NPRC Releases Signs & Wide Format Pricing Study

New 2018 Signs & Wide Format Pricing Study

The 2018-2019 Signs & Wide Format Pricing Study,  NPRC’s newest research study, is now available for immediate shipment.  

You can order this new study by visiting NPRC’s Bookstore at http://printingresearch.org/products-page/ All orders are typically processed and mailed same day as received. 

Covering dozens of products & services – This new, 110+ page study explores pricing practices for dozens of the most common products and services in the signs and wide format industry. Click here or the artwork below to view and download two sample pricing pages. 

Click below to view
Table of contents 

OWNERS PRAISE NEW SIGN
PRICING STUDY PUBLISHED BY NPRC

 “After reviewing the latest Sign & Wide Format study I realized I’d been leaving money ‘sitting on the table’ on some products. Literally within minutes of receiving the study, I was able to confidently revise a quote for a customer, knowing the price would still be fair yet competitive. The resulting revenue increase nearly covered the cost of the study—and that’s just one project! Thank you for all of your hard work.”

James Jepsen, General Manager
Local Copies Etc. Santa Maria CA 


“The work that John and his team do is so great for our industry and I would hope more companies invest the time in taking part in the survey every year. We all rise up together and this work is a great step for all of us! Our company is only 4 years old so this information is invaluable.”

Zeno Signs & Chesterton Printing Co.
Chesterton, IN


“Hi John. Got the study, printed it, and now using it. Every time we get a survey from you we spend a good deal of time reviewing our pricing. I know we should do this more often but your surveys are the ‘kick in the butt’ that we need to make sure we are getting the best return on our work. I have been doing these surveys for more than 20 years. While I own other businesses, there is nothing in those industries to compare with the surveys you produce. Thanks.”

Jon Robson
Auburn Document Centre, Auburn, NY

What about those who participated in the survey? Firms that participated in the original survey received an email and a PDF of the 2018 Signs & Wide Format Pricing Study on Tuesday, Sept. 11th.  If you participated in this survey you are urged to carefully check your email for Sept. 11-12th for an email with a SUBJECT LINE: “Urgent, your Signs & Wide Format Pricing Study is attached.”  

NPRC makes every effort to process and send copies of its studies on a timely basis to all those who participate, but participants have a responsibility to promptly open and download the attached PDFs. In most cases, folks who call us and complain that they never received their copy typically end up finding it in their spam or trash folders. Please check all of your folders before emailing us about a missing copy. 

This information packed study offers average and median pricing for dozens of products and services offered in the sign industry, including the following: 

  • Laminating Services
  • Substrate Pricing Retail and Discounted)
  • 3′ x 6′ and 4′ x 8′ Banners
  • Vertical Banners & Stands
  • Feather Flags
  • 4MM Coroplast Yard Signs (1-S & 2-S)
  • ACM Panel Pricing (18″ x 24″ and 24′ x 36′)
  • Magnetic Signs
  • Decals – square and contour cut
  • Vehicle Decals
  • Flat Surface Vehicle Wraps
  • Window Perfs
  • Basic Pricing Charges for Vinyl Signs

The study is available in both PDF and Hard-Copy formats.

 

Selling “Partner” Increases Business Value!

The Endowment Principle
And Valuing Your Business

By John C. Stewart, Executive Director, NPRC

“The endowment principle suggests that an owner of an object tends to attribute a higher value to that object because he owns it. Consequently, the owner of a business may think that the business has a higher value than it actually does, merely because he or she started it, nurtured it, etc. You should take this into account if your valuation falls far below the owner’s asking price.” (From Print Shop for Sale, Chapter 1)

I would love to have $10 for every time I have heard an owner tell me that they would rather shut the doors, close the business and walk away before they would accept an offer they consider too low. It is amazing how many owners simply point to the many years they have worked building the business, the sacrifices they have made, and the “blood sweat and tears” they have invested to build their businesses to justify the value they have placed on their business.

Tell owners that they have made a major mistake loading up their small businesses with equipment that really isn’t need, or tell them that after all is said and done they have earned a decent salary over the years but they really haven’t generated any significant “excess earnings” and as a result their business is worth very, very little.

Sadly, many owners wait too late to sit down and attempt to value their business. To be blunt, some put this task off because they suspect the value will not be what they were dreaming of or counting on a few years ago. Other owners simply have little or no idea as to how to arrive at a value for their business, and they are unwilling to take the five or six hours it might take to get a better grasp on valuing a business.

Some make a half-hearted attempt by using some outdated multiplier, while others rely on advice offered by a well-meaning uncle or business broker, most of whom know little about valuations in the printing industry.

