Catalog Cost Cutting ’08, Part 1
7. Buy your own paper.
If you purchase more than 80,000 pounds of paper at a time — about two truckloads, or the equivalent of printing approximately 300,000 64-page catalogs with a trim size of 8˝ x 10.5˝ on 40-lb paper — consider buying your own paper from a well-known, respected merchant. Paper and freight are two profit centers for printers, and they’re both areas that catalog companies understand the least.
Reasonable savings expectations of purchasing your own paper range from 4 percent to 6 percent or more. Typically, a print run underconsumes paper in the range of 2 percent to 3 percent, which goes back to your inventory if you purchased the paper. But if the printer purchases the paper, that overage is put back into the printer’s own inventory to be sold again to another cataloger.
If you’re not buying a substantial tonnage of paper — 500,000 pounds or more at a time — you may not have the leverage that your printer does with the mill. Informing your printer that you’re considering buying paper from a merchant, however, often results in savings without you changing a thing. This can spark lower paper consumption requirements and a lower cost per hundred weight (cwt).
8. Get your printer to waive handling fees.
Make sure your printer won’t charge you a handling fee if you supply your own paper. Some printers do; others don’t. A handling fee of 50 cents cwt can add up to thousands of dollars annually. But these fees are open to negotiation, and most printers will waive this charge. I know of two catalog printers who don’t charge such handling fees.
9. Don’t accept price caps.
If a paper merchant offers you a price cap on paper, don’t accept it. The cap is generally set high so the merchant is price-protected. This makes it an expensive insurance policy for the cataloger. It’s neither practical nor necessary.