Is Digital Right for Me?

[AP90]

Hey guys, been lurking on the forum for a while reading information. I have no printing background, but am looking to get into it. Basically I have a publishing company where we do monthly publications. We have 13 different publications and the issues per publication run anywhere from 1800 to 4500. Right now I outsource my printing to offset, but am looking to bring it in house in order to save money. i currently run about 1.1 million 8.5x11 pages a month, and usually have a 3-4 day window before the printing needs to be finished. Also, about 300-400k of those involve color.

My volume stays roughly the same each month, so its a pretty predictable situation that I'm in. I have met with a Xerox representative and we have sat down and talked about my needs and what would work for my company. They are pushing 2 Xerox 1000's to me right now, and from what I've read they have offered a pretty good 6 year lease on them with a competitive click charge. I have calls in to KM, HP, Canon, and Kodak to get information, Xerox has just been the quickest to respond and set up something, but KM has responded so far. I will say that I am pretty impressed with how Xerox has handled themselves and the sales reps that I have talked to. It doesn't seem I'm getting worked over on price compared to what I have read about others and their experience with Xerox pricing and sales reps.

Im really just looking for your guy's thoughts on my situation and if digital is something I should be considering. Xerox seems to think its fine, but I wouldn't expect anything other than that from them. My first goal is to save money on my current printing bill, if that cannot be achieved then it is not an option for me to bring the printing in house. But I will be looking at additional printing jobs to make more money and grow the business into another sector. I feel my main focus would be on business cards and business to business printing. I do not want to be a store front printing shop. Any advice from you guys would be greatly appreciated and if you want to shoot me a PM feel free to, id be willing to get into the initial numbers Xerox offered me on the lease for the 2 X1000's and the B&W and Color click charges.

Thanks everyone!

 

[JustinB]

My initial thoughts:

1) What are you paying per month for printing right now?

2) How are your publications distributed? Mail?
a. If mail, who's going to handle the addressing/sorting/sealing for you?

3) Do you have the space and electricity for these machines?

4) If you're spending your time running your business (and it keeps you busy) then you're not going to have the time necessary to run a million clicks a month. Who's going to run your machines? How much will you pay them per month?

5) Inline or offline trimming/stapling? (Are you figuring in the costs for a paper cutter/folder, etc.)

6) Do you have the software for the variable data aspect of this? (Addressing)

7) Have you figured the additional staffing/electricity costs for bringing this in house?

8) How much money would you have to save in order to justify the HUGE amount of work you're bringing on yourself?

9) Again, if you're busy with your publications, who's going to put the effort into growing your business into another sector?

The time investment you're proposing is MASSIVE. At least 1 if not 2 new employees (There's easily 5k a month, if not more) + presses + cutter + addressing + space + electricity + headache

What's the magic number? Saving $1K, $5K, $20k? What makes it worth your while to jump into a fairly low margin, highly competitive industry?

 

[Possumgal]

Another thing you have to consider is your time limit. Even taking make-ready time into consideration, offset presses usually can blow away a digital machine as far as speed, especially if you print more than one pub at a time. You may not be able to get your larger pubs printed and finished with a digital machine in time.

Digital machines need not only special electricity concerns, but a climate controlled environment. Humidity is a big factor, and the stock needs to be babied, too. If you don't have good central heat and air, they need their own room.

The business card industry is pretty well taken care of as far as digital. Ours has all but disappeared, except for the occasional "emergency" cards. It's all cheaper to send out. You may end up having to be that "storefront print shop" to be able to feed the digital beast. How's the digital competition in your area?

It's definitely something to consider, and do get quotes from more than one vendor. Check front to back registration on different stocks. Color repeatability can be a bear with some digital machines, so take that into consideration.

 

[AP90]

Thanks for the responses guys. I'll start by answering JustinB's questions.

