Dealing with Your Printer
by Stephen Lett
The relationship you have with your printer is important. After all, your printer is probably your largest unsecured vendor. Today, the printer does more for the cataloger than put ink on paper. They ink-jet address and distribute catalogs to your many customers and prospects all over the country through the United States Postal Service efficiently and for the lowest possible cost. The printer is important to you and they should be viewed as a business partner to your company. When deciding on a printer, price is certainly important. No cataloger should pay a large premium for the privilege of dealing with a particular printing company. Agreed. However, there are other factors such as service, lead times and technology, which should be taken into consideration. The purpose of my article this is to provide you, the cataloger, with helpful ways to deal with your printer. Also, I want the printers who read my article to know how important they are to catalog companies. Both the cataloger and the printer must work closely together towards a common goal of providing a quality catalog and on time deliveries for a competitive price. Most catalogers shop price when obtaining printing bids. Again, price is important but there are other factors that need to be considered as well. Naturally, we expect printers to be competitive and most are generally within 5% of each other. The following are suggestions you should consider the next time you obtain printing bids:
- Be sure the printing company you solicit a bid from is a catalog printer. A catalog printer prints, binds, ink-jet addresses and mails the catalogs directly from their printing plant.
- Always obtain at least three different bids. It could be that all three printing proposals will come out about the same. If one bid is high, most likely you will discard it. If one bid is low and the other two bids are considerable higher (and about the same) it could be that (a) the one printer who stands out is providing a low-ball quote in order to obtain the work or (b) they may not understand the specifications.
- Match your company’s culture with that of your printer. You must be comfortable with the people and company you are dealing with frequently. Companies generally prefer doing business with companies they can identify with culturally. The size of the company should be taken into consideration too. The very large printing companies have tremendous capabilities and resources but whether they are structured to provide the level of service your company needs is the question. Sometimes bigger is not always better.
- Can you work with a particular company, almost daily at times, and how will you feel about them as a large creditor? Is this a company you can count on say 5-years from now? If the answer is yes, perhaps you should develop an even closer working relationship with them.
- How does the printing company feel about your company as a customer? Your printer needs to know that your company is someone they too can grow with. If the printer is someone you would like to do business with, you should make every effort to enhance your working relationship. Show the printer that you care and that you are committed to them long-term.
- Customer turnover should be considered. Ask the printer to discuss customer turnover with you. Find out how long their top 10 customers have been printing with them. It is important to know what percentage of customer turnover the printer experiences annually. It is even more important to find out why customers take their business to another printer. Keep in mind that it is very easy for a printer to offer a cataloger a low price. But, a low price alone will not retain the cataloger long term. Price cannot be the glue that binds the relationship.
- Don’t go out for bids unless you are willing to change printers. Printing companies are wise. If they feel you are simply shopping the market in order to obtain a better price from your current printer, they will not quote their “best” price to you. This can become a credibility issue. A printer needs to know that you are serious about switching companies for all the right reasons. I feel most printers would understand if you stay with your current printer for a price difference of up to 5%. But, if the differential is more than that, you need to be willing to make the difficult decision to take your business somewhere else. It is generally best not to change printing companies unless there have been issues other than price. If you like your current printer, most likely they will be price competitive.
- Contract for one year at a time. Unless you are a very large catalog company, contracting for more than one year is not necessary. Too many things can change and going out for bids no more than once a year is a good sound business. It is a very competitive business and you want to remain current.
- Be certain you are quoting the same amount of square inches of selling space. Catalog trim sizes will vary from one printer to another. It is important to convert the physical dimensions and number of pages in your catalog to square inches to make it easier to compare prices. Also keep in mind that going to a slightly smaller trim size can save money without affecting your results. For example, a trim size of 8” X 10 1/8” will pull as well as a catalog measuring 8 3/8” X 10 ¾” yet the slightly smaller trim size will cost less to mail.
