Digital Color Print Pricing

[printguy]

One of my job responsbilites is to repond and quote digital color print pricing for proposals. My research shows that pricing for an 8.5 x 11" digital static color print piece can vary greatly, but pricing is trending downward. I've seen pricing as low as $.08 for a digital color impressions and as high as $.90. I'm constantly being challenged by my upper management regarding pricing.

Scratching my head over the $.08 price. Any feedback or experiences you can share regarding where you see pricing headed would be helpful.

 

[Michael Josefowicz]

It all depends on the market

It all depends on the market

I think digital is much more sensitive to the market than offset.
The short answer is as much as you can get away with.

If you are going against Kinko's or Staples, the price they charge is a good place to start.
If you are going against Mimeo that's another price. The only way to get a good price for your outfit is to look at the competition..niche by niche.

You can't go lower than your costs. Just be careful that when you are figuring out your costs make sure you take into account the cost of entering, processing and delivering the job. In digital that's usually a lot more than the cost materials and equipment.

Good luck.

 

[Thomson Litho]

I would agree with Michael to an extent......i am from the UK so not aware of most of your competitors.......however, it really depends on what you will tie in with the costs, obviously digital has basically no make ready time, but does vary depending on which machine you have, if you are changing paper sizes and weights etc, but very low compared to offset.....another way there could be just a difference is the mass bulk in which you buy paper, but to do this you will obviously need storage space, i am not really sure HOW much this could bring the price down but could count towards the variation in which you see in price. The last one i can think of on the top of my head is that for certain jobs, companies may well be taking either a loss or breaking equal to get something in the door.......

 

[Michael Josefowicz]

Thomson makes a good point. But... the problem is that all in costs for digital prints are even harder to figure out than offset. Since so much of the real cost is "overhead" , it's really hard to figure out the marginal costs after a break even point. If it were me, I would focus on the competition in the markets you have. It's not straight forward, but I think the effort will be much more worth it.
I have to say, thought that the idea of "taking a loss or breaking equal to get something in the door.." is very, very dangerous. The very customer you are atrracting by a below cost price is exactly the customer you don't want long term. IMHO, from the safety of not having to make this decision every day, is spend more time on finding the customers who will pay a "fair to firm" price. Just some more of my 2 cetns.

 

[Thomson Litho]

Focussing on your competitors is obviously the a great guide, especially if you are just starting out, but you never know how they get there, thats what i meant, they may have cheaper suppliers, aim for lower margins, better supply chain management..... Well it is a very dangerous game and no doubt if you were to do it you wouldnt be around long enough to have them as long term customers, lol. But what i was saying was he was saying he found variations from $.9 to $.08 and i thought it may be companies, say who have guys on salaries and business is slow, you might as well get jobs i since you are paying them already rather than not doing anything, it is very dangerous as you say but it was a suggestion as to how prices could be so low??? Everyone is always wanting to keep costs down and the search is eternal but i do not know how else the price could be so varied????

 

[Michael Josefowicz]

But what i was saying was he was saying he found variations from $.9 to $.08 and i thought it may be companies, say who have guys on salaries and business is slow, you might as well get jobs i since you are paying them already rather than not doing anything, it is very dangerous as you say but it was a suggestion as to how prices could be so low???

I've seen the same thing you do.. About underpricing to get the work.
But....if you look at from the marginal cost point of view, it might be that the overhead costs are being absorbed by a certain volume. Then the marginal cost is very, very low. It's like the "long tail" that is a buzz du jour on the net.

Or they have a different business model like Vista Print, which gives away business card in order to build volume. My take is the b card printing is really a customer acquistion cost and is porbably put in the advertising budget.

If you can, you might want to try to price the job at the perceived value in the client's head. If you can solve a $10,000 problem with $100 worth of printing, the click cost is irrelevent.

Meanwhile, I know a printer who charged and happily received $10,000 for a project that required about 500 clicks of variable data.

FYI- the $10,000 problem was an HR problem in a large company. The deal was the company's employees didn't understand how much the company was giving them what with benefits, health insurance, time off, education allowances. So the printer got all the data and printed out 1 page personalized reports telling each employee how much they were getting. To someone with a check book that was a $10,000 problem.

Just be careful about assuming that you and your competition have the same cost of production since you both have toner, lease and paper expenses. Turns out that the biggest difference is the cost of the business systems surrounding the clicks and the business model you are using.