Master Manufacturer: 7 Tips for Analyzing Printing Prices
When comparing printing bids, it’s not enough to find out which price is lowest. Because your specifications will vary from issue to issue and because the price of raw materials will rise or fall outside your printing contract, you need to know why one bid differs from another. Here are some calculations that will help you understand the pricing philosophy of a printer. Use them to launch your negotiation, so the printer’s prices can better fit your publication’s printing requirements. 1. Print buyers are now comparing as many as five different presses—a mini web, half web, 4x2, 6x2 and 8x2. Throw in one of those 4x3s and you have a full half-dozen. Instinctively, we know that the larger the press, the lower the running rate and, potentially, the higher the makeready. To understand an individual printer’s price approach, and then to compare it with other bids, turn all the running rates into a cost per page per thousand (M) to see the efficiency discount that the printer assigns a larger press. You may discover that some printers try to even out all their equipment for a nearly uniform cost per page, while others express either a premium for inefficiency on a small press or an incentive for efficiency on a large press.
2. Next, find out how useful that efficiency really is for your magazine. Pick your most typical press run and calculate the total cost, makeready plus run, for the largest signature from each press. Divide by the page count for a total fixed and variable cost per page. Does a high makeready make the 8x2 less of a bargain? Is the printer pricing a new press at a higher full cost per page than an older one, despite the page yield? Are there steep peaks and valleys between the most efficient imposition and the least—and how often would your page count make you buy uneconomically?
3. With a variety of presses on the price schedule, you also face questions about when it’s cheaper to print, say, a 16 2-up using a double web 4x2, versus a single 16 on a single web. To solve problems like this, and also analyze the range of 6x2 versus 4x2 combinations for page increments like 24s and 40s, you need to locate the convergence between makeready and run prices. Find the difference between the two makereadies and the two run rates, then divide the makeready difference by the running difference. This is the quantity, in thousands, when the two press approaches would be equal. If your typical count is higher, then you want the lower run rate. If it’s lower, go with the lower makeready of the two. By the way, printing estimators sometimes don’t run this test and occasionally produce pro forma invoices with a more costly imposition selection.
4. The three calculations above are useful to perform with paper costs included. Do them once to analyze the press pricing concepts the printer is espousing, then add in paper to see the impact on your total costs.
5. Printers vary a great deal in how they price ink, for reasons that are too complex to discuss here. But you want to avoid either being seduced by cheap ink or miffed by apparently costly pigment. To see how the ink price really integrates with the printer’s overall offer, combine presswork and ink costs for a full signature on a per M basis. You may discover that highs and lows offset each other, and two printers may be closer than they appear.
6. Another combination that may shed some light on analyzing printing prices is fusing binding run rates with addressing rates. Unless your publication is either all newsstand or on co-mailing equipment, the binding line runs in lockstep with ink-jet or paper labeling. It’s not unusual to find very low mailing rates combined with high bindery costs, and vice versa. Printers themselves have a hard time tearing these costs apart to see where efficiency may lie, so addressing and binding prices are often extremely different from vendor to vendor. Before you decide which vendor is truly high or low, put the two rates together for a typical pocket count and see if the differences between vendors persist. Then you can negotiate either price component, but with a clear eye toward what a realistic total should be. (A note: Moving your subscriber copies to a co-mailing program is a lot more important than negotiating a good addressing price.)
7. Know how to calculate paper running waste to compare and negotiate one of the largest cost levers in a print bid. Running waste is the percentage of the difference between the printer’s contractual pound allowance and the physical requirements of the press in cutoffs. A cutoff is the paper required for a single rotation of the press. The paper-roll width determines one dimension, and the press-cylinder circumference defines the other.
Since the press cylinders must complete a rotation before they can repeat the impression from a plate, the cylinder circumference represents the depth of a cutoff. The roll width can vary from job to job as the trim size changes. In addition, printers vary in their requirements for binding and trim allowances, which also affect roll width.
On a 4x2 press, a cutoff represents a 16-page signature in a typical magazine trim of 8-1/8 inches by 10-7/8 inches. For a tabloid or digest trim, the number of pages yielded will be different, but the concept of a single press rotation equaling a cutoff is the same.
The basis weight of a paper stock actually does tell you how much something weighs: 500 sheets of the stock at a particular sheet size weighs in at the basis weight specified. Text papers are specified with a basis-weight dimension of 25 inches by 38 inches, while other types of stock use different basis dimensions.
If a press signature was exactly 25 inches by 38 inches, 1,000 sheets of 45# paper would weigh 90 pounds. To adjust for the difference in basis dimension against cutoff dimension, use this formula:
[(roll width x cutoff) x (2 x basis weight)] / (basis width x basis depth)
Try the formula using these sample specifications:
• 33½” roll width
• 22¾” cutoff
• 40# paper
• 25 x 38 basis dimension
[(33.5 x 22.75) x (2 x 40 )] / (25 x 38) =
(762.125 x 80) / 950 =
60,970 / 950
Result: 64.18# per thousand cutoffs
If the printer’s contractual pounds are 69.96#, that’s 5.78 pounds more than the required cutoffs, or 9 percent running waste.
By the way, makereadies are also useful to study as the number of thousand cutoffs they represent. With this same example, a makeready of 385 pounds is equal to 6,000 cutoffs (385 ÷ 64.18 per M).
With these seven calculations, you can get a clear idea of not only how, but why one printer’s bid differs from another’s.
And there’s a great tiebreaker, in case grand totals are especially close: The printer with the lower paper waste, in running or makeready or both, is almost always the better deal, as paper prices can rise many times during a printing contract, while manufacturing costs would be constrained by an escalation provision.
Even if you don’t have bids to compare, try running these calculations on your existing price list to get a better understanding of what makes your print prices tick.
Alex Brown is a consultant to magazine publishers specializing in manufacturing and magazine management. She founded her consulting company, Printmark, in 1984, and is a frequent speaker at industry events.