each piece of mail, the company spends 8 to 12 cents on the envelope and paper and 15 to 20 cents on postage, he said.

E-mail “spamming” doesn’t threaten to the company’s bottom line because direct mailing is considered less intrusive and more acceptable by recipients, Wicka said. Direct mailing also has a better response quality compared with e-mail responses that can be sent without thought, he said.

And, he said, “Once in a while you’ll get something in the mail that’s kind of slick.”

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Copyright 2002 Star Tribune. Republished here with the permission of the Star Tribune. No further republication or redistribution is permitted without the express approval of the Star Tribune.