Controller Embezzles $2.8M from Printing Firm

We rarely if ever provide links to outside sources that we are unable to verify, but the following story is worth the exception. Over the years, however, we have encountered a number of stories involving fraud and embezzlement, and not all of them involved multi-million dollar firms.

It’s amazing to hear printers say that this could never happen to them because they see and sign all checks personally. No way an accountant or bookkeeper could pull the wool over their eyes!

The truth of the matter is that there are many firms with sales far less than a million that have also be victims of embezzlement. The lesson to be learned is that it can happen to firms of all sizes. Click here or the artwork above to read the story of one such embezzlement.

The Shocking Surprise – Then read the story to the end where you will find a shocking surprise!



Calculating Break-even Sales in the Covid Era

Update & revised with corrections as of 8-28-2020 11:00 AM

The good news is that calculating break-even sales for a company is actually quite simple. The bad news is that many companies in our industry are having a difficult time meeting that break-even figure, thanks in large part to Covid-19 and the devastating impact it has had on the printing industry.

Basically, “break-even” sales is the dollar amount of sales that must be achieved that will cover all of the fixed and variable expenses of the business, and produce a profit of zero. While we would all love to produce a profit of $XXX dollars or a percent of 23% or more, the break-even calculation tells you the very minimum of sales you must achieve each month in order to survive, pay all your bills (including your own salary) and not report a loss!

So Exactly What Do You Need

Exactly what do you need to calculate break-even? First, you will need a current profit & loss statement, preferably at least a 6-month statement.

Second, you will need to separate and total all your fixed expenses from your most current statement. Fixed expenses are typically, but not always, those expenses listed under general overhead expenses. Generally speaking, fixed expenses like rent, utilities, insurance and leases are those expenses that remain pretty much the same each month regardless of sales.

Real fixed expenses are those that cannot simply be reduced or eliminated just because your sales are down! They are, as the term implies, FIXED! What about depreciation? Depreciation is generally considered a fixed expense as well, but for the purposes of calculating a “real world” break-even we will not include this figure in our calculation.

What about payroll? Payroll tends to be far more of a fixed expense than a variable! You will need to total $$$ figure required to cover your total payroll expenses, both direct and indirect. That figure would include FICA expenses, workman’s comp, health insurance, payroll processing costs and all other benefits paid on behalf of all employees.

Do You Include Owner’s Salary?

What about a salary or wage for the owner or spouse? Yes, you would include that figure as well. The same would be true for an owner. Include his or her salary and benefits as well. To exclude this figure, would be to assume that the owner, in terms of calculating his or her break-even sales, is willing to forego his or her salary in order to arrive at the lowest calculated amount of sales that must be achieved in order to pay all expenses of the business, both fixed and variable.

The above scenario, speculates that the owner is saying to himself (herself), “I need to calculate the bare bones break-even for my company, and I am willing to forego my salary for a couple of months in order to calculate exactly the minimum sales I need to achieve in order to pay all my bills as well as cover my current payroll. What do those sales need to be?”

Checking out Variable Expenses

Variable Expenses are next! While the fixed expense calculations noted above are looking for dollar ($$$) totals, for variable expenses we are looking at ratios or percentages in terms of sales. Most variable expenses are expressed as a percent of sales. Most of those variable expenses appear on your profit & loss statements under “cost of goods.” These are expenses that generally vary directly with sales. In theory, if you have $0 sales you have 0% of cost of goods. Sometimes, however, variable expenses appear elsewhere on your profit and loss statements so you will need to check carefully.

Examples of variable expenses on a typical P&L would be paper costs, digital copier clicks, outside services, outside purchases, repairs & maintenance, shipping costs and other materials. If you have minimum service costs that are paid in addition to meter clicks, these costs would be included under fixed expenses, not variable. Once again, we are looking for a ratio or percent representing the total percent of all variable expenses required to operate the business.

Some Real World Calculations

After gathering the above, we should end up with two entries:

• Total Fixed Expenses in dollars ($$$)
• Total Variable Expenses expressed as a percent (%) of sales

Break-even Formula – The formula used to calculate break-even is as follows:

Break-even sales = Fixed Expenses in $$/inverse of variable expenses*
*(If total variable expenses is 45%, the inverse would be 55%)

Using actual sales and ratios from two sample breakout from the NPRC 2019-2020 Financial Benchmarking Study, and the formula noted above, we will calculate the break-even sales (annual) for two different firms, one a low profit firm and the other being a high profit firm.