- Always have the printer split out the paper price from their cost to manufacture the catalog. Have them tell you the hundredweight price of the paper, which they are using to quote your job. This will help you identify differences from one printer to another. Some catalogers like to purchase their own paper, which is another reason to separate the manufacturing cost from the paper price. Catalogers can benefit from purchasing their own paper but there are drawbacks to doing so too. This is often a cash flow problem since the paper will need to be paid for before the catalog even goes to press. What’s more, changing printers can result in butt rolls of paper leftover, which cannot be used. Paper can also arrive damaged and if you have purchased the paper directly, often you are left to deal with the merchant or the paper mill, which can affect your press date. Also, if the printer has a problem on press as a result of the paper, it is your responsibility, not theirs. This can result in press downtime at a rate of up to $1,000 per hour, which can become expensive.
- Be sure the quotations are based on the same basis weight and paper grade.
- Always check to make certain your comparison includes cover changes, mark-ready costs, ink-jet addressing, etc. You should also include any cost the printer charges to receive electronic files; locked or unlocked files. This is a real cost and needs to be part of your comparison today.
- Mailing and catalog distribution also needs to be taken into consideration. This includes the postal drop-shipping charges. This is difficult to compare. Generally, the difference between most catalog printers is slight.
Lets now consider a few points, which will help strengthen the relationship you have with your printer as follows:
- Don’t think of yourselves as separate entities but rather as one working together towards a common goal, i.e., to serve your catalog customers and prospects.
- Be sure to communicate clearly and frequently with your printer. Good communications is the key to a successful relationship. Let them know in advance what you are thinking and why. The printer cannot always react on time due to lead times. But they can help you solve problems if you let them know openly what is on your mind.
- Do not jump from printer to printer every year. The printing companies know the companies who tend to jump around from one printer to another. You will not get a printer’s “best” price by getting this reputation. In fact, you would most likely pay a premium because the printer knows there is no loyalty factor. I do not advocate or encourage companies to change printers frequently. Any relationship builds and improves over time. The longer you remain with a particular printer, the better they will get to know your specific needs. The more loyal the relationship will become.
Costs continue to increase. While paper prices have come down, postage costs will soon be going up. Cost increases are a fact of life and, I’m afraid what this might mean for catalogers. What can you do to reduce your printing and mailing costs? Here are a few suggestions:
- Trim Size – Ask your printer for alternative trim sizes which can reduce paper and postage costs, especially if your catalog exceeds the Standard A piece rate minimum.
- Your Disks – Prepare them correctly. Send them to your printer with all of the necessary files.
- Paper Weight – Consider a reduction. Paper is sold by the pound. If you use fewer pounds, you may save money. You can save money on postage by using lighter weight paper for sure, providing your catalog mails at the pound rate. My experience would suggest that using 34 lb., #5 paper, for example, has no bearing on the response rate compared with using 38 lb., #5 paper. Therefore, I encourage the use of lighter weight papers in order to reduce postage expense.
- Leverage Longer Print Runs – Use multi-covers and a re-mail strategy in order to maximize your economies of scale.
- Purchase Your Own Paper – Is it good to do so? This is something I do not recommend unless your company is of the size and scope to deal with any resulting issues mentioned earlier. Recently, I checked with a catalog printer about this and learned that 67 out of 72 of their catalog customers buy the paper from the printer. Most small and medium sized catalog companies are better off to let the printer purchase their own paper for the following reasons:
- The printer has more leverage over price since they purchase paper for many different firms from the same mills.
- Cash flow is better for the cataloger if the printer buys paper. Most paper companies will expect payment before the catalog even goes to press.
- If the paper is bad (which is rare but does happen), the printer is expected to deal with the paper mill; not you.
- You eliminate management time it takes to deal with the inventory of butt roles, incoming shipments, etc. The process of managing the paper can be time consuming.
- If you ever do change printers, you will not have to be concerned about transferring paper inventory from one printer to another.
The incumbent printer always has the advantage. Competitive bids are often obtained for the purpose of convincing the current printer to match and lower their prices. Catalogers do not like to change printers. Do keep in mind that the more you obtain bids from other printers and remain with the same printer, the less competitive the bids will become. Printers will know that the bids are being obtained for the purpose of leverage with your current vendor. Be fair. Be honest. And, buy smart!