Printing Impressions

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President, Print Oasis Print Buyers Conference

Connecting with Print Buyers

By Suzanne Morgan

About Suzanne

Suzanne Morgan is president of the annual Print Oasis Print Buyers Conference (www.printoasis.com) and Print Buyers Online.com, a free educational e-community for print buyers and their print suppliers (www.printbuyersonline.com). PBO has more than 11,000 members who buy $13 billion a year in printing. PBO conducts weekly research on buying trends and teaches organizations how to work more effectively with their print suppliers.

 

Fuel Fiasco Driving Surcharges?

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The cost of fuel is on everyone’s minds these days, and printers’ price quotes are beginning to reflect increased energy costs. Yet some print buyers seem to be in a fog about this issue. I was surprised that more print buyers didn’t respond to a recent Print Buyers Online.com Quick Poll where we asked, “Are your print suppliers adding a clause to their estimates that allows them to add a surcharge for energy and fuel costs?” Only 53 print buyers responded to the survey. Why the lack of interest in such an important topic, especially when we are each touched on both professional and personal levels?

Of those who did participate, only 21% reported that their suppliers are adding a clause to allow a surcharge for energy and fuel costs. Why such a low percentage? We would have expected that more printers would be protecting themselves by adding such a clause. Could it be that printers are adding in higher prices, but just not presenting it as a line item?

One supplier certainly thought so; he commented, “We have met with surprising resistance and complaints about line item surcharges as small as $25 that in some cases don’t even cover the extra cost. It is easier to charge 2-3% more overall than to add a smaller and (hopefully) temporary surcharge. The expectation of ‘free’ delivery is clearly well ingrained in our market.”

Printers like production manager Frank Orlando of Abbot’s Printing, Inc. are taking a more holistic approach. He said, “Our prices already include increases in fuel costs that are charged to us by our suppliers. We custom quote everything we print.”

A print buyer concurred: “Like supply costs, sales commissions, electricity costs and everything else, I assume the cost of getting the finished product to me is included in my quote. That’s part of what’s assumed when you are getting customized pricing.”

Carol Heitlinger, a corporate print buyer for BlueCross BlueShield of South Carolina, said in her experience, it all comes down to volume. “Some envelope manufacturers are levying surcharges for less than a full truckload. Some are charging a surcharge for amounts under a certain dollar figure.” Interestingly, she went on to say that she was not being charged extra by her regional printers due to the fact that most of their deliveries are local.

Perhaps what’s new today is printers are being more diligent in enforcing expiration dates on the price quotes that they give. “I find that as the cost of raw materials shift, the estimate provided may not be good for beyond 30-60 days,” shared one print buyer. “In the past, printers have held their estimates have held for much longer than that.”

Could the increase in fuel costs push buying companies into different channels of marketing? As one print buyer contributed, “All these changes in pricing make budgeting and planning on a per-job basis very difficult, especially for a non-profit. Where we used to print a variety of documents, our Marketing Department is putting more information on the website and in our blogs. The combination of increased pricing for ink, paper and shipping is driving more and more print pieces to our website. This is good for our bottom line as it provides more funding for our programs — but this is not so good for our printers.”

As a print supplier, what are your thoughts on this timely subject — and how are you compensating for the increase in energy costs? How are you communicating about this with your customers? Please add to the discussion by posting a Comment below.

Industry Centers:

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COMMENTS

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Most Recent Comments:
Michael Lennon - Posted on July 18, 2008
Fuel costs are impacting everyone and as we receive notices from our suppliers of increases we are adjusting our estimating programs accordingly. Every consumer is aware of the current economic conditions and we are meeting little resistance with modest price increases, while being ever mindful to continue to keep our prices as competitive as we can. We're all in the same boat so I would say our competition is doing the same and as a result the playing field has remained level.

As far as our fuel costs, we build in minimal fees for smaller deliveries and keep those fees down by planning our delivery van routes effeciently. On the larger jobs requiring multiple skid deliveries with our larger diesel truck we simply calculate by the mile, which is done in our original estimating. Most customers expect delivery to be included, and more often than not the RFQ's state that.
WW - Posted on July 18, 2008
Nationwide (worldwide?) printers have no choice but to raise prices -- a dilemma indeed. Will this lead to further reduction of print orders? Only time will tell-- however, attempt to absorb too many cost increases and your operation will not be around long enough to find out firsthand!
Susie - Posted on July 18, 2008
We have been adding delivery charges outside our immediate area for more than a year. We clearly discuss price changes with clients as they relate to material increases driven by fuel increases. We believe in informing our clientele rather than avoiding the issue.
Click here to view archived comments...
Archived Comments:
Michael Lennon - Posted on July 18, 2008
Fuel costs are impacting everyone and as we receive notices from our suppliers of increases we are adjusting our estimating programs accordingly. Every consumer is aware of the current economic conditions and we are meeting little resistance with modest price increases, while being ever mindful to continue to keep our prices as competitive as we can. We're all in the same boat so I would say our competition is doing the same and as a result the playing field has remained level.

As far as our fuel costs, we build in minimal fees for smaller deliveries and keep those fees down by planning our delivery van routes effeciently. On the larger jobs requiring multiple skid deliveries with our larger diesel truck we simply calculate by the mile, which is done in our original estimating. Most customers expect delivery to be included, and more often than not the RFQ's state that.
WW - Posted on July 18, 2008
Nationwide (worldwide?) printers have no choice but to raise prices -- a dilemma indeed. Will this lead to further reduction of print orders? Only time will tell-- however, attempt to absorb too many cost increases and your operation will not be around long enough to find out firsthand!
Susie - Posted on July 18, 2008
We have been adding delivery charges outside our immediate area for more than a year. We clearly discuss price changes with clients as they relate to material increases driven by fuel increases. We believe in informing our clientele rather than avoiding the issue.