3 Ways to Cut Labor Costs to Stay Competitive with National Printing Companies
Three years ago, my company faced a turning point. The writing was on the wall: If we didn’t find a way to streamline our processes and cut down on labor costs, we were going to lose many of our loyal customers to national printing companies.
At the time, we were getting calls from loyal customers saying they couldn’t afford to work with us anymore because they could get a lot of their marketing products much cheaper than our prices. We found that “much cheaper” was different for each customer. When we really put a pencil to it we found that we had started losing out on projects ranging from $50 to $200.
Back then, our first instinct was to walk away, because they wanted us to match prices that were impossible for us to make money on.
But we made an important decision: We were going to find a way to make money on simple commodity orders, even ones worth as little as $50.
Of course, the raw materials costs for an order of business cards or basic flyers leave plenty of room for profit, but the labor costs will kill your margins if you’re not careful. So we had to find a way to cut out the unnecessary human touches.
To do that, we did three things.
First, we introduced automation into our workflow by investing in a Web-to-print system. Now customers who want to order basic business cards can do so right from our website. They can upload their design, get an instant quote and submit their request all without talking to a sales person. This saves the customer time and saves us from devoting the time of a highly trained sales representative to a very simple project.
Second, we required payment up-front, which saved us from having to send each order to our accounting department for invoicing.
And third, we changed our inventory practices. We started keeping larger supplies of our most-popular stocks of paper in our warehouse so that we could turn around commodity orders like this quickly, without worrying about delivery times or order minimums from our paper supplier.
To stay alive as a small printer, you have to prove that you are competitive with big national printers. That doesn’t mean you have to beat their prices, it just means keeping your prices close enough that those customers who care about buying locally can still afford to work with you.
Ultimately, you have to figure out how to make money on small projects, and that’s exactly what we did.
About the Author
Chris Yuhasz founded POV Solution as a basement desktop publishing business 27 years ago in Chagrin Falls, Ohio. POV solutions provides printing services from Cleveland, Ohio, servicing clients coast-to-coast with commercial printing, graphic design and spot UV printing for finishing services.
Chris Yuhasz founded POV Solution as a basement desktop publishing business 27 years ago in Chagrin Falls, Ohio. POV Solution provides printing services from Cleveland, Ohio, servicing clients coast-to-coast with commercial printing, graphic design and spot UV printing for finishing services.