Well, the good news is that the 2011-2012 Quick Printing Industry Pricing Study has been published and is now available for sale. Approximately 350 companies participated in this year’s biennial survey and consequently received a free PDF of the study in mid-April.
The bad news is that it may be a long time before we see this type of study published again, if ever. Why? It’s a long story, and the reasons are varied. None of it is very good news, so I have put off discussing this subject to the latter half of my column.
Now, back to the good news. What follows is one of the many incidents that happen to me during the course of any single week or month. Some of them are good enough that they end up working their way into one of my columns. This is one of them.
As the deadline for the for the 2011-2012 Pricing Survey approached, I started receiving panic calls and emails from printers asking for an extension of another day or two. Yeah, I gave in to some. What could I do? One printer, so worried that his survey data had been lost in transmission (it wasn’t), faxed me his seven-page survey along with a cover sheet. Hand written on the cover sheet was the following message:
“Dear John, I mailed the electronic survey at 4:30 PST. But just in case you didn’t receive it I am faxing a copy also. I hope I will receive a copy of your survey. As I can’t seem to put any money aside. We barely pay the bills. I feel we are doing something wrong. Might be our pricing. Thanks”
Seat of the Pants Management
As I glanced at the material he had sent, two or three items jumped out immediately. First, the cover sheet failed to provide either an email address or a website—maybe that was an oversight, or a maybe a hint of lax marketing and other problems to come.
Based on the information he provided, this guy is an old-timer who has been in the business more than 35 years. The name of his company is clearly outdated, but that’s a topic for another day. I also strongly suspect that he has been running the business by the seat of his pants for years; never once attempting to compare his financial ratios against others in the industry, in the hopes of discovering what might be wrong. For many years, I suspect, it was luck that got him by. These days, it is going to take a lot more than luck or a few loyal customers.
As I quickly examined entries on his survey, one thing jumped out, and it wasn’t his pricing. The prices he listed were well within the “High/Low” limits provided in the Pricing Study. The one thing that was clearly out of range and provided a clear explanation for some of the difficulty in paying his bills was the fact that his sales per employee for 2010 was $73,000. You can’t expect to pay your bills or even pay yourself a reasonable salary with an SPE that low! It apparently took five individuals, including the owner, to produce $365,000 in sales last year.
OK, this is a rant…I can’t hold it back anymore. Put simply, that SPE is terrible, atrocious, and totally unacceptable. Quite honestly, I would have a similar reaction even if the total number of employees dropped from five to four. It would still be terrible. Note that there’s nothing inherently wrong with running a firm with relatively low sales in the $300,000-$450,000 range. What is wrong is when you use too many people to produce those sales! Enough ranting.
The 2011-2012 Pricing Study
Although you are reading this column in early May, I am writing it on April 1. Also sitting in front of me is a 140-page PDF of the final 2011-2012 Quick Printing Industry Pricing Study. I am actually ahead of the game at this point—I initially promised that the study would be available by May 1. If you want to confirm whether your company name is on the “free” distribution list, go to: www.quickconsultant.com where I have published the list.
The ratios and pricing data provided in this year’s study are probably the most accurate and the most detailed we have ever produced. Some of you probably read my April column where I offered up some preliminary findings. Now we have some of the final numbers to report.
OVERVIEW - PRICING STUDY PARTICIPANTS
Ratio Average Median
2010 sales $1,032,632 $685,000
Projected 2011 sales $1,105,561 $744,600
Projected Growth 2010
to 2011 7.1% 8.7%
Sales per Employee $123,501 $118,606
Sales per DTP Employee $78,910 $66,835
Sales per Press Operator $237,219 $213,140
Age of owner 55 56
Company founded 1982 1983
These key ratios represent not only those of our survey participants, but we also report, with a high degree of certainty, that these ratios are representative of the entire industry (+/- 6%), and not just our group of respondents.
What About Prices and Trends?
This year’s survey presents an immense amount of pricing data. We go the extra mile to make sure we present pricing information in a variety of formats most often requested by former participants. In most cases, prices are provided for five different quantities, including a High/Low range for each.
The High/Low Price range represents a range within which approximately 51% of all prices fell. The range (as a percent of the average) varies from product to product, and is presented as a general guideline. I feel that any prices falling outside of this range are most likely the result of errors, incorrect assumptions, or improper hourly rates being applied.