Valuations Based Upon Earnings

Most important of all, many of these owners simply do not understand the basic valuation principle that notes that, “for a business to have any real value to a potential buyer, it must be able to produce enough cash flow to pay the new owner a reasonable working salary and then produce enough ‘excess earnings’ for the buyer to be able to purchase the business from the seller over a 4-6 year period of time.”

“For a business to have any real value to a potential buyer, it must be able to produce enough cash flow to pay the new owner a reasonable working salary and then produce enough ‘excess earnings’ for the buyer to be able to purchase the business from the seller over a 4-6 year period of time.”

The biggest mistake made by many owners contemplating the sale of their business is to initially combine the salary and perks paid to both the husband and wife and look at that combined total as the “profit” generated by the business. Once combined, the owners then use some type of multiplier, add a value for assets, and arrive at a final selling price for the business. Oh, if were only that simple!

Let’s clear up something immediately. Combining your salary and perks with whatever is paid to your spouse and then claiming that represents the “net profit” or “net earnings” of the business is simply wrong, wrong, wrong!

Only If You Are Selling Your Spouse

Of course, the only exception to the discussion above would be in the event that you are actually including your spouse (husband or wife) along with the list of other assets that will convey when you sell the business. I know at least some readers are whispering to themselves,“Oh, if I could only do that I would…”

“Ok Mr. Stevens (the new buyer), here is the final paper work for the sale of the business, and you will notice that it includes a Ricoh digital printer, a state-of-the-art estimating system, a Heidelberg folder, padding rack, a Sakuri 40” cutter and my wife. She will stay on with the business until you decide to trade her in or sell her to another print shop.”

The point in the sarcasm noted above is that when a husband and wife sell their business to an individual buyer, it is typically assumed that the buyer will assume some or all of the responsibilities of the primary owner, AND if there is a “working” spouse involved in the business, the new buyer will also have to hire someone to replace that spouse or partner. So the money paid to the spouse that was initially classified, counted or included as part of “net profit” or “owner’s compensation” is really nothing more than payroll that must be assumed by the new buyer.

What about the value of the hard assets that are normally sold and conveyed with the sale of the business? Yes, the value of assets used in the business are also included in most valuations, but in the end, the value of assets are typically modest or minimal compared the value of the business when considering “excess earnings” or profits.

A Disgruntled Client

I once had a client who actually stopped communicating with me (he was acting like a small child) when I told him that his decision to purchase one piece of equipment after another, especially in the past 3-4 years had actually negatively impacted the value of his business. It seemed like he was bent on buying equipment and he bought and bought, using the argument that the more production capability he brought in-house the better and more productive he would be.

Sometimes it is better to broker than to invest in equipment that is only used two or three times a month. Just remember, the very last thing you want to do in the last few years before you sell your business is to start adding a bunch of new assets.

Assets never contribute on a $1 for $1 basis when it comes to valuing a business, but “excess earnings” can easily end up being multiplied by a ratio of 3 to 5 in caluclating the final value of a business.

Buyers Like Profits, Not Assets

Newly acquired assets are quickly depreciated, oftentimes far faster than shown on the balance sheet. To consider the investment cost for a new piece of equipment can or will be recaptured at the time of sale is pure folly. Buyers are not interested in buying shiny new equipment. They can do that on their own without your help.

On the other hand, buyers are interested in buying businesses that produce real “excess earnings,” “cash flow” or “profit” above and beyond what required or necessary to pay a single working owner. The bottom line? Excess earnings are always far more valuable than even the best net assets, no matter all the bells and whistles.

Drop me a line with any of your questions at: johnstewart@printingresearch.org

 

Major Pricing Variations a Myth!

Pricing Variations Between Markets
A Myth Says Industry Pricing Expert

By John C. Stewart, Executive Director, NPRC

As Executive Director of the National Printing Research Council, and publisher of key industry pricing studies for the past 30+ years, there is one recurring question or comment I tend to hear repeated week after week and month after month from various printers around the country, and that concern deals with pricing variations from market to market.

The comments go something like this: “John, just received the latest pricing study and I really like it, but I couldn’t help but notice that many of the prices in the study are much higher in my market than what is noted in the study.”

Of course, I also hear the reverse as well, “John, just received the latest pricing study and it has been a real eye-opener, but I couldn’t help but notice that many of the prices in the study seem a lot lower than what is charged in my market area.”

When it comes to pricing practices, printers, like most folks, don’t like to hear the validity of their pricing assumptions being questioned. For 10-25 years, they’ve always heard statements like, “Hey, pricing is far different in my market” or “I could never charge those prices in my market. If I did I would be out of business.”

“I could never charge those prices in my market. If I did I would be out of business.”

