Mañana Man's Mailbag —DeWese
What I cannot accept is the massive difference in price. When this industry as a whole spends so much time and energy to produce any job, why do we give it away? What is the fear that we face? In speaking to several different people I realized that we are one of the few industries that drop everything for that sake of the client, but are never rewarded. One of my favorite comments is, "Have you ever seen a cheap lawyer?" No matter how bad they are, they are still $200/hr.
I would like to thank you in advance for you time and to let you know how much I respect your words.
Martin Saavedra Jr.
*** Dear Martin,
Intense price competition spans most of the printing segments. It is especially intense in your general commercial sheetfed printing segment. It is driven first by excess capacity chasing too little demand for the existing capacity. When supply exceeds demand, then prices go down.
Next, the industry pricing problem is exacerbated by the poor management practices found in many companies, large and small. Many owners of undercapitalized companies are starved for working capital. They either don't know or ignore their costs and bid down a job without attempting to gain any sense of the "market price." This happens because they are frantic to generate cash to keep the doors open.
The print buyers, on the other hand, have gained all the power in this excess-capacity market and have come to view printing as a commodity where they can demand price, quality and service from your competitors.
I was impressed with the insight of your letter. It sound like you, your father and your co-workers are survivors and will be around when supply inevitably equals or exceeds demand.