Paper Markups and Customer Supplied Paper
Printers are confused about what to charge when customers supply paper: 71 percent agreed with the statement, “paper markups are critical to our profitability” but, 50 percent agreed that “when customers supply paper, we don't lose much because we still include a cost for handling the paper, and we charge more for printing: we have to cover our overhead one way or another.” One printer said “We don't mark up the paper cost just to avoid this problem. The paper handling and delivery is included in our general overhead cost.”
Regardless of who buys the paper, you have your investment in plant and equipment, your people, your other overhead. Regardless of who buys the paper, you need to cover these costs. If you have the infrastructure to handle paper buying and handling, that cost is there regardless of who buys the paper. If you buy the paper, you know what you’re getting. If you don’t buy the paper, you may have all kinds of unpleasant surprises. Obviously, you need to pass along the cost of the paper. But beyond that, maybe you should charge more, not less, when customers supply paper. One respondent agreed with this.
If you’re a printer, and you’d like to know more, you can take the survey by clicking here.
Printers who take the survey will be able to get the results for free.
Jack Miller is founder and Principal Consultant at Market-Intell LLC, offering Need to Know™ market intelligence in paper, print and packaging. Previously, he was senior consultant, North America, with Pira International.
Known as the Paper Guru, Jack is the former director of Market Intelligence with Domtar, where he also held positions as regional sales manager, territory sales manager and product manager. He has presented at On Demand, RISI’s Global Outlook, PRIMIR, SustainCom World and at various IntertechPira conferences. Jack has written for Printing Impressions, Canadian Printer, Paper 360, PaperTree Letter and Package Printing, along with publishing a monthly e-newsletter, MarketIntellibits.
He holds a Bachelor of Arts degree in Economics from The College of the Holy Cross and has done graduate studies in Statistics and Finance.