Many printers simply make assumptions about pricing, as well as repeat things they’ve heard in the past. They will state things like, “Obviously prices are higher in densely populated markets than they are in smaller markets,” or they will note something like, “Prices on the West Coast are typically higher than other regions of the country.” The latter being pure conjecture on their part, and is lacking any substantive evidence to back up such a claim.

Do Prices Vary by Market?

Too many times I hear well-meaning printers claim that pricing obviously varies from one geographic market to the next as well as from markets distinguished by population density. While sincere and well intentioned, most of these comments are not based upon hard cold facts, but rather more so on “gut feel.” Labor costs may indeed be higher in one area than the next, but those costs may be offset by lower material costs. 

The hard cold facts are, with rare exceptions, that you will find far greater variations in prices for specific products and services within a single market than you will find as you explore and compare pricing from one market to the next, or from one region  the next. 

“The hard cold facts are, with rare exceptions, that you will find far greater variations in prices for specific products and services within a single market than you will find as you explore and compare pricing from one market to the next, or from one region  the next.”

So, when someone emails me as they did the other day and says he is from San Francisco and the prices there are much higher there than they are in other places in the country I politely tell him/her that unless he has already conducted a professional pricing survey and “shopped his competitors” that he will generally discover that his assumptions are simply incorrect.

Pricing Digital Envelopes

Here’s a perfect example of what I am talking about. According to one of our newest reports, the 2018 Digital Color Pricing Study, the national average price for 1M 10/24# 4C digitally printed envelopes is $291. The median price is $281.

According to the recent 2018 Digital Color Pricing Study, we know that franchises are about 11% higher than independents. We also know that when we look at average pricing based upon population density, we find that average prices vary between $271 and $294 for that specific product, or what amounts to 5% of the national average. If we examine average pricing for this product based upon geographic regions (Northeast, Central, Southeast, West, etc.) we find that prices vary by less than 5% from one region to the next.

However, while prices for these #10/24 digital envelopes will vary only modestly when looking from one region to the next, or from one geographic market to the next, we know the situation is far different when we drill down to individual markets.

We know for a fact that when we look at individual markets such as Oskosh, WI, Jacksonville, FL, San Francisco, CA or Greenville, SC or similar markets we will discover far greater (sometimes huge) variations in pricing for a specific product WITHIN each of those markets, than we will discover going from one market to next. 

Small Markets & Pricing Variations

As an example, let’s take a relatively small town or city where there are 10 small format quick printing operations, and we survey the price for those 1M 10/24# 4C envelopes, we are typically going to find a much larger variation in pricing within this small market than we will find when we look at national or regional pricing for this product.

While we know the average price for 1M envelopes is indeed $291 with average variations in pricing running in the 3-7% range, if we conduct our local survey we will uncover pricing for this specific product varying between $175 (40% lower) and $350 (20% higher) among those 10 printers.

1M 10/24# White Wove, 4C envelopes (no bleed)
Average Price… $291

Median Price… $281

When we closely examine pricing variations within individual markets, we typically discover pricing variations of 20-40% +/- of what we report for national average price. Now, some of the erratic and inconsistent pricing can indeed be attributed to “real-world estimating mistakes.” However, the vast majority of pricing variations can more likely be explained due to dramatically different approaches to pricing by individual owners and the perceived value assigned to various products – as opposed to differences based upon market size, region, as well as differences due to material costs, labor costs and overhead costs.  

Most readers who call or write us with questions regarding specific prices published in various industry pricing surveys tend to do so based not out of sheer curiosity, but rather as a rationalization for justifying their own prices, especially when their own prices may vary by 30-40% or more from what we report in our pricing surveys.

My Challenge Today

Surveying and capturing pricing for specific products is not for the faint of heart or for amateurs. If you want it done right be prepared to spend $400-450 or more!

If you have some misconceptions about pricing, or would simply like to confirm that you are indeed “in the ball park” in terms of pricing I would encourage you to consider hiring a professional price shopper to survey 10-15 printers within your own market.

For details on what is entailed in hiring a shopper click on the link below. Please, whatever you do, don’t take the cheap way out and hire cousin Susy, or have your press operator Bob call around for pricing.

For years I have told clients that, “If you’re going to survey customers, at least do it professionally,” (Go here to read more about these surveys.) Don’t grumble about the cost. Be prepared to spend $400-450 – my estimate of what you should be prepared to hire a “professional shopper.”

If you do act and hire a shopper I would love to receive a copy of their written report and your analysis. Thanks for listening. Send your comments, criticisms or questions to johnstewart@printingresearch.org 

 

NPRC Releases 2018 Bindery Services Pricing Study

The 2018 Printing Industry Bindery Services Pricing Study is now available for immediate shipment. Published by the National Printing Research Council (NPRC), this new study offers the most detailed analysis of bindery services ever published in the printing industry. This nedw study, released May 15, 2018, covers literally dozens and dozens of bindery services and products typically offered in the printing industry. The new report provides both average and median pricing, plus in most cases, per M or unit pricing.  You can view the entire Table of Contents by CLICKING HERE.