Low Profit Firm: Reported sales $1,448,004 and Owner’s Comp of 5.4%
Fixed expenses: $927,557 (64% of sales)
Variable expenses: 30.6%
BE Sales formula = $927,557/.694
BE = $1,336,537

High Profit Firm: Reported sales $1,037,417 and Owner’s Comp of 19.4%
Fixed expenses $469,525 (45.2% of sales)
Variable expenses: 29.0%
BE Sales formula = $469,525/.71
BE = $661,302
(Note that in both examples cited above, payroll expenses were treated as fixed expenses. You can re-calculate by treating payroll costs as variable expense instead and your BE figure will be different. However, as noted previously, payroll tends to be far more of a fixed expense than a variable expense.)

General Conclusions & Comments

General observations – Note that the above are actual quartile ratios and expenses from our Benchmarking Study. Note that the low profit firms don’t have a lot of wiggle room when it comes to reaching a break-even in sales. If they lose approximately $111,000 in sales they will already be at break-even, meaning 0% profit.

On the other hand, the high profit firms, because their fixed expenses in terms of raw dollars as well as a percent of sales are so much lower, their break-even is much, much lower. With their current fixed and variable expenses as stated, they could weather an economic crisis such as Covid-19 so much better. They could lose approximately $376,000 in sales before dropping below 0% in terms of profits or break-even.

Remember when making calculations to account for the period you are using. If you are using quarterly figures, then your formula would reveal the break-even for that quarter, not a month. You can and should calculate break-even sales and convert to a monthly sales figure. It is also worth noting that your financial statements ought to conform or follow what is suggested per NPRC’s suggested chart of accounts, thus making it easy to extract fixed and variable expenses.

One last comment – If your financial statements do not automatically include ratios (expense as a percent of sales) for each entry on your P&Ls then you ought to fire the bookkeeper or accountant who is preparing them. This not a topic of debate but rather a statement of fact. If you’re not being provided with the proper information, find someone who can.


100+ Words to Avoid in Email Subject Lines

NPRC sends out upwards of 30,000 or more emails each week. Most of our emails are designed to promote industry studies, research surveys and general articles about the printing, mailing and sign industries. We learned early on that half the battle in getting folks to open and read our emails is based upon the “subject lines” we create and use. In fact, we often spend more time writing and re-writing a subject line than we will spend on the body of the email.

If you achieve open rates of 15% or more you are doing quite well. Pat yourself on the back! If you’re not getting open rates that high, then you might consider avoiding using one or more of the following words or phrases since they are likely to trigger spam filters at your recipient’s end and place your email in a spam or trash folder rather than in your customer’s “in-box.”

We know it’s hard sometimes, especially when you are emotionally close to the subject at hand, to avoid some of these words. Nonetheless, you need to avoid many of the words below if you want to boost readership. Sometimes it seems like every catchy word or phrase you want to use appears in the “no-no” list below, but don’t give up. On the other, try to think out of the box!

Other email subject-line tips offered by the experts… Avoid exclamation marks, using all caps, subject lines longer than 5-6 words. Be careful with attempts at humor, they can definitely backfire. We messed up big-time one time many years ago with a promo for our printing firm. The subject line? “A special offer for Doctors & Dentists.”

Did you catch the mistake? Dentists are of course doctors, and half the dentists that opened the email were offended to one degree or another by unintentional slight in our subject line!

Common email spam words and phrases to avoid

#1 $$$ 100%
Act now Action Additional income
Affordable All natural/new Amazed
Apply now Avoid Be amazed/your own boss
Beneficiary Billing Billion
Bonus Boss Buy
Call free/now Cancel Cash
Casino Certified Cheap
Click here Clearance Collect
Compare rates Congratulations Credit card/check/offers
Cures Deal Dear friend/somebody
Debt Discount Direct email
Don’t delete/hesitate Double your income/cash Earn
Extra Expire Fantastic
Free access/money/gift Freedom Friend
Get it now/started/paid Great Guarantee
Hello Income Increase sales/traffic
Instant Investment Junk
Limited Lose Lowest price
Luxury Make $/money Medicine
Money Name No credit check/experience
Now Obligation Offer
Only Open Order now
Please Presently Problem
Promise Purchase Quote
Rates Refinance Refund
Remove Request Risk-free
Sales Satisfaction Save
Score Serious Spam
Success Supplies Take action
Terms Traffic Trial
Unlimited Urgent Weight
While supplies last Win Winner



Marketing’s Famous “Rule of 27”

RULE OF 27 – Why So Many Direct Mail & Email Campaigns Fail!

