General Advice for young printshop

[goose]

Hey everyone, I hope this is posted in an acceptable place. I wasn't sure exactly where to put it.

So I'm in a worker owner in an almost two year old printshop. We are a worker owned shop, and to be honest, I didn't know anything about printing when I got involved in the project. I was fresh in nyc for occupy wall street, and we were discussing starting worker owned businesses. We chose printing. Since then, I've fallen in love with the work. From learning to use an abdick 360 with nothing but the operators manual (lots of long nights and wasted paper) to constantly dealing with pos copiers, it's been a long and thankless startup phase.

We started with virtually no capital or equipment. We have been putting all our money into the shop this whole time, living off of part time night jobs on the side, which aint easy in new york city unless you're living on your parents dime, which we aint. One of us has a kid to feed, and we really need some advice to make it over what feels like the last hump before we are making a wage off this thing.

We have a bizhub pro c5501, and abdick 360 with a crestline watering system and surefoot sucker feet, a ryobi (forgot the number, I don't work on this press at all yet, it's a two color press from the late 80's or early 90's I think) an old champion hydraulic cutter, a collator, a martin yale 959 table top folder, a manual die press and some button machines.

Onto the questions:

How the hell do you set your prices? We try to be competitive, but we can't pay ourselves yet, and don't really know how to go about setting prices that work for us and are competitive. There is a guy about a half mile away that does 5000 b&w copies for $90. How the hell does he do that?

How should we go about getting new customers? We have a pretty consistent customer base, and it's slowly growing, but we really need to double our current volume, if not triple it. We mostly do postcards and business cards for other businesses and nonprofits, some booklet jobs, a rare wedding invite here or there. I'm wondering if you have any advice on a piece of the market we might be missing out on, or any advice in general about marketing. We currently plan on using the fact that we are a union worker owned print shop to try to get some business from unions and non profits in nyc by calling them up and telling them what we do, followed with a mailer, followed with a follow up call.

Any other advice would be greatly appreciated, and if you know anyone in NYC who would be interested in working with us, don't hesitate to send em my way. Thanks.

 

[CathieHarris]

Hi young startup printer. One thing I've noticed in my shop is that with having graphic design/desktop publishing in-house, someone can walk in with an old business card, photograph or even their mother's old recipe book and we can recreate or even create anything, then naturally we print it too.

I just had a guy come in with a security firm startup that has a new website, but no business cards to match it. So with the little high resolution graphics he gave me, I was able to turn them into some beautiful business cards in two days for a trip to Dubai one of his salesmen is going on to get some business there. He really needed great looking cards that matched his website.

So what I'm saying, is that having the ability to create inhouse graphics, although an expensive start-up venture, is a big bonus to getting people in the door and coming back.

Do you have prepress people now that can do design? Do you have all the current software? Fonts? None of this was mentioned, so I thought I'd throw it in there. Plus, when a designer talks the talk that nobody but a designer can understand, they really think you're smart and want to come back. :-b

That's just my two cents worth.
Cathie

 

[Stephen Marsh]

It is a fairly simple process to find out the local market price for different types of work - what is the competition charging for similar quantities and production methods? When you quote your sell prices, you may get feedback if your price is too high and will probably hear nothing if it is too low (in the first case you may not get the work and in the second case you may get the work). You decide where you wish to sit with regards to your pricing vs. the market price. See below.

Then there are your direct costs. Machines (lease, maintenance etc), Material (paper, ink, plates etc), Labour (for all departments) and outsourcing for stuff that you can't do in-house.

There are a lot of indirect costs that you have to factor in over and above direct costs.

The difference between your costs (direct+indirect) and the sell price will (hopefully) be your profit.


Stephen Marsh

 

[Fatboysmart]

Don't try to compete with Internet printers like Vistaprint and the likes. You will lose money if you try to match their prices. You have to give better service that justifies your higher prices.

 

[Stephen Marsh]

There is a guy about a half mile away that does 5000 b&w copies for $90. How the hell does he do that?

Here is a rough breakup of some approx. costs, which may help to illustrate the point. Remember that another printer’s costs may not be the same as yours due to different click rates, paper costs, and other direct and indirect costs of running the business:

5000 A4 1up on A4 single sided mono = $40 paper, $87 print run time cost (covering direct and indirect costs), $90 click charges - $217 total cost, before marking up any profit.


Stephen Marsh

 

[Green Printer]

Put the job on your ABdick 360. I use an epson ctp. Cost me $1.52 per side. I run 2 up on an 11x17. Ink and chemistry for this type of job cost me about $3.00. Paper cost $38.00. Takes 24 minutes to run. You can charge $90.00 and still make a profit. You can run 2 jobs an hour like this.
I have digital printers, black and white cost me $.01 per click or $10.00 per thousand impression. I can run my ABdick on this type of job for less than $5.00 in plate and inks and chemistry verses $25.00 for click charges.
Any BW job over 750 impressions I put on my ABDIck I have less out of pocket expenses. Before I choose this
route I consulted BestChem&Supply. They showed me how an old ABdick will beat the pants off of the digital printers on jobs over 500 pcs I choose 750 as my starting point. If i want to print a pms color a quick wash-up and I am ready to go and NO $.05 cents per click or $50.00 per thousand impressions.

I spent $2,500 on the ABdick and $2,800 on the new ctp system no click charges no monthly lease. With cost effective ctp along with easy to use plates, ink and chemistry that I get from BestChem & Supply I smile all the way to the bank.

Digital does have its place and so does offset. When used together you put money in your pocket instead of wasting it on click charges.

