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Estimating offset printing cost

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  • #16
    Originally posted by arossetti View Post
    Wait, 72 pages or signatures?
    Sorry, 72 pages, not signitures.

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    • #17
      Originally posted by easiprint View Post

      I agree AP90 - I'd love to know how people could print this digitally cheaper than outsourced litho.
      Now we are getting into the weeds a bit but I could bet that a 0% margin in-house job contributes more to your bottom line than an outsource job with a straight 30% markup.

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      • #18
        Originally posted by arossetti View Post

        Now we are getting into the weeds a bit but I could bet that a 0% margin in-house job contributes more to your bottom line than an outsource job with a straight 30% markup.
        Are you being serious? You think it’s better to run a job in house and make nothing than to outsource a job and have a 30% profit on the job? Sorry but that’s not the way we do things.

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        • #19
          Originally posted by AP90 View Post

          Are you being serious? You think it’s better to run a job in house and make nothing than to outsource a job and have a 30% profit on the job? Sorry but that’s not the way we do things.
          I think he didn't say it exactly how he meant it, but I agree with you. Not having your machine tied up to trade dollars for dollars, on top of employees being paid to do work that amounts to dollars for dollars work means that you can't make money doing other things, therefore making a tiny bit of money by outsourcing and freeing up your time to do more work is infinitely more profitable, by probability.

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          • #20
            Originally posted by PricelineNegotiator View Post

            I think he didn't say it exactly how he meant it, but I agree with you. Not having your machine tied up to trade dollars for dollars, on top of employees being paid to do work that amounts to dollars for dollars work means that you can't make money doing other things, therefore making a tiny bit of money by outsourcing and freeing up your time to do more work is infinitely more profitable, by probability.
            No I said it the way I wanted to say it. If you are not at 80%+ utilization of your printers each month then yes I would run the job in-house at 0% and contribute more to the bottom line. My 0% in-house margin is an all inclusive rate; if you just slap 30% to your outsource quote how much of that contributes to admin/overhead?

            I would suggest doing some research on manufacturing accounting if all this comes as a shock.

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            • #21
              Originally posted by arossetti View Post
              My 0% in-house margin is an all inclusive rate; if you just slap 30% to your outsource quote how much of that contributes to admin/overhead? I would suggest doing some research on manufacturing accounting if all this comes as a shock.
              That seems really convoluted. Cost is cost. Utilizing a sunk cost does not save you any money. (e.g. I paid $5 to rent this movie, so I'd better watch the whole thing or I'll be losing $5). Amortizing sunk costs into production costs is a valuable mental exercise, but don't confuse it with reality.

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              • #22
                Originally posted by kansasquaker View Post

                That seems really convoluted. Cost is cost. Utilizing a sunk cost does not save you any money. (e.g. I paid $5 to rent this movie, so I'd better watch the whole thing or I'll be losing $5). Amortizing sunk costs into production costs is a valuable mental exercise, but don't confuse it with reality.
                How can you say cost is cost but then disregard a sunk cost like a printer lease payment?

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                • #23
                  Originally posted by arossetti View Post

                  How can you say cost is cost but then disregard a sunk cost like a printer lease payment?
                  I think there’s a couple points being missed here.

                  1. That lease payment is for a digital printer and digital jobs. I think we can all agree the job I posted is in no way a digital job.

                  2. Your assuming that throwing it on a digital press and getting 0 profit on the job the client is still going to give you the job. I can tell you I pay jusy about half of what just paper and clicks would cost me to print the job digitally. For jobs that are a couple hundred $$, no biggie, you do that on a big enough job and your talking big money. The profit on this job can cover our lease payment for the month. You can’t just go with utilization. We could utilize our digital equipment for this job. We would loose money. That does not help the bottom line.

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                  • #24
                    Originally posted by AP90 View Post
                    1. That lease payment is for a digital printer and digital jobs. I think we can all agree the job I posted is in no way a digital job.
                    I don't disagree that an offset press is probably more profitable on average but I also think there are digital presses who would run this work. You have to look at the economics of each operation. HP10000 is a different digital printer than a Xerox 1000.

                    Originally posted by AP90 View Post
                    Your assuming that throwing it on a digital press and getting 0 profit on the job the client is still going to give you the job. I can tell you I pay jusy about half of what just paper and clicks would cost me to print the job digitally.
                    I never mentioned your job specifically, I just said running a job internal at your cost versus outsourcing it and putting a 30% markup on the invoice the choice is easy for me. I'll run it in-house if I have the capacity. I never said this job should run on your equipment.

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                    • #25
                      Originally posted by easiprint View Post

                      I agree AP90 - I'd love to know how people could print this digitally cheaper than outsourced litho.
                      Neither cheaper, nor better.

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                      • #26
                        Originally posted by arossetti View Post

                        How can you say cost is cost but then disregard a sunk cost like a printer lease payment?
                        Because a sunk cost isn't a variable cost. When somebody says 'cost' they mean variable cost. I'm not saying that fixed costs don't matter, just that they don't matter when calculating the variable costs of a single job - which is the task at hand. Google 'sunk cost fallacy' for more information.

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                        • #27
                          Originally posted by kansasquaker View Post

                          Because a sunk cost isn't a variable cost. When somebody says 'cost' they mean variable cost. I'm not saying that fixed costs don't matter, just that they don't matter when calculating the variable costs of a single job - which is the task at hand. Google 'sunk cost fallacy' for more information.
                          What's your BHR on your main press and how did you calculate that?

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                          • #28
                            The way I see it you could save 75k on clicks by using the volume to drive down your overall contract. It's not a lose because volume and efficiency go hand in hand. In any case it sounds like you have a very fair price currently with your trade printer @ .024 per 4/4 letter sheet including finishing.

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                            • #29
                              If a Delta Airlines didn't manage their utilization rate as closely as they do how long do you think they would be in business? Minutes on the ground cost them thousands of dollars, but should they not consider that a cost?

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                              • #30
                                Just for reference. We use 5,000 impressions as the cutoff from digital to offset for 4-color work.

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