Population Plays Minimal Role in Pricing

Published Nov. 15, 2021

Pricing Practices for #10/24 1-S Envelopes
Varies Little When Based Upon Population

By John Stewart, Executive Director, NPRC

Once again, before we begin our formal report on the results of our latest survey, we would like to thank the owners of 115 printing firms who took the time to complete our most recent survey. Without their support and participation, detailed surveys such as this would simply not be possible. The data below is provided absolutely free to the industry in hopes of encouraging greater participation and appreciation for the contributions made by NPRC to this industry.

 NPRC has just released the results of its latest mini-survey dealing with the pricing of 1-C and 4-C envelopes. The survey was launched on Nov. 9, 2021 and closed on Nov. 11th and attracted 115 participants. The survey covered pricing practices for producing digital and offset #10/24 Envelopes.

This survey tackled pricing two quantities of envelopes, 500 and 1,000, for #10/24 regular envelopes, 1-S, printed in black and/or 4C. An additional breakdown for pricing asked for pricing for “digital” vs. “offset” printing. Below is listed both average and median pricing for these four breakouts.

An ancillary question for pricing envelopes regarded the preferred method used to produce these envelopes. When it comes to producing envelopes in black ink/toner, 61.2% of respondents indicated they would produce these envelopes digitally, while 38.8% said they would be produced via offset.

However, when it comes to producing 4C envelopes, 96% of all respondents indicated they would rely on digital devices, while only 4% said they would rely on offset. Consequently, the vast percentage of pricing reported below (at least as it applies to 4C envelopes, represents prices for digital production. In fact, approximately 33% of our respondents told us they no longer have offset presses in their operation.

“Approximately 33% of our respondents told us they no longer have offset presses in their operation.”

Requested delivery time? Our mini-survey also asked participants if the customer placed the order “on a Monday, and would like to pick up the envelopes on Thursday mid-day, how
would they characterize this delivery request?”

Provided with four choices, this is how our or respondents answered:

  • We would easily be able to delivery this job as requested… 75.8% (86)
  • Would be tight, but doable… 21.% (24)
  • Delivery job under this time-frame would be a significant challenge… 1.8% (2)
  • We would have to charge an additional fee to meet this schedule… 1.8% (2)

Population Density Extractions

One new extraction we used for this analysis is the ability to analyze envelope pricing based upon population densities. We’ve often argued, contrary to popular opinion expressed by many printers, that pricing varies far more within individual markets than it does when comparing pricing from one market to the next, especially when analyzing markets based upon population density.

Often overheard statements such as, “I could never charge those prices in my market area” or “large markets can always charge more (or less) than I can get in my market” are common in our industry. So too is the classic argument, “My market is different.” The latter is often heard in any discussion about pricing.

We have argued over the years that there are far more similarities in pricing than there are difference between one market and the next, even when the discussions raise the topic of population density. Our basic argument has always been that the greatest variations in pricing are found within individual markets, and not from one market to the next.

We have consistently found that prices for specific products (such as 1M #10/24, 1-S, 4C envelopes) can often vary by as much as 30-40% within individual markets such as Stow, OH, or Lake Mary, FL. However, the average (or median) price for these products rarely varies by more than 10% when comparing one market to the next. Another way of saying this, is that you are likely to see far more variations in envelope pricing within markets such as Stow, OH or Lake Mary, FL than you are from one market to the next.

The opinions noted above are based on 30+ years of consulting, as well as assisting dozens and dozens of printing firms conduct their own locally based pricing surveys.

Thanks to a recently discovered Excel tool, we are now able to extract the population of virtually every town or city listed by our participants and analyze their pricing based upon that population. For the purposes of this analysis, we were able to extract the population basis for almost all of our 118 participants.

Next, we ranked the populations extracted from low to high, and then we divided our list into four approximate quartiles: 

Market Size Population Range Count
Rural 1,000-19,000 29
Small 20,000-69,999 28
Medium 70,000-199,999 28
Major 200,000-10 Million 23

With our new population tool in hand, we were able to analyze and extract average and median pricing for both black and 4C envelopes for each of four distinct population breakouts.  Below are two tables. The first one analyzes pricing for black ink for #10/24 envelopes for All firms, as well as those falling into each of our four population classifications.

The second table provides the same pricing but for 4C #10/24 envelopes. Generally speaking, notice how relatively little the average and median prices vary among the four markets noted.

#10/24 Blk Envelope Pricing

#10/24 4C Envelope Pricing

Despite vast differences in population size, note how relatively little pricing (both average & median) varies from one breakout to the next. Although sample size for each breakout is relatively small, we can assure you that even if we had 200+ firms for each population category, we would still have found only modest if any differences in pricing.

The graph below illustrates average and median pricing for 500 4C envelopes.

This graph illustrates average and median pricing for 1M 4C envelopes.

Conclusion – If you participated in our survey we want to express our appreciation. If you did not, we would like to encourage you (especially if you are a member of NPRC Listserv) to participate next time. We try not to overburden you with surveys, and our goal is to keep these surveys to no more than 5-6 questions on a very specific subject, whether it be pricing or more general in nature.

If you have any suggestions for a future mini-survey please sent us an email at: [email protected].

John Stewart, Executive Director, NPRC
Melbourne, FL 32904