By John C. Stewart, Executive Director, NPRC

I first heard of this rule many, many years ago, and I have tried my very best to use it to help me promote various products and services I sell. It is a fairly straight rule to explain, but a huge challenge to implement with any consistency.

The Rule of 27 actually consists of two parts or theorems. In simplest of terms, Part #1 says that it takes a lot individual mailing pieces sent to a specific prospect to bring them around from having no knowledge or interest in your product or services to possibly, after many attempts, convincing them to possibly give you a try. Part #2 suggests that the odds are only one in three that a specific mailing piece will ever make it to the recipient’s desk and actually be seen.

RULE #1 – It take approximately 9 mailers or mailing pieces to bring about a change in the recipient… There are very similar rules or anecdotes as it relates to outside sales calls. Many readers have probably heard the stories that studies have shown it takes XX sales calls either by phone or in person before a prospect will even entertain a quote from you. These same studies often note that the typical outside sales rep typically gives up calling on the prospect at 2-3 calls less than is represented by XX.

Below is a sample progression of what typically transpires as one mailing piece after another is sent to a prospect.

Progression of Acceptance
1. He/she has little or no recognition of your business… considers you probably a flash in the pan.
2. Prospect considers you nothing more than just another start-up trying to make inroads.
3. After receiving 3 or more mailers, the prospect at least acknowledges that you don’t give up easy; nonetheless, he/she has no interest or need for your services.
4. By the 4th or 5th email (or call) you’ve possibly established some credibility and name recognition as a possible supplier
5. By the 5th email or call it appears you have established yourself as an established supplier, but nonetheless there is still no need for your service.
6. By this time, you have possibly started to pique their interest in your business or services, and they may begin to pay a bit more attention.
7. Chances are good that the recipient’s mindset has changed a bit, and is far more open-minded to your offers as well as accepting calls or inquiries from you.
8. Given the right circumstances, the recipient will now actively consider you as potential supplier, especially if during the interim he has had some questionable experiences with his/her current vendors.
9. By now, assuming the stars are properly aligned, the recipient’s willingness to try someone new as the result of possibly one or more bad experiences has become a reality.
If you’re looking for a quick fix, something that can bring about positive responses with little effort on your part then you need to try something else. The above progression and steps required to convert a prospect into a possible customer is often long and grueling.


Getting recipients to even open, let alone read a well-designed marketing piece is a constant challenge. Open rates of 18% or more are quite rare.

RULE #2 – Recalling only one out of three mailers… A corollary to rule #1 is that the average or typical direct mail recipient, when put to a recall test, can often only recall having received and/or opened one out of three mailers sent to him by a specific vendor.

The reasons recipients fail to recall ever seeing your mailing pieces are multiple and varied, but here are a few reasons given…

  • Recipient was in the office that day but was tied up in meetings and never seriously perused his mail.
  • Absent from the business the day it arrived… Owner is out of office on business or for pleasure on the day the mailing piece arrives, and general office practices are to either read or discard 3rd/bulk rate mail daily.
  • Recipient’s business day turns out to be overly chaotic with one crisis or another and he/she never gets an opportunity to examine mail.
  • Major news event occurs and totally distracts from the message you have sent. The recipient ends up concentrating solely on the major news event, to the detriment of the well-design mailing piece. Two of the most extreme events that caused billions of well-intentioned and well- designed mailing pieces to end up being thrown in the trash are when JFK was assassinated and when 9-11 occurred. However, it doesn’t take anything of that magnitude to distract prospects.
  • Poor timing as to when a mailing piece is scheduled to arrive often has a significant impact on if and when a mailing pieces is opened and/or read.
  • Poor headlines and/or subject lines (whether direct mail or email campaigns) can have a major impact on whether a mailer is ever opened let alone read!


