Mailings markup...

[kdw75]

We have been successful doing smaller VD mailings, but seem to regularly lose larger mailings of 15K plus to other local print shops. Several regular customers have been kind enough to share the price the other printer quoted them. On a recent job that was 35K 6x9 VD cards, the other printer only charged .02 cents to do the sorting, traying and mailing. We had charged .035, which seemed reasonable to us.

I guess, like everything else, the prices have been cut down to where there just isn't much profit.

We have several customers that give us all their work, except for larger mailings. I am not sure if it is better to have less work, or be busy without making much if any profit.

 

[Digital Press Guy]

The National Print Owners Association (NPOA) is currently preparing their Mailing Services Pricing Study. It will be available in January.

You need not be a member to participate and become eligible for a free copy once it is completed. While this does not address your post today it should be helpful going forward.

You can learn more about the study at, http://www.printowners.org/blog-latest-news

 

[kdw75]

I appreciate that. Pricing is always a challenge.

 

[davarino]

We have several customers that give us all their work, except for larger mailings. I am not sure if it is better to have less work, or be busy without making much if any profit.

As a friend of mine is fond of saying, "More is better". Find a way to make it more profitable... I know it sounds simplistic, but these are the choices you have.

You might wish to bear in mind that additional work costs essentially only wear-and-tear, labor, supplies, and utilities. You don't have rent and capital to worry about. And you can gain economies of scale (less delivery time per drop, etc.)

I'd say that's a strong argument to go out and take ALL that work from your competition.

Many people, frankly, would rather gather the easy 30% rather than the easy 30% AND the mentally straining 70%. But then again, that's how fortunes are made and lost.

 

[kdw75]

As a friend of mine is fond of saying, "More is better". Find a way to make it more profitable... I know it sounds simplistic, but these are the choices you have.

You might wish to bear in mind that additional work costs essentially only wear-and-tear, labor, supplies, and utilities. You don't have rent and capital to worry about. And you can gain economies of scale (less delivery time per drop, etc.)

I'd say that's a strong argument to go out and take ALL that work from your competition.

Many people, frankly, would rather gather the easy 30% rather than the easy 30% AND the mentally straining 70%. But then again, that's how fortunes are made and lost.

It is a struggle to compete with the other company because they have almost unlimited resources, and have in the past, lost millions before anyone from their parent corporation took notice. Their primary job is doing work for their parent company, and walk in customers are just there to fill the gaps. After they were found out to be losing money, they fired all the managers. Now they have people in there have upped their pricing, but they still advertise that they will beat any other local printers price. The customers we have are the ones who demand better quality and better customer service.

We have always tried to sell value added features, but most people only care about cost. Nothing extra, just a cheap price.

Geez, I sound like a defeatist. lol

 

[davarino]

It's always hard to succeed in this business.

Ya always have to find a smarter way to get things done and make it more profitable. Sometimes you have to take things at very low margins. Sometimes you can find a way to gang a couple jobs. Often it's smarter to job out than to produce in-house.

Don't do things because that's what has succeeded in the past... do them because you are reasonably sure that they will contribute to the overall value of your business. And fearlessly abandon anything that drags on your business without the promise of a better return on your investment of time, energy, or money.

Approach every estimate and job as if it were the pivotal piece of your business's future... because it will be.

All truisms. But all true. As a small printer, you can kick the crap out of bigger, better financed shops with your service and scheduling. Recognize your strengths and build on them.

 

[davarino]

I thought about your situation last night and I remembered something that another shop did once upon a time... which means that you should at least put it in your play book.

They priced mailing really low, because they absorbed part of the cost in their printing costs. In fact, they would often offer mailing as a free add on to get the job. And they succeeded at this.

If you think of the costs of mailing, you are saving packaging materials and certain other expenses that you must absorb as overhead on delivery or pick-up jobs.

Not a lot is saved, but when you start looking you might see ways that your costs are lower, which will lead you to cut your bottom line price and, most importantly, get the job.

Just remember that beautiful, seemingly absurd, quote from Henry Ford's Autobiography:

We have never considered any costs as fixed. We first reduce the price to the point where we believe more sales will result. Then we go ahead and try to make the prices. We do not bother about the costs. The new price forces the costs down.​

Think about pricing differently and you can often whup the competition.