Services and products highlighted include 3-hole drilling, cutting, folding, collating, numbering (both digital and crash numbering), perfect binding, booklet making, regular and NCR padding as well as dozens of other charges. Visit the NPRC Bookstore today to place your order.

Remember, as usual, all NPRC publications are sold on a 100% money-back guarantee if you are not totally satisfied these reports are not everything we promise!

NPRC Member Price (PDF): $79.50
NPRC Member Price (Hard Copy): $89.50   

Non-Member Price (PDF): $159.00
Non-Member Price (Hard Copy): $179.00

Pricing Study – Table of Contents and Sample Pricing Page

You asked for it, so we did it! Recently we received some inquiries from owners who have been thinking about purchasing our latest pricing study – The 2018 Digital Color Pricing Study, but told us that before they placed an order they would like to view the Table of Contents – a pretty reasonable request, but something we had failed to think about. So here it is… Click Here to see exactly what products are covered. 

Although this new pricing study, like all publications published by NPRC, is sold on a 100% money-back guarantee, some folks would still rather just be sure what our studies contain before they place an order. Then visit the  NPRC Bookstore to place your order.

You can also  download three different sample pages from this just-released study. Click on one or more of the pages depicted below to download a complete full-page PDF.

The first page is a sample pricing page depicting pricing for 4 x 9″ Rack Cards. Click on the image to print-out the pricing sheet:

Rack Card Pricing is one of more than 30 products and/or services covered in the 2018 Digital Color Pricing Study.

The second is a pricing page covering 9 x 12″ Digital Envelopes printed in black as well as 4C.

Click here or the artwork above to download a PDF of one of two pages offered in the study dealing with envelope printing.

The third page is a pricing page covering 4/0 and 4/4 Digitally produced business cards.

Click here or artwork above to download a sample pricing page for 4/0 and 4/4 business cards.

 

 

Sample Pricing From Bindery Survey

PRELIMINARY SAMPLE PRICING FROM
NEW NPRC BINDERY SERVICES SURVEY

Interested in some preliminary, “early bird” sample pricing extracted from NPRC’s 2018 Bindery Services Pricing Survey?– then check out some of our pricing below.

Remember, every printing firm that participates in this survey will receive a copy of the final study absolutely FREE. Surveys must be submitted no later than the March 31, 2018 Deadline. Click here to download worksheet.

The following sample prices are subject to change, but from our experience, even with a small sampling, these prices will probably be very close to the data we will provide in the final study:

  • Hand gathering, average hourly charge… $47.38
  • Hand collate 6M folded sheets, $214.49 or $35.75/M
  • Machine Collate 500 each of 10 8.5 x 11 sheets (5M total)… $17.99/M
  • Hourly cutting charge… $55.71
  • Charge per individual cut… $1.12
  • 3-Hole Drilling, off-line (60# stock)… $10.52/M
  • 3-Hole Drilling on digital device… $11.27/M
  • Padding Charge, 100 pads, 8.5 x 11, 100 shts/pad… $0.50 cents/pad
  • Numbering Charge on digital devices… $28.64/M
  • Crash Imprint 1M 2-part NCR… $36.17
  • Plus pricing for literally dozens and dozens of the most popular bindery services and products produced or offered in our industry!

If you’re really interested in fully exploring what fellow printers, large and small, are charging for various bindery services such as scoring, perfing, collating (machine and manual), cutting charges, plastic coil and Wire-O, 3-hole drilling and a dozen of other popular bindery services offered in our industry then you should really plan on participating in this popular industry survey.

You can easily end up paying $170 or more for this study when it is released in the next 60 days, OR or you can receive it FREE just by participating. Go here to download the 2018 Bindery Services Pricing Worksheet.

 

Paper Purchasing – Our Latest Data

Purchasing Paper – A Growing Challenge or
Business as Usual for Many Printing Firms?

The National Printing Research Council recently conducted a survey dealing with some of the classic issues confronting printers when it comes to purchasing paper, and while there were no “real surprises” uncovered, we did get a better feel regarding how printers deal with the second largest expense item confronting them in this industry – Paper!

First, let’s take a look at some of the basic statistics derived from our survey data. Approximately 158 printers from around the country participated in our survey. They came from small towns and cities such as Monticello, KY and Pickney, MI to much larger cities such as Houston, TX  and Pittsburgh, PA.

Second, while our survey did not directly ask for annual sales, we know that the average annual sales of our participants was in the $800,000 range while the median sales was closer to $520,000. We were able to extrapolate our annual data sales based upon other data provided by our participants – specifically monthly paper sales and the percent of paper purchases as a percent of total sales.