So, if your goal is to place an effective advertising message in front of a prospect, and turn him into a customer, it may indeed require putting at least 27 mailing pieces (Combining Rules #1 and #2)…

KNOWING that it will easily take nine mailing pieces (or more) to establish your credibility (Rule #1) and knowing that the average recipient may only recall seeing one out of every three pieces you send him (Rule #2),  you may indeed have to send at least 27 marketing/mailing pieces for the numbers to work out! Formula: 9 x 3 = 27 That’s the Rule of 27!

First, you plan on mailing 27 pieces accepting the fact that you are in this for the long haul. You must be prepared for the deadly silence that often occurs after launching a direct mail campaign.

“You must be prepared for the deadly silence that often occurs after launching a direct mail campaign.

Second, even assuming you are successful in getting nine marketing pieces on your recipient’s desk, your marketing efforts and writing skills will certainly be put to the test while you get him to budge and possibly consider using your services.

Be prepared for some depressing facts as you first launch you your direct mail campaign. You will be extremely lucky if after trashing your first three mailing pieces, that your prospect will consider looking at you next four to six mailers for eight seconds or less.

Finally, if you are extremely lucky, and the stars are aligned in your favor, the prospect or recipient may finally come around, possibly find some interest in your products or services, and finally, finally, after you have sent him/her 27 ore more pieces over the course of 6 months to a year, they may finally pick up the phone and give you a call.

Here are some other useful links that discuss this rule as well…

AMEX –  The Most Important Rule in Marketing

Once A Day MarketingMarketing the Rule of 27


Mailing Study Aids Getting $15,000 Job!

NPRC just received the following unsolicited comment from a printer in North Palm Beach, FL… (P.S. You can still save 16% on this study) Check-out additional news about this study appearing below.)

“John: We do a number of mailings a month but very little EDDM. Yesterday, we were asked to price a big EDDM. Although, I could price the print price, figuring the mailing cost, aside from postage, as some what of a mystery. So, I turned to the survey and was able right away to get a good idea of what others were charging. Made my day. Considering this will be a $15,000 job-paying $147.00 for the survey was chump change.”

Big Thanks, Dennis Beck,
Minuteman Press
North Palm Beach, FL


Download Free Mark-up Practices Report

Just a brief reminder that you can still download a FREE copy of  NPRC’s popular 2017 Hourly Rates & Mark-up Practices Report.  This “Free Download” offer expires July 18th and will not be repeated. Published in the summer of 2017, this special report  offers an in-depth view of budgeted hour rates and mark-up practices in the quick and small format printing industry.

This offer is simply our way of saying thanks to owners like yourself who have supported our industry research efforts during the past 25+ years. We appreciate your support and encourage your continued participation.

This study reviews hourly rates for hand labor, graphic services and more than ten bindery operations – operations such as padding, laminating, 3-hole drilling and hand collating. Use this study to update and revise your computerized estimating programs.

The Hourly Rates Report analyzes average and median mark-up percentages applied by owners when paper costs $100, $250, $500, $1,000 and $2,500.

To download this useful report, click here or the adjoining artwork.

After you’ve downloaded this FREE Report, take a view minutes to visit the NPRC Bookstore where you will find a half dozen or more studies dealing with Mailing Services, Digital Printing, Wages & Benefits and Pricing Practices for Signs & Large Format.

Special Coupons Available – The following coupons are available when purchasing the following studies: (Note the coupons below expire July 18th!)

  • 2018 -19 Signs & Wide Format Pricing StudyNPRCSIGNS18 (18% Discount)
  • 2019 Printing Industry Wage & Benefits StudyNPRCWAGES14 (14%  Discount)
  • 2020-21 Mailing Services Pricing StudyNPRCMAILING16 (16 % Discount)

Shocking – Printers Report April Sales Down 44%!

Early, preliminary results from NPRC’s newest survey, Covid-19 “Take #2,” are in and the results are nothing short of shocking!

Although approximately 81% of printers who responded told us they are back to “close to normal” in terms of actually being open for business, the financial picture is far more grim.

Below are just a few of the stats we’ve been able to gather so far. Please note that the percentages displayed are tentative and subject to change in the next few days.

