Pricing issues in today's printing market
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At present, the serious consequences of the economic crisis have become increasingly apparent, and the biggest impact on the printing industry is pricing pressure. This pressure comes from your customers first, because they all want to buy cheaper products; secondly, your competitors, they will cut the price of the product to your cost in order to win the order.
Although this round of economic crisis is coming to an end, I am not sure that when the economy begins to recover, the printing price will definitely rise. So how do we deal with this falling market price?
Below, I will give you some suggestions, I hope to help you alleviate some price pressure:
First, close to your big customers. If you have a good personal relationship with a client, then he will not simply leave you because of a lower price. In most cases, the low price of the product naturally has its low reason. Your competitors may find lower cost production methods, such as changing paper specifications, reducing print quality, mass production, or changing the way printing is done (for example, from digital printing to offset printing, or from offset to digital printing).
If they do find a way to produce the same product at a lower cost, they have the ability to make a big fuss about the price. If you know your price level, then this article is good, but sometimes you need to do more homework. All in all, knowing your break-even point is critical when making price decisions.
Second, before customers find other people to help them save costs, you must first find a cost-saving method for them. It is a good idea to invite your top customers to discuss the savings in printing costs and mailing costs. Most customers may be happy to make appointments, and will be surprised by the cost savings approach you have proposed. In addition, they may also show you some jobs printed at other printing houses and tell you the printing costs of these jobs. I'm sure you can find ways to reduce their printing costs by about 10%, and in most cases, the approach you take is not to lower your price, but to adjust customer orders (such as merging jobs, increasing Print quantity, replace product, cut mailing costs by pre-ordering or using barcodes, etc.).
Only by reducing costs can you lower the selling price. You can transfer some of the pressure to your suppliers to get more affordable paper and printing supplies. In addition, you can buy these products regularly and update your equipment. In general, new equipment has lower click or service costs, faster production speeds, greater capacity, less labor, and lower consumable usage.
Third, attract new customers by lowering the price of certain specific jobs. I am not saying that the printing house is going to do the loss-making business, but they can completely win the battle by giving up one or two strongholds. Some customers are sensitive to the price of certain items (color copying or high-volume black and white copying) or products (business cards). Large network printers like VistaPrint also mentioned that they would abandon their business card business (as long as customers pay for shipping, they can print for free) in exchange for sales growth of other products.
Fourth, understand your breakeven point and job costs. I hope that the managers of the company can understand their break-even point. In other words, you have to know how much your monthly sales will reach when you can make money? I am not going to teach you how to calculate this critical sales in this article, but there is a simpler way to look at your profit and loss statements over the past 12 months and find that the profit or loss is close to the breakeven point. The sales for those months were seen as the target sales at the break-even point.
In addition, you need to understand your own internal production costs. For services that must maintain a fixed price, you must accurately calculate their material costs (paper, ink, plates, toner and click charges, etc.) and labor costs (do not calculate the burden rate or equipment cost). By adding the material and labor costs, you can know the cost of cash for this job. If the customer wants to print these jobs in the month that your sales will definitely exceed the break-even point, you can further lower their prices.
For example, a customer says they can buy (or can only buy) a marketing manual for $1,000, and your price for this product is $1,450. Then you can calculate the cost of cash for this product. If it is $750, you can sell it to the customer at $1,000 in exchange for long-term cooperation between you. However, don't try this when your sales don't reach your target.
Fifth, reduce the commission. If you want to pay commissions to your sales staff, you have to reduce the commission for the job. This is not a reasonable approach. Why not let your sales staff participate in the cost-saving process? Especially for those subcontracted orders, the salesperson should give up part of the commission. I have always advised the printing company to pay the commission of the salesperson based on his own markup rate for the job.
Sixth, Look for customers who are less sensitive to price. We have all received such customers, they just want to get faster service or spend other people's money. You can review your client list carefully, find customers who don't care about the price, find out what industry they are in, and work hard to find some of these customers in future marketing efforts. I have seen that many print sellers always look for customers who care about the printing price, or go to the purchasing department of the client company. In fact, they should not do this, but should focus on marketing, Human resources or finance and other departments.
Finally, what I want to say is that even if the recession is over, the price pressure on our shoulders will not be alleviated. You must continue to find ways to set reasonable prices.