Average annual sales of survey participants: $822,300
Average paper purchases as a percent of total sales: 12.55%
Median annual sales of survey participants: $521,739
Median paper purchases as a percent of total sales: 11.50%

As for purchases of paper reported as a percent of total sales, the average 12.55% reported above, is extremely close to the 10.5% reported in the 2017-2018 Financial Benchmarking Study. According to the Benchmarking Study, the top quartile based upon profitability reported average paper expenditures of 10.5% while the bottom quartile reported 12.7% for paper purchases.

Survey participants also reported the following:

     • Average Paper Order… $584
     • Median Paper Order… $400

Approximately 44% of our participants reported purchasing paper every day, while another 35% told us they placed an order every 2-3 days. The reasons for paper frequency have as much to do with general sales volume as they do with minimum order requirements imposed by paper vendors.

Firms located in isolated, rural or small town environments tend to be, by their very geographic location, smaller firms and as a consequence they tend to also order smaller $$$ amounts of paper than printers located in suburban or major markets.

Minimum Paper Orders & Paper Stores

Approximately 32% of survey participants reported their local paper vendor (primary or secondary) imposes a minimum paper purchase order before they will deliver. The rest of our participants indicted they faced little if any imposed paper purchase minimums.

While 44% of our respondents indicated they place paper orders every day, another 21% indicate they place orders once a week or less.

In fact, a few printers told us they could order as little as $25-50 and their paper company would deliver, often at no extra charge.

Other printers, however, reported having to order $400 or more to avoid paying a delivery fees of $50 or more.

Approximately one-third of paper vendors have established a “Minimum Purchase” requirement before they will deliver paper.

The average minimum paper purchase required by vendors imposing such an amount is $273. The median amount is $300.

For printers unable to meet these “minimum purchase amounts” they are typically faced with an average or special delivery fee of $80. The median delivery fee, when imposed, is $25.

Although we have no hard data to support this, we believe there is a decline in the number of paper stores available and serving the printing industry.

What about “paper stores”? The industry is pretty much split when it comes to having access to such a convenient alternative to relying on paper deliveries, especially for small amounts of paper. Approximately 55% of our respondents told us they have access to such stores, while 45% told us they have no access.

Paper Vendors & Delivery Frequency

Once again, larger printing firms in larger markets have the benefit of more frequent paper deliveries. Approximately 79% of our survey respondents told us their paper companies deliver to their markets every single day.

A small percent of our respondents indicated they could only count on scheduled paper deliveries twice a week. Fortunately, most printers can count on paper deliveries 5 days per week.

At the other end of the spectrum are about 13% of printers who either get paper deliveries once or twice each week, or must rely on freight companies or services such as UPS and FedEx.

Approximately 66% of our survey participants told us that their primary paper vendor does offer alternative shipping and were more than willing to ship paper orders via UPS, FedEx and couriers if their paper order was too small to process internally.

Discounts for Prompt Payment?

Regardless of whether the paper vendor is a primary or a secondary supplier, a significant percent offer discounts for prompt payment of invoices.

      • 67% of Primary Vendor Offer a Discount
     • 62% of Secondary Vendors Offer a Discount

Location, Location, Location

It should come as no surprise that paper vendors tend to be located where the action is, and where the action is also means where large numbers of printers are located as well – where else but in larger metropolitan areas.

Almost 12% of the printers we surveyed indicated their primary paper vendor was at least 100 miles away!

Our survey also asked printers to tell us the approximate distance between their primary and secondary paper vendors and their own location. Approximately 67% of printers told us their paper vendors were located 50 miles or less from their own location, with a majority of them telling us their paper vendor was less than 25 miles away!

“Many printers around the country don’t know how lucky they are. Our one and only paper supplier, Mac Paper, is approximately 75 miles away and they have made it almost impossible for smaller printers to deal with them…”

On the other hand, approximately 8% of our participants told us their primary vendor was located between 100-200 miles away. Another 2% told us their primary vendor was more than 200 miles away!

When it comes to secondary vendors, it gets even worse, 15% of our participants telling us that their secondary vendor was 100-200 miles away.

One printer complained and told us, “Many printers around the country don’t know how lucky they are. Our one and only paper supplier, Mac Paper, is approximately 75 miles away and they have made it almost impossible for smaller printers to deal with them. They won’t even deliver a paper order worth less than $200. If the order is between $200 and $400 they charge a $50 delivery fee. Between $400 and $500 they charge a $25 fee. Plus, on top of that they also hit us with a $6 fuel charge.”

 

 

 

Digital Color Pricing Tips

Pricing Newsletters or Booklets Feature Make
Quoting Odd Quantities Easier than Ever!