 

[goose]

We also offer in-house design services at pretty competitive rates. Thanks for taking the time to respond Cathie!

 

[goose]

It seems like the market here runs the gamut as far as pricing goes. I was hoping for some more advice about general pricing and promotion strategies. Like is there something we should be making more or less profit off of? Thanks for the input.

 

[goose]

Don't try to compete with Internet printers like Vistaprint and the likes. You will lose money if you try to match their prices. You have to give better service that justifies your higher prices.

We gave up on trying to match their prices months ago, although that was a mistake we made early on.

 

[goose]

Put the job on your ABdick 360. I use an epson ctp. Cost me $1.52 per side. I run 2 up on an 11x17. Ink and chemistry for this type of job cost me about $3.00. Paper cost $38.00.

I didn't think of running it 11x17, That makes sense. One thing Im wondering about is getting the volume up to justify those prices. You say I can run two of those jobs an hour, which would be great if I had ten of them to run a day. It seems like you pay less for paper than we do as well. I guess we have to either up our volume when we purchase it or find a different supplier?

 

[Lukew]

To be honest unless your overheads are minimal I personally believe your going to struggle to make in-roads in this industry the way it is these days.
A few years back I looked at doing what you have just done, and spent a good six months working on a business plan & conducting market research.
Once all the research was compiled and the business plan completed it became obvious that to make it in this industry, one needs a significant amount of capital, and if a press is being utilised at least a machine that can compete with your opposition. Second to that you really need to be able to cover the whole gamut of print, be it design - digital - offset - large formate - web. Either this is done all in-house or partial done outside.
Printing firms these days have largely become a one stop shop, clients want you to have the ability to cover all their print needs, this saves them from having to use multiple print firms to achieve the outcome they're after.

Number 1) Prior to starting your little print business, you should have completed a comprehensive business plan, which one area would have been market research regarding opposition pricing & also your finalised price guides. Pricing for paper stocks, consumables etc the whole gamut of costs associated with a print business.

Number 2 ) Once all that was done you could then see if A) there was enough margin to make it worth your while B) There was a market need for what you were going to offer.

Now a few young shops have opened up here and they are catering to a niche market utilising, letter press & many other forgotten technologies alongside the basics of print today and seem to be doing well.

One area of the market your setup sounds like it would be well suited to attack is the take-away shops (menu's), schools (flyers etc) Small trade stores ( basic business stationary - NCR docket books)

Another option if its available in your area is to utilise trade printers and on-sell, I know over here, a lot of the big trade printers pricing is so low small shops would be mad not to use them.

 

[rsands]

Run it on litho and its profitable. This job is way outside of digitals reach. Print is possible in sheer numbers and having digital and litho available to offer. Also...software is key. Keep an eye out on marketplace over next while for a full job management system that will be very cost effective Its been years in the planning and may allow you to get more efficient. If you are looking something like that drop me a PM and I can discuss.

 

[HarveyDunn]

Invest in having a sales person who responds to every email promptly and completely. I am amazed at how very, very bad most print shops are in this regard. I send an email inquiry - and sometime later I get a reply that says "call me and we'll discuss".

If I wanted to waste time on phone conversations that is what I would have done in the first place.

 

[Stephen Marsh]

Invest in having a sales person who responds to every email promptly and completely. I am amazed at how very, very bad most print shops are in this regard. I send an email inquiry - and sometime later I get a reply that says "call me and we'll discuss".

If I wanted to waste time on phone conversations that is what I would have done in the first place.

Does your email provide enough info for them to accurately quote without talking to you?

With a good MIS/ERP system, it should only take between around 30 seconds to 5 minutes to produce an accurate quote based on true costs, that is then emailed to the prospective customer or that is then accessible on the printer's online B2B website that is linked to the printer's MIS.


Stephen Marsh

 

[kdw75]

Here is a rough breakup of some approx. costs, which may help to illustrate the point. Remember that another printer’s costs may not be the same as yours due to different click rates, paper costs, and other direct and indirect costs of running the business:

5000 A4 1up on A4 single sided mono = $40 paper, $87 print run time cost (covering direct and indirect costs), $90 click charges - $217 total cost, before marking up any profit.


Stephen Marsh

On our digital press it would cost us about $25 in click charges plus paper and overhead. Slap it on the press and you could pocket some of that $25 in exchange for your time.

We sometimes run jobs digitally, even though it would make us more on the press, if we are short handed or need it in a hurry. Digital frees up a person in exchange for the extra cost. So you have to decide if you want more profit or the ability to do more work with fewer people. Of course with higher quantities you can let the press run and still be freed up to run a second machine if you have the work.

It is frustrating trying to compete on price. We used to bid on some local government jobs, letterheads and envelopes, and all the places in town were pretty close in price. A print shop about 45 minutes away in a small town though was able to print them for about what we could buy the paper for. Since they were so much cheaper we quit bidding after a while. The company wasn't very big so they were either losing money, getting their paper for free or something fishy was going on.

There a remarkable amount of overhead costs. And the less work you have the more you have to mark up each job to cover them.

 

[crossroads]

My situation is not that different than yours. I try to work more as a broker than a printer. I also have an ab dick, by i only use it as a last resort. As was pointed out,you get paid $25 for your time. Not the kind of money that can pay your rent. There are lots of printers with hundreds of thousnds of dollars woth of equipment running way below capacity. You can offer more and profit more reselling. Just be sure you know who you are buying from and what you are selling. Save the inhouse production for rush jobs or short runs.