The Check is in the Mail & other Stats…

  • According to survey respondents so far, approximately 29% of all employees in the printing industry are currently furloughed.
  • April 2020 sales compared to April 2019 sales are down a whopping -54%!
  • Second Qtr. 2020 sales compared to the same quarter in 2019 are down -44%.
  • Six month 2020 sales compared to 2019 sales are projected down -33%.
  • Digital color copy volume is reported to be down -48%.
  • 60% of all respondents (Survey launched May 6 at approx. 9:30 a.m.) report they have not yet received their $1,200 stimulus check.

Click here to participate in our survey:

We encourage all readers of this post to take our Covid-19 Survey. The deadline for participating is May 12th. All participants will receive a special link that will allow them to download a complete report of our survey.


Corona Virus Factoid Sheet

There’s a lot of misinformation going around and the last thing we want to do is contribute to that misinformation. Nonetheless, we received the following, second hand, from an immunologist at Johns Hopkins University Medical Center in Baltimore. I wish we could supply the name but we could not find it, and the reason we can’t is probably due to the fact that JH is probably a bit sensitive as to papers like this being published with or even without attribution. That said, I found it very informative and educational – John Stewart.

From an immunologist at Johns Hopkins University…

Feeling confused as to why the Coronavirus is a bigger deal than Seasonal flu?  Here it is in a nutshell. I hope this helps.  Feel free to share this with others who don’t understand… It has to do with RNA sequencing….  I.e. genetics.

Seasonal flu is an “all human virus”.  The DNA/RNA chains that make up the virus are recognized by the human immune system.  This means that your body has some immunity to it before it comes around each year…  you get immunity two ways…through exposure to a virus, or by getting a flu shot.

Novel viruses, come from ANIMALS….the WHO (World Health Organization) tracks novel viruses in animals, (sometimes for years watching for mutations). Usually these viruses only transfer from animal to animal (pigs in the case of H1N1) (birds in the case of the Spanish flu).  But once one of these animal viruses mutates, and starts to transfer from animals to humans… then it’s a problem. Why? Because we have no natural or acquired immunity. The RNA sequencing of the genes inside the virus isn’t human, and the human immune system doesn’t recognize it so, we can’t fight it off.

Now sometimes, the mutation only allows transfer from animal to human. For years it’s only transmission is from an infected animal to a human, before it finally mutates so that it can now transfer human to human. Once that happens, we have a new contagion phase.  And depending on the fashion of this new mutation, that’s what decides how contagious, or how deadly it’s gonna be.

H1N1 was deadly, but it did not mutate in a way that was as deadly as the Spanish flu.    It’s RNA was slower to mutate and it attacked its host differently too. Fast  forward.

Now, here comes this Coronavirus… it existed in animals only, for nobody knows how long…but one day, at an animal market, in Wuhan China in December 2019, it mutated and made the jump from ANIMAL TO PEOPLE.  At first, only animals could give it to a person… But here is the scary part…. in just TWO WEEKS it mutated AGAIN and gained the ability to jump from human to human.   Scientists call this quick ability, “slippery”

This Coronavirus, not being in any form a “human” virus (whereas we would all have some natural or acquired immunity), took off like a rocket!! And this was because humans have no known immunity…doctors have no known medicines for it.

And it just so happens that this particular mutated animal virus, changed itself in such a way that it causes great damage to human lungs.

That’s why Coronavirus is different from seasonal flu, or H1N1 or any other type of influenza….  this one is slippery AF.   And it’s a lung eater…And, it’s already mutated AGAIN, so that we now have two strains to deal with, strain s, and strain L….which makes it twice as hard to develop a vaccine.

We really have no tools in our shed, with this.  History has shown that fast and immediate closings of public places has helped in the past pandemics. Philadelphia and Baltimore were reluctant to close events in 1918 and they were the hardest hit in the US during the Spanish Flu.

Factoid:  Henry VIII stayed in his room and allowed no one near him, till the Black Plague passed…(honestly…I understand him so much better now). Just like us, he had no tools in his shed, except social isolation…

And the author concludes – And let me end by saying….right now it’s hitting older folks harder… but this genome is so slippery…if it mutates again (and it will). Who is to say, what it will do next.

Be smart folks…  acting like you’re unafraid is so not sexy right now, and frankly stupid and selfish. Stay home folks…  and share this to those that just are not catching on.