Here’s a “real world” example of how to get the most out of the newly released NPRC 2018 Digital Color Pricing Study. Some people are often overwhelmed at the information available in our studies, so we thought we would pass on a couple of digital color pricing tips gleaned from our own experiences. 

This is a modified version of the old “The cobbler’s son has no shoes” parable. As many of you know I am the Executive Director of NPRC while my wife Mary owns and runs a small printing operation (Paragon Printing & Graphics) that offers most of the traditional offset and digital services found in most printing firms these days. 

She Gets Her Studies Free!

I have nothing to do with the printing firm and Mary has little to do with my publishing and consulting services. In fact, we can go one or two days at work without even speaking to each other, with each of us so busy doing our own thing.

While Mary is certainly aware of the types of studies we produce, she rarely finds the time to read or analyze them to any great extent, which is is always a bit disappointing to me, considering the rock-bottom prices at which I make them available to her!

So much to my surprise, she came to me the other day with a copy of the recent digital printing study in hand, and said she was working on a quote for 900 copies of a 24-page newsletter. Finished size of the self-cover newsletter was to be 8.5 x 11″. More specifically, the job was to consist of 6 11 x 17″ page signatures, no bleeds, digitally printed on 100# coated text. Signatures where to be collated, folded, stapled and face-trimmed. 

Mary said she found the newsletter pricing section on pages 55-57, but all that she could find were average and median prices for either 16-page or 32-page newsletters, and she needed a price for a 24-page newsletter. I told her that wouldn’t be too hard to come up with a price, at the very least we could interpolate pricing.

Pricing Per Newsletter

Voila! I found an even easier way, something I had forgotten. Not only does our study offer average and median prices for quantities ranging between 100 and 2,500, it also features pricing per individual newsletter as well. In fact, it provides average and median price per newsletter as well as what we term “majority low” and “majority high” pricing as well.

So the first thing we did is look at the average price per newsletter at the 1,000 quantity level for both a 16-page newsletter and then pricing for a 32-page version. Average digital color pricing for the 16-page newsletters was $2.68. Pricing for the 32-page newsletters was $4.87.  Averaging the two produced and average price per newsletter of $3.78.

Knowing the quantity was very close to the 1,000 quantity pricing we chose to go with that price and simply multiply our $3.78 x 900 for a total price of $3,397. Mary’s original price was significantly higher, but to be honest, I have no idea what her final price was for the job, but at least I can say she was better informed regarding digital color pricing for this quantity, format and size than she was before, but don’t let on I said that!

Even more useful, the digital color pricing in the newsletter pricing section is the fact that the study actually breaks down pricing to the signature level, so we could look at pricing per side, per signature and discover that pricing ranges between $0.33 and $0.30 each. 

Does Study Cover All Products?

No, the study couldn’t possibly cover every type of product offered in the industry, but by using interpolation, averaging and a big dose of common sense, you can find sample pricing for dozens and dozens of products produced on digital color devices. As an example, you can find detailed pricing on some of the following products:

  • Flat Sheets, 100# coated text & cover (8.5 x 11 and 11 x 17 sizes)
  • 2-part and 3-part carbonless forms, plain and numbered
  • Retail click pricing (no stock pricing included)
  • Stock Mark-up practices
  • 16-page and 32-page newsletters and booklets
  • Envelope Pricing, black  and 4-c
  • Business Card Pricing, offset, digital and brokered
  • Popular discounting methods for various customers
  • Plus, dozens of variations in terms of quantities and pricing

To read more about this study visit the NPRC Bookstore.

NPRC Offers Printing Goals Sheet

NPRC Offers Free Financial Printing Goals Sheet

NPRC has just released its latest 2018 Financial Printing Goals sheet for the printing industry. Based upon years of research conducted by QP Consulting, Inc., as well as data available in NPRC’s 2017-2018 Financial Benchmarking Study, this new handout offers specific financial printing goals required to attain “profit leader” status.

Printing Goals  

The data is based upon information provided by printers falling into the top quartile in this industry in terms of profitability. This new Financial Goals Sheet for the printing industry details specific ratios for cost of sales, payroll expenses (excluding owners) and overhead expenses.

Download Printing Goals Sheet…

Free Financial Printing Goals Sheet with key ratios

Free Financial Printing Goals Sheet with key ratios

Our advice, download and print the PDF provided and tape or staple to the wall next to your desk. Simply viewing these key profitability ratios on a daily basis, according to many printers who have used this sheet in the past, will help you improve your profitability.

To view and download a PDF of this goal sheet, click here.

5 Characteristics of Troubled Printing Firms

Troubled Printing Firms – Five Characteristics!

