We noticed almost no variation in the pricing between the regions and little variation between companies in different sized markets (rural vs. metropolitan). I do not subscribe to the old argument that “my market is different”. I do however subscribe to the fact that some printers attract more price sensitive customers than other printers.
Where relevant, we showed the survey results by small companies (those that had 2011 annual sales less than $1 million; 51 percent of total respondents) and large companies that make $1 million or more.
My opinion is that pricing should not be dictated by the size of your company. However, our survey clearly showed that larger companies do charge more for their products and services, plus they tend to charge for everything they do. Prime examples are that large companies almost always charge a minimum job set-up fee plus an additional fee for file handling. I believe that larger companies are more comfortable with their pricing and less flexible in waiving charges.
Overall, the pricing seems to be driven by the market and not by the costs. Several participants have attempted to price their digital work by using burden rates, calculating set-up time, time to produce, and adding a waste factor. Most, however, use systems that price digital work based on the number of impressions produced and then add bindery and finishing, similar to the way they have always priced traditional bindery.
In Part Two, which will be published in the May issue of Quick Printing, I will show you how to create a pricing philosophy so you can use the pricing study survey results to increase your profitability. I will also discuss how the results tell you where you need to position your company to grow moving forward.
In closing, I want to thank QP publisher Kelley Holmes and Cygnus Business Media for sponsoring the distribution of the study worksheet. Quick Printing is NAQP’s publishing partner.
The 2012/2013 NAQP Digital & Wide Format Pricing Study can be purchased at members.napl.org/Members/Store.
Mitch Evans is president of Mitch Evans Consulting (www.MyPRINTResource.com/10209474). His areas of expertise are in strategic planning, valuation, mergers and acquisition, financial planning, new technology, and “1-2-1” coaching. Contact him at 561-351-6950 or email@example.com.