Below is a sample of our “All” pricing, along with the High/Low range:
DTP (Graphics) Hourly Charge
Average High/Low Range
File Handling Fee $17.45 $12.80-$22.10
12x18 CTP Poly Plate $16.38 $12.79-$19.96
500 Color, 8x11, 1-S,
100# Text $213 $181-$245
500 ea. Bus. Cards, 4/0,
1 Name $72.90 $55-$90
1M, #10/24 White Wove
Envelope $107 $93-$121
1M, 3-Part Carbonless,
8x11 $278 $247-$309
1M, 1-S, 2-C
Letterhead, 24# $221 $198-$244
The full study offers pricing for more than 65 different items or services, and offers more than 1,000 distinct pricing breakouts based upon size of firm, quantities, and our High/Low range. To view the study’s table of contents, check the participant list, view some sample graphs, or to order the study, go to my website at: www.quickconsultant.com.
The Future of Research Studies
The size of the quick printing segment of the industry was estimated to be 30,000-35,000 in the early 1990s. Today, the industry is much smaller. I estimate the size of the industry is closer to 15,000-20,000, but that is based on more of a gut feel than on hard data.
In the late 1980s, NAQP claimed more than 4,000 members. Today, the association is 75% smaller with fewer than 1,000 members. Other trade associations have suffered similar fates.
What does this mean for the future of research studies? What does the future hold for the operating ratio studies, bindery studies, and wage & benefit studies that I have published in conjunction with NAQP/NAPL for the past 25 years? I truly do not know, nor am I very encouraged.
In the past, trade associations used to carry the burden, if not responsibility for conducting industry research. Because of shrinking membership and smaller budgets, associations have to reexamine every expense item, and research projects do not get a “pass.”
Many association executives argue that future research studies should either pay for themselves or attract enough industry sponsors so that they at least break even. I can’t argue against that premise, but I can predict what will happen if it comes to pass—research studies as we know them will cease to be published.
Research is Expensive
Despite the fact that virtually all the research studies conducted by NAQP have continued to improve and attract good to excellent participation rates, none of the studies have ever sold enough to recover their costs, let alone produce a small profit.
For example, this year’s pricing study attracted approximately 350 qualified participants. Each participant received a free PDF copy of the study. We expect to sell 200-250 copies in the next 12 months. That’s a maximum of 600 pricing studies distributed in an industry of about 20,000. And remember, half of those copies are distributed free.
The sad fact is that most people in this industry have never seen or read any of these studies, so it’s not as if they have suddenly become unpopular. Once someone has seen or purchased a study, they become a great spokesman. In 25 years of publishing these studies, we’ve garnered hundreds of great testimonials. These studies deliver way more than they promise, and yet for some reason they have never been popular enough to produce even modest profits.
This year’s pricing study was published solely by my company Q.P. Consulting, Inc. We received financial support from three sponsors—NAPL, Printer’s Plan, and printLEADER. While we greatly appreciate their financial support, it is no where near enough to justify the costs of producing these studies, let alone the risks involved, no matter who publishes them.
Ironically, if these studies cease to be published, the folks who will suffer the most are those who spend the hours necessary to complete these surveys and submit them by the deadline. These are the true heroes since they contribute far more than they receive in return. Most others will never know what they have lost, since most have never seen these studies.
I seriously question whether we will ever see another operating ratio survey published for this segment of the industry. The simple reason for the pessimistic forecast is that as incredibly valuable as these studies are, there are simply not enough firms willing to purchase them. Some have suggested that participants should actually be charged for participating. But other trade associations have tried that approach and the results have been nothing short of disastrous.
Could corporate sponsors help pick up the tab for these types of studies in the future? Yes, but sponsorships can’t be sold on the basis of the number of participants or copies to be sold or distributed—the numbers are simply not there. Nor can they be justified for other than purely altruistic motives. And most corporations can’t afford to be very altruistic these days.
I’ve always believed that fundamental research is a core responsibility of every trade association, but I am also realistic enough to know that times have changed. Industries are smaller and trade associations are facing greater challenges than ever.
Unfortunately, my belief in the value of studies upon which NAQP built its core reputation for more than 20 years is not enough on its own to ensure their future. Here’s hoping. We shall see. As always, your feedback is welcome.
Senior contributing columnist John Stewart is president of Q.P. Consulting Inc. Contact him at 2110 S. Dairy Road, West Melbourne, FL 32904, call 321-727-2444, email email@example.com. Be sure to check out John’s blog on his website at www.quickconsultant.com where you can also order a copy of the 2011-2012 Quick Printing Industry Pricing Study.