John C. Stewart, Executive Director, NPRC

John Stewart

John Stewart Executive Director, NPRC

NPRC maintains the largest and most accurate data base in the printing industry, especially when it comes to key financial ratios. Just like  the Farmers Insurance Company that  frequently notes, “We know a thing or two because we’ve seen a thing or two,” we feel the same way when it comes to knowing what works and what doesn’t work in the printing industry! This article intends to target one of our most topics – troubled printing firms!

So we thought we would tackle in detail five of the most common attributes of troubled printing firms – attributes that clearly distinguish between the profit leaders and the profit laggards in our industry. For some readers, one or more of the practices noted below will be almost “second nature,” while others will either skip the advice entirely, or rationalize why that characteristic doesn’t apply to them.

(1) Monthly Financial Statements – There’s no question about it – troubled printing firms are the least likely to receive and analyze monthly financial statements. Some owners appear to go through the motions of getting financial statements, but then rarely take the time to really look them over! Some of the most troubled firms I know are likely to go months without obtaining a current profit and loss statement or a balance sheet.

Collage of Financial Benchmark Study Pages

Collage of Financial Benchmark Study Pages

Successful owners are far more likely to spend at least a couple of hours each month going over various expenses and ratios, using a yellow highlighter to denote areas that need work. Every owner should have at their finger-tips key ratio goals for categories such as payroll, cost of goods and overhead expenses. Note that “payroll” should include all direct and indirect payroll expenses, but should exclude that attributed to a single owner. Successful and profitable owners can typically quote these key ratios, while less successful printers end up making wild guesses.

If you have no idea what the “top” companies in this industry report for these key expense categories then you need to make a small investment and purchase the latest Financial Benchmarking Study from NPRC. This report is all about how to increase your profitability. The Executive Summary by long-time industry guru Larry Hunt is by itself worth ten times the price of this report. To purchase, visit the NPRC Bookstore.

(2) Low Productivity as Measured by SPE – How many employees, including working owners, does it take to produce $XXX in sales. This critical ratio is one of the simplest of ratios to calculate in our industry, and yet it is also the most telling as well! The bottom line – troubled printing firms do a lousy job when it comes to maintaining high levels of productivity.

Sales Per Employee Graph

Sales Per Employee Graph

To calculate your SPE, divide total annual sales (actual or projected) by the total number of employees (including all working owners and partners) required to produce those sales. Yes, that includes outside sales reps whether or not they receive a salary. The more accurate your numbers the more valuable the resulting answer will be. Count part-time employees proportionately. If an employee averages about 20 hours per week, then count he or she as a one-half or .5 employee.

In a recent survey of approximately 210 printing firms, the SPE ranged from 20 firms reporting an SPE of less than $100,000 to 52 companies reporting an SPE of $155,000 or more. To put this in some “real world” terms, let’s take a look at two firms – both producing $700,000 in sales.

• One $700,000 firm requires/reports using 7 employees to produce its sales – An SPE of $100,000! Plain and simple, a firm reporting an SPE of $100,000 or less is simply over-staffed, as well as most likely inefficient as well. That SPE number is also significantly below the industry average of approximately $135,000! Owners of firms with below average SPEs are likely under-paying themselves due to excessive payroll. Low SPEs also tend to impact the value of a firm when it comes time to sell – if it sells at all!

• While a second firm reporting the same $700,000 in sales produces its sales with only 4.5 employees, or an SPE of $155,500. Although the SPE calculation totally ignores what employees are actually paid, a closer examination tends to indicate that employees working for high-SPE firms also tend to be paid significantly higher and also tend to be far more efficient and talented at what they do.

(3) High Payroll Costs – Unfortunately for many owners  of troubled printing firms (it’s not always their fault), total payroll costs are sometimes hard to find on the typical profit and loss statement. This is often the fault of CPAs and accountants, as well as in-house bookkeepers, who fail to consolidate payroll expenses under one heading.

We often see direct payroll expenses under a payroll heading, but then discover that other related payroll expenses such as health insurance, payroll taxes and unemployment taxes are listed below under overhead expenses. Ideally, you should be able to look at your financial statements and quickly determine the total amount spent each month, as a percent of sales, for total payroll, excluding your own payroll, taxes and benefits.

Financial Benchmarking Study

Financial Benchmarking Study

The previously mentioned Financial Benchmarking Study contains some very reliable payroll ratios, including ratios based upon various annual sales categories, but also a quartile report which provides total payroll for the top 25% firms (in terms of profitability) and compare that ratio against the bottom 25%.

Is your company a “troubled printing firm? If your total payroll expenses are in the 32-34% range or higher (excluding your own payroll) the answer is “yes.”You have a serious problem on your hands, at least in comparison with the rest of the industry, and it needs to be addressed immediately.

