Print-Plus: What Cross-Channel Retailers Need to Know When Getting Print Bids
I've learned a great deal over the years about obtaining print/paper bids. It's not a simple process. For example, if you base your printer selection on print manufacturing and paper costs only, you could be coming to the wrong conclusion. This column focuses on what's really driving costs and other factors you might not be considering when obtaining print bids.
Make certain you're obtaining bids from catalog printers. Who are catalog printers? They're printers that not only understand the distribution of catalogs but are able to co-mail. Even if a printer that's really not a catalog printer is competitive when it comes to print manufacturing and paper, its ability to obtain maximum postal savings is limited.
Understanding what comprises direct selling expenses is critical to understanding why you should only be dealing with catalog printers. Here's a typical breakdown of catalog print, paper and distribution costs (i.e., direct selling expenses for a total of 100 percent):
- printing and ink (20 percent);
- paper (30 percent);
- postage (45 percent);
- prospect lists (3 percent); and
- service bureau fees (2 percent).
Only 20 percent (approximately) of the total cost to print and mail a catalog is print manufacturing, 30 percent is paper and postage represents almost half the total cost. Therefore, a printer's ability to co-mail for maximum postal discounts is critical to the net amount you pay for postage. Prospect lists and merge/purge work (service bureau) represent approximately 5 percent of the total cost combined.
The printers you're obtaining bids from need to include a "net" postage estimate, including all fees. Looking at print manufacturing and paper prices only isn't enough. It falls short of the total amount you pay to print and mail catalogs. After all co-mail fees, the net savings should range from three cents to six cents per catalog. There's a fairly wide range of savings due to the quantity mailed. Some printers charge a flat per thousand amount for in-line co-mail services and a percentage of the savings for offline mailers. Also, some printers charge a per hundred weight fee for drop-ship separate from co-mail. Other printers often charge co-mail administrative fees or freight charges to get the catalogs to their co-mail facility. This can generate fuel surcharges and lengthen lead times.