1. I will PM you my current expense in printing if you want it.

2. Nothing goes out through mail.

3. Yes, we do have the electricity capablilities and space for the 2 machines.

4. I am not really that busy with my publishing business. I have office workers who take care of most of the computer work currently. I am on the road about half of the work days a month, but only about half of the day (4-6 hours). So I would be the one who will be running the equipment initially. If need be, I can free myself up even more by not being on the road so much.

5. The cost of paper has already been figured into this. Also, the lease prices include inline stapling and come with an offline trimmer.

6. No, currently I have no software for this but this is because i currently do not deal in variable data.

7. yes.

8. I do not have a set number in mind. I was thinking 4-6K a month would basically sweeten the deal but right now Xerox thinks they can get about 2k a month in savings.

9. I will be the one growing this other sector of the business. We have been publishing for 30+ years so that basically runs itself. I am in succession for taking over in the years to come (family business) and am looking to maximize the business. But I'm looking at this not as a new business, because I don't want to start up a new business right now. I'm looking at this as a way to save money on publishing and be able to do additional publishing at a lower cost to me. Basically, if I do not have the time or its not worth it to do outside printing, then I won't and I will take the profits from saving money on my printing cost.

To Possumgal,
Thank you for your concern on the print time. I was assured by the Xerox reps that having a job done and printed in my time frame will not be a problem. Yes, I do have good central heat and air, so they will be in a well controlled environment.

Can I ask why you do not currently have a lot of business card business? That was one thing we discussed with Xerox reps and we worked the numbers and the capability to compete with the large companies on price for business cards. I understand the margins on them are not high but I'm more into volume than high margins (in most cases). Also, I currently work with a lot of businesses so I already have an "in" with them.

Also, there is not any digital printing in the town where I am located. The town is about 12,000 people. There is a fairly large digital printing company located in a town about 20 miles away. And a small digital printing company in a town about 45 miles away, but those are the only ones in the area.

 

[Puch]

You really have to have a high margin embeded in the final price to beat offset with digital on those relatively high runs. I agree with JustinB, you have to consider ALL your investment against the possible advantages, which are:

- introducing variable/targeted parts into the publications as a value added service,

- streamlining the logistics process (file transmission, prefligting and approval, then physical transfer of products)

- the possibility to offer shorter (or even extremely short) deadlines to your existing customers for additional profit.

 

[Possumgal]

Our business card business has been outsourced for several years, because it's cheaper to send it out than print it here digitally. Once our cost went up after a machine upgrade, there went the business.

 

[JustinB]

More thoughts:
1.1 million impressions per month

2 xerox 1000 machines, so we'll say 175 impressions per minute. (I've never met a machine that could keep it's pace all day every day. They all stop for something.)

That equates to about 25 hour a week of machine time. If you have a machine down, it only goes up.

750,000 Black and white clicks per month x $.01 each (guessing) = $7,500
350,000 color clicks per month x $.04 each (again, guessing) = $14,000

Possible click bill (not including machine or anything else): $21,500

They want to save you $2,000 a month? I just don't see it being worth while.

You yourself aren't horribly busy, so you're getting to enjoy life with some built in time margin in your work schedule. If you do this, you're going to be swamped with work, all to save $2,000 a month.

Double your personal work load in order to potentially take home an additional $2,000 a month, or $24k a year. Is all your margin and flexibility worth $24k to you?

ALL sales reps live in a utopia called "The Demo Room" and they don't have to deal with reality. Sure you can put 24 business cards on a sheet and the economics sound great, but competition is brutal. People tend to view cards as a commodity. As cheap as possible is all that matters.

If you want to take the printing in house, why not look at one of those new Heidelberg offset presses? They claim that after 250 sheets they're competitive with digital.

If your stuff isn't color critical, I wonder if product level inkjet would be an option?



Last thought: If you've never gone, you really need to go to graph expo this year and check out machines from lots of different companies. It's in Chicago from Sept 28 - October 1. Meet some reps, check out machines, ask what's involved and experience the print end of this business.