On the other hand, if your total payroll is in the 26-28% range you should pat yourself on the back because those ratios would be considered outstanding in this industry.

P.S. Payroll is consistently the single largest expense in operating a modern-day printing firm, and has been the largest expense ratio for more than 35 years. If you fail to proactively address this category, it really won’t matter much about steps taken elsewhere on your financial statements.  As we’ve noted previously, troubled printing firms are notorious  for  failing to maintain acceptable payroll ratios.

(4) Failure to Monitor Industry Pricing – Our industry is somewhat unique in that it has available to it so much in terms of valuable financial and pricing data – information that can really help a firm compare its performance and pricing practices against others in the industry. Without many of these studies, a printer could easily find himself misled by the comments of customers who sometimes remark, “I like what you folks do, but your prices are just too high sometimes.”

How is a printer to react when he hears something like that? Well, before you go off and start lowering all your prices, or instituting more discounting, there are at least two things you can do. The cost will be relative small and the ROI could be huge, in terms of both raw dollars as well as peace of mind.

First, if you’re concerned about pricing and where you stand compared to competitors you could visit the NPRC site and check-out an article we posted about 15 months ago titled, “Hiring Someone to Shop Competitors.” Click here to read the article. Conducting a thorough, detailed survey of competitors can be a real eye-opener, but you can’t do it on the cheap. Hire someone, as the article explains, and do it right.

I have seen some top-notch surveys conducted by printers I know and every time I see the results they tend to refute many of the myths regarding pricing within individual markets – even in very small markets where only 5-6 printing firms exist.

Key NPRC Studies

These are just a few of the many studies and reports available in the NPRC Bookstore. No other printing association offers the broad selection of studies and reports offered by NPRC.

Second, visit the NPRC Bookstore and check-out the list of pricing studies we have published in the past 24-36 months. The pricing data we report is extremely accurate with an average margin of error of +/- 4% or less for most items. And please don’t dismiss this suggestion by saying that most pricing is local and not national and therefore what we report may not have any bearing in your local market! Wrong, wrong!

We can report with absolute certainty, based upon hundreds of individual market surveys, that pricing tends to vary far more within your own individual market than it does from one section of the country to the next. We can report with great assurance that while the national average price for a simple product such as 1,000 #10/24 envelopes printed in reflex blue (no bleeds) may vary by no more that +/- 4%, prices for that product within an individual market can easily vary by as much +/- 35-40%.  +/- of the reported average price!

We just checked pricing on this product and even after eliminating outliers, the pricing for 1M envelopes varied between a low of $104 and $280, with an average price of approximately $158. that type of variation occurs even within the smallest of markets. 

(5) Tolerating “Bad Apples” – With more than 400 on-site, individualized consulting visits under my belt, I can report that I can’t recall visiting a mid-size or larger firm (5 or more employees) that didn’t have within their midst at least one “bad apple.”

Ironically, while it was not that difficult for me to spot the bad apple, the owners were often totally oblivious of the bad apple, or the real-world impact that the bad apple was having on the rest of the staff. Not surprising too was the fact that virtually all of the remaining employees could name the ‘bad apple” in the company, agreeing almost 100% of the time on who that employee was!

Press Room

Press Room

Rest assured, your employees are uniquely equipped to identify who the bad apple is and how he or she is impacting the profitability of your firm. They know it, even if you don’t! Unfortunately, even the good employees, just like the owners, sooner rather than later start making up excuses for the bad apples, and why they continue to be retained.

“Bobbi’s a single mother who brings her personal problems to work and shares them with other employees as well as our customers! Sometimes it’s like a soap opera out there in the shop. As a consequence, a lot of time is wasted.”

“Martin is a recovering alcoholic but every once in awhile he goes off the wagon. We always seem to have our fingers crossed as to whether he will show up, especially after the holidays.”

“Steve isn’t the most reliable. However, when he shows up he is very productive, but I can’t always count on him. There is always something going on in his life that interferes with work.”

“Cathy is incredibly talented, but has a terrible personality when it comes to dealing with customers, and I’m at my wits end in how to deal with the situation. I’m embarrassed to admit that I have been putting up with this for more than seven years!”

“Mike is probably one of the best operators I have when it comes to knowing the equipment, but he makes a lot of mistakes as well. He’s just not very good when it comes following procedures.”

I could go on offering up a dozen of the more popular excuses I have heard over the years when it comes to tolerating employees that in any other more profitable firm would have been terminated months if not years ago. I guess that’s the difference, among many, between how the “profit leaders” in our industry manage their businesses as opposed to the “profit laggards.”

If you have any questions about this article don’t hesitate to drop me an email at johnstewart@printingresearch.org.

Happy 2018!