Is Your Printing Contract Working Against You?
The first installment of this series, “Print Contract Negotiation In-Depth” (in the March issue of Publishing Executive and online in the “manufacturing” community on PubExec.com), focused on some of the essential elements of a printing contract. This installment will address whether or not your contract is actually working for you or against you. What purpose does it serve?
A publisher makes a commitment in time, and a printer makes a commitment in price. It’s critical to determine if those commitments balance. In other words, is a publisher’s willingness to stay out of the market and stick with one printer equivalent in value to a printer’s price proposal, including some controlled method for escalating prices over time?
For the last decade, the cost of printing magazines has been decreasing. Prepress technology and streamlined workflows have carved away fixed costs. Faster presses, wider webs and new technology have cut the cost per printed page by about 60 percent in the past 10 years. Even binding and mailing prices have dropped—by roughly 30 percent—in response to yield improvements.
In such a marketplace, a print contract that allows for price increases is pretty much the opposite of useful. No publisher wants to sign a contract in order to overpay in a few years. The goal is to secure an especially competitive rate today, in return for a commitment to a printer for the future. If the good prices don’t endure, it is foolish to sign the contract.
In fairness, even the printers didn’t want things to work out this way. Prices weren’t supposed to drop rapidly while existing contracts were upheld at the original, higher prices. But a soft market forced printers to furiously sharpen their pencils, and for as much credit as new technology is due for lowering prices, sales desperation also must be thanked.