 

[teddyjack]

in a modern time digital printing is a best solution for grow your business.its a cheap and easy handler.

 

[Possumgal]

Cheap, hardly. If you don't have the business to start with, it's a money sucker. Not to mention how finicky those machines can be.

 

[AP90]

Hey guys, just an update on my impressions on things. What I'm proposing is going to be a huge undertaking, and I understand that. I'm young and have plenty of time to learn and get this done. I'm not going to get into printing unless I'm already going to be making money when I sign a lease. Think of it as my publishing company as a separate company. If I can make money by printing for my publishing company, then it's going to look feasible. My publishing company is already successful and making money. I'm just looking for ways to help it grow.

Secondly, I'm not very impressed initially with any other company than xerox. I know they seem to have a bit of a "wow" factor, but they've seemed very enthusiastic for me. I like that. Konica gave me a call about a week after my inquiry but I've got nothing from them since (a week has passed). Kodak finally gave me a call 2 weeks after I called them. Said they would look into setting up a meeting. HP and canon have yet to give me a call after 2 weeks. I know these are large companies but it reflects badly if you ask me. Just my thoughts so far.

 

[Puch]

Please don't judge the technology and the machines by the response time of the reps in your area. I agree, this can be an indicator how serious they think their business is, but at the end you will deal with the machines and the service personnel, not the reps.

Grab a bunch of your most demanding pages (color & bw), have them printed on all the prospecting companies' demo engines. Take those pages to real-life print operations like copy shops or quick printers. Talk to their operators, ask about their machines, their reliability. If they feel you're really curious, they will tell you the real stories you won't hear from the sales guys. I'm talking about a month of going around, asking, learning, spending some money on prints. You will gain a lot of info which you can filter then boil down to a much better decision.

What I gather is that you're looking for something which is very-very similar to offset, so your clients won't notice the change in the production process. This is another key point to factor in: look for the 'digitalness' of the printouts, watch the unusual shining or bronzing when it gets the light from low angles. Is the toner like melted gum on the paper, or is it a flat surface on the paper? Take a loupe with you (or get the prints to a microscope) and check the quality of the very fine type: are the letters well-defined, or they're ruined and rounded off? Do you see 'satellite' powder around the raster points? How well the screen architecture mimics the rosettes of the offset print? You will see that there are very popular machines, which are simply not up to your expectations after a closer look.

 

[JustPrint!]

AP90, you stated: "To Possumgal,
Thank you for your concern on the print time. I was assured by the Xerox reps that having a job done and printed in my time frame will not be a problem. Yes, I do have good central heat and air, so they will be in a well controlled environment. "

ASSURED BY XEROX????????? c'mon now!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Every single member here will tell you how good these assurances are.

It's not per say they are lying, some are, but rest are clueless. They go to seminars and get their info from sales media. They have no real world experience.

Good luck.

 

[PricelineNegotiator]

We've been running a Xerox 7775, a lesser model of the 550/560 and we haven't had any issues that have shut down our machine in almost 2 months. Sure there are issues with drums and fuser, but I can take care of all those by myself. We put about 100k clicks per month on the machine and it has performed for us amazingly. If you know how to take care of your machine and don't abuse it, it will rarely go down. A note is one of our competitors that runs a Xerox 700 that goes down biweekly it seems. We run about the same volume but it seems like they just run the machine until it stops, no monitoring performance or parts.

Xerox is a top notch company. They put a lot into their machines, and you will get a lot out of them. HP is also a notable company for production presses, but I don't think it's what you're looking for.

 

[JustinB]

We've been running a Xerox 7775, a lesser model of the 550/560 and we haven't had any issues that have shut down our machine in almost 2 months. Sure there are issues with drums and fuser, but I can take care of all those by myself. We put about 100k clicks per month on the machine and it has performed for us amazingly. If you know how to take care of your machine and don't abuse it, it will rarely go down. A note is one of our competitors that runs a Xerox 700 that goes down biweekly it seems. We run about the same volume but it seems like they just run the machine until it stops, no monitoring performance or parts.

