Industry Issues -- Can Costs Be Passed On?
By Erik Cagle
Are you, the commercial printer, feeling the pressure of increased costs? If not, you soon will; this winter, in fact.
The curious, but frustrating, amalgamation of upward cost pressures have left printers in a catch-22 position. Pass on your cost increases to customers and risk losing volume (or worse, their entire business). But if you choose to swallow that pill, it's going to hurt all the way down your throat.
Isn't it fair that paper vendors and ink manufacturers get to pass on costs to you because of the late summer fuel price explosion? But why should printers have to eat those price increases with their clientele? Or any cost increases?
The issues that most affect commercial printers are clearly those that impact their bottom lines. But some of the increases in costs have YET to be felt by printers. The increasing cost of mailing? That happens next month. And those high energy bills won't be seen until the January or February statement.
But try tacking on cost increases in an age of commodity pricing. Would those ad agencies really leave you high and dry, with the threat of alternative (read: cheaper) outlets for marketing goods and services looming? Does anyone have the courage, or capacity alternatives, to find out?
Instead of playing 20 questions, we have a list of several high-priority issues that printers need to monitor closely as we usher in 2006. None are jaw-dropping revelations, but perhaps some can provide perspective as you attack the most relevant concerns facing your businesses.
Postal Reform: OK, we heard a few groans in the back of the room. This issue has been visited with alarming regularity as the printing industry closely monitors what will become of the U.S. Postal Service (USPS) as it continually grapples with a business plan that is older than Watergate.