Florida Printer Praises Mailing Study

NPRC has hit the mark again!”, says Bob Heid, owner of We Are Kymera, Orlando, FL.  “We are very appreciative of NPRC’s tireless efforts to get these studies right and on time,” adds Heid.

“We’ve been in the print and mail business for 15 years, and have always relied on client feedback and market knowledge to help us set prices. It’s nice to see these corroborated by other businesses similar to ours on a regional and even national basis. Thanks again NPRC.”

Heid is one of many printers and mailers who have praised NPRC’s latest industry study, the 2020-2021 Mailing Services Pricing Study. This brand new, 100+ page study is packed with average and median prices for dozens and dozens of popular mailing products and services, including:

Full-Service IMb Charges
De-duping Fees
NCOA Processing Fees
Laser Letter Merging Fees
Markup Rates for Brokered Lists
Inkjet Addressing Fees
Insertion Charges for #10, 6×9″ and 9×12″ Envelopes
Metering Charges
Hand & Machine Application of Stamps
Self-Mailer Processing Fees
Plus, many, many other services & Products.

Click here to download the complete Table of Contents for this just-released study.


Printers Praise New Digital Pricing Study

Below are just a few of the printers who have praised the value of our latest industry report, “The 2019-2020 Digital Color Pricing Study.”  You’ll find the very latest info on pricing digital products and services when you dive into this new study. Many printers have admitted that after studying the report, they were either over-charging or under-charging for products such as envelopes, rack cards, newsletters and carbonless forms.

The new Digital Pricing Study is quickly earning its reputation as a “must-have” study for firms relying more and more on digital printing as a major source for their income.  NPRC’s newest report features the very latest info on pricing more than 16 digital products. Visit our Bookstore for further information about this brand new report.

I was undercharging on envelopes…

“I always enjoy receiving the pricing studies and I learn something every time.  I have been doing printing for over 45 years and still learn how to price things better.  Through the Sweet Sixteen pricing study, I learned I was undercharging on envelopes (which surprised me) so this will more than pay for the cost of the membership and Pricing Study.”

Wayne Clark, Graphics North Printing
Fairbanks, AK

Keep up the good work…

“John, thank you for all your work in providing the printing industry with the “Sweet Sixteen” Digital Color Pricing Study, and the many other studies you have published for us for so many years. It always helps to know where we are at and not to leave money on the table. Keep up the good work.”

Arie Teomi, Lasting Impression Direct
Cleveland, OH

Knowing our prices are reasonable…

“I always look forward to receiving your reports, particularly the pricing studies. They’re my best source of data to be sure our prices are within a reasonable range, and the best confidence-builder I’ve found against buyers who say our prices are too high. Knowing our prices are reasonable means I look for better prospects, rather than caving on prices.”

Steve Blatman, Ink Spot Printing & Copy Center, Inc.
Frazer, PA

Confidence that our prices are fair…

“Your studies have been a big help in keeping me in business for more than 28 years. I have used the industry pricing studies over the years to make sure our prices are competitive and adjust where necessary. This gives our customer service representatives confidence that our prices are fair and reasonable. I cannot understand why many more print shop owners do not take advantage of these valuable studies, especially when they can get them for free with just a little effort.”

Mike Geygan, Minuteman Press
Lebanon, OH

The study gives us information… to stay in business…

“I want to thank you for including my firm in your annual pricing study. Even though my company is extremely small, the study gives us information necessary to stay in business. Unlike the bigger companies, which can try random pricing strategies, we need to only use fact-based strategies which the pricing study provides each year.”

Ralph Dunavant, American Printing & Promotions
Manassas, VA

This information has helped me be sharper in our pricing…

“I have been participating in your surveys for more than 20 years. As I look back over those years, I realize that I have referred to your surveys more than any other source of pricing information in the printing industry. It is concise, accurate and timely. I would have to say that this info has helped me be sharper in our pricing, win more bids and make more money. Thanks so much for your efforts.!”

Jon Robson, Auburn Document Centre
Auburn, NY

A fantastic job well done…

“John, thank you again for a fantastic job well done. We eagerly await each of your studies, as they are crammed full of helpful insights, sage advice, and of course ‘real-world’ data and pricing information. Your studies start to pay for themselves from the first page!”

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