Xerox is a top notch company. They put a lot into their machines, and you will get a lot out of them. HP is also a notable company for production presses, but I don't think it's what you're looking for.

You put 100k clicks on your machine each month, and he's talking about 1.1 MILLION a month. Even with two machines, that's still a huge increase over what you're doing!

 

[AP90]

Hey guys, thanks for all your replies. I might not have been clear in my first post. I currently have 1.1 million 8.5x11 pages printed. Since these are all going to be magazines, I can use 11x17 or 12x18 sheets. Depending on how the clicks are calculated that should be 275,000-550,000 clicks a month. Pretty sure one side counts as a click and that perfecting will be 2 clicks, right? I meant to say I'll have 1.1 million impressions a month.

 

[PricelineNegotiator]

You put 100k clicks on your machine each month, and he's talking about 1.1 MILLION a month. Even with two machines, that's still a huge increase over what you're doing!

I think you missed what I was trying to say. We're basically running an office machine in production mode and it is performing greatly. This is because Xerox build quality machines that do what they are intended to do and above. Keeping good care of any machine will make it last longer and give you less downtime.

Comparing my production to his is apples to oranges, honestly. I'm just talking about Xerox's machines as a whole and how they keep up with heavy production.

 

[JustinB]

I think you missed what I was trying to say. We're basically running an office machine in production mode and it is performing greatly. This is because Xerox build quality machines that do what they are intended to do and above. Keeping good care of any machine will make it last longer and give you less downtime.

Comparing my production to his is apples to oranges, honestly. I'm just talking about Xerox's machines as a whole and how they keep up with heavy production.

If that was your point then yes, I missed it. I appreciate the clarification!

1.1 million 8.5 x 11 printed 2 up on 11x17/12x18 duplexed (4 8.5 x 11 images per sheet) = 550,000 impressions. Depending on your manufacturer, they could charge differently for 8.5 x 11 vs 12x18 clicks (my experience is that most don't, but make sure!)

Help us out with some real numbers: Give us your biggest run that you need to produce in a 3-4 day period.

how many page #'s in the book:
Qty of books:
Color or b/w:
full bleed:

Let's start to figure out if this is really doable or if you're going to put in 24 hour days to crank out your biggest job every month.

 

[AP90]

I'll give you my 2 biggest books right now.

Book 1
72 8.5x11 pages
4200 total magazines
Approx 25-30 pages with some type if color. Rest B&W
Yes it's full bleed.

Book 2
68 pages 8.5x11
3500 total magazines
All full color
Yes full bleed.

 

[JustinB]

We'll have to make some assumptions here, but here it goes:

1) Xerox 1000 lists productivity at 50 12x18's per minute, but these machines all slow down for gradations, warm up/cool down, jams, etc. so we'll say 80% of that, so 40 impressions per minute at 12x18
2) You buy two machines and run them simultaneously.


Theoretically, raw print time for each:

Book 1:
36 12x18 impressions X 4200 = 151,200 Impressions / 80 12x18 per minute = 1,890 minutes or 31.5 hours of print time. (Both machines running for 31.5 hours each!)


Book 2:
34 12x18 impressions x 3500 = 119,000 Impressions / 80 12x18 per minute = 1,487.5 minutes or 24.8 hours of print time. (Both machines running for 24.8 hours each!)


I don't know if inline saddle stitching slows down Xerox machines. Others need to chime in.

What machine would you use to three knife trim?

 

[dabob]

Just looking over this thread and noticed something . . . your 72 page book would be 18 sheets folded in 1/2 for a total of 72 pages . . . will your inline stitcher handle that thickness . . . I just asked our 770 operator and he said . . . no way would have to run in two sets to fold and then marry the 2 halves stitch and trim them off line . . . just something to think about . . . my 2 cents is this is a job that digital is not ready for this job . . . .