Curbing Price Quote Chaos —Morgan
The inherent problem with this method is that buyers begin to believe that suppliers are taking this cut out of their profit. Which brings us to...
Profit Misconception: In January, we asked major print buyers, “How much net profit do you believe the average printing company makes?” Almost 80 percent of the polled respondents said they believe printers are making more than a 7 percent net profit.
Because print buyers assume printers are achieving much higher profit margins, they may take for granted that there is room for negotiation because it will just come out of the printer’s profit. This, in turn, generates the belief that the most important thing to a buyer is price.
It’s in the Details: Print buyers are generally very good about capturing the specifications for a print job (i.e., finished size, ink specifications, etc.), but rarely include the overall goals or expectations for the print projects (i.e., how the project will be used, the expected ROI on the piece, quality expectations, etc.). Buyers’ bid sheets are generally flawed because the overall expectations aren’t communicated.
As you are well aware, the more sparse the specs, the more room for interpretation. Each printer is likely to interpret the specs in entirely different ways, which will result in a larger variance between quotes.
It’s Not Yet Live: We’ve learned that 38 percent of buyers ask for a quote before a print job is even “live.” Buyers often need to get a ballpark price on projects that are being considered, but aren’t yet real.
Getting price quotes at this stage is important for a myriad of reasons. For instance, it allows advertising agencies to pitch proposed projects. It can help a corporate buyer to create budgets for marketing dollars.
As one print buyer stated, “We call it ‘menu pricing’ and use it with our major print vendors for on- going pieces such as letterhead, product inserts and envelopes.” Another said, “Often, on the first round of bidding, we are working from concepts and not the defined finished artwork. But the client is asking for print costs, so this is when I try to add everything but the ‘kitchen sink.’ ”