Three Ways To Save On Catalog Printing
As a catalog mailer — and now as a consultant — I’ve negotiated lots of printing contracts, from small jobs through multi-million-dollar, multi-title agreements. Along the way, I’ve wised up to some of the ways any cataloger can save on printing costs. Here are three ways to save money:
1. Look at paper requirements
If you’re printing fewer than, say, 1 million catalogs a year, chances are you are letting the printer supply your paper. (Larger players typically purchase their paper separately, but we’ll leave that subject for another time.)
Here is what I usually see in such printing quotes: the printer agrees to produce a given quantity of your specified catalog for $xxx, which covers manufacturing and ink, and agrees to supply the paper at a specified cost. They may tell you the paper price per cwt. (hundredweight) or per thousand copies. And, they will state the charges for increments above or below the “base” quantity.
But, one critical factor tends to get glossed over when you compare quotes: How much paper (in pounds) will the printer be charging you for? If you look carefully, you’ll see large variations, some caused by differences in manufacturing methods and some just padded in for profit. If they don’t spell it out, just take the total paper price and divide it by the price/cwt.
In other words, don’t judge the paper cost by the price of the paper price alone. If Printer A is charging $44.50/cwt (per hundredweight) for your grade and weight of paper, while Printer B is only asking $43.50/cwt for the same paper, look closely at how many pounds they’ve each figured into calculation of the total paper dollars. Printer A may require 155,000 lbs. of paper, while Printer B figures 167,000 lbs. (this much difference is not uncommon). In this example, Printer B’s paper is cheaper by $3,670. And if you’re dealing with a multi-issue contract, paper prices may float up or down, but the amount of paper for a given page-count and paper stock can be fixed in the contract.
The fact is, paper is a profit center for most printers. They can’t predict exactly how many pounds they will need for a given print run; spoilage tends to be variable throughout the system (core waste, press startup, bindery startup, etc.). What they do is include enough to handle expected makeready and run waste, and then pad in some extra. You’d better believe they err on the side of caution, meaning that most of the time, they “under-consume.” What happens to the extra paper you’ve paid for when it doesn’t get used? They just keep the paper and your money, of course!
I’m not knocking them; they’re just trying to make a profit. But they fully expect that a sophisticated buyer will negotiate the amount of paper used, along with the other numbers in the bid. And, incidentally, the savings enjoyed by large catalogers who furnish paper to the printer come mostly from a) paying only for the paper that’s used, and b) taking advantage of cash discounts the mills offer for payment up front — not necessarily from lower paper prices.
2. What happens when you grow?
This is one I figured out the hard way, a little over 20 years ago. I was with a fast-growing catalog company (Crutchfield Corp.), and I got print quotes based on 1 million copies per mailing, with per-thousand prices for increases over the 1 million. I dutifully compared all the printers at that same quantity, so that I would have an apples-to-apples comparison. What I neglected to do was to compare the prices at 1.5 million and 2.0 million. The printer I chose, knowing we were growing fast, had cleverly provided lower prices at one million, along with higher per-thousand prices on incremental books (which I had ignored).
Through the course of our contract year, we grew into the higher numbers, and I learned an expensive lesson.
And here’s something interesting to do when you look at a printing quote that’s given to you in that format: Take the “incremental” cost (the per-thousand) for the job — or for any aspect of it — and multiply it by the quantity in the “base.” The difference between that product and the amount they’re charging for the base quantity is basically the imputed makeready cost.
Example: Printer charges $40,000 for 100,000 copies, plus $35/M for additional copies. (M is thousand in printing shorthand.) From this, you can infer a makeready charge of $5,000.
In my case from the 1980’s, the makereadies built into the printer’s pricing structure were actually negative!
3. Ask for a Pro Forma (sample) invoice
The most sophisticated way to buy printing is to negotiate — separately — each component of the process, from prep to presswork to binding to distribution. But even with lots of experience, it’s hard to predict exactly how you will be charged for a particular catalog specification. To gain a better understanding of how each printer would actually invoice you, request a sample invoice for your most likely page count and quantity. That way, you’ll get to see all the little charges that otherwise may seem like “gotcha” surprises when the real invoice arrives … and you’ll be able to compare printers more fairly.