Thinking Ink: 4 Ways To Cut Costs
Controlling the cost of ink might seem like hoping to change the weather. After all, your printer makes the purchasing decision, and the ink manufacturers manage the rising costs in petroleum, pigments and chemicals. As an end user, you’re at the end of the chain, but there are four ways to tackle this cost element.
First, consider the gap between the price to the printer and the price to you. The impact of the markup is negotiable at contract time, even when renewing. Because printers have latitude in this area, it’s always worth challenging ink prices for concessions. To a printer, markups are found money, and he might prefer to find you as a customer instead.
Discerning the markup itself isn’t easy, largely because printers go about buying ink differently. Large printers purchase in big volume and achieve discounts that are initially designed to improve their margins. As a negotiator, you want the printer to see the need to share his competitive advantage with you. The great ink deal a large printer has made can be more valuable if it secures business for him, so play that card. Some printers make their own ink, and this bit of vertical integration can be another source of pricing flexibility.
Even with all this in mind, it’s hard to know what the prevailing price should be. You won’t get a lot of help by comparing quotes, for printers vary on more than their markups. The spread you’ll see may not only be a reflection of markup, but also an expression of the printer’s pricing style. Some printers consider reselling ink a little profit kingdom in itself, and others see it as a necessity of doing business.
To understand the printer’s methodology, you can’t look at the ink price per page alone. Try combining the presswork run rate for a 32-page signature with the price of 32 pages of process ink. Compare these aggregate rates for all your bids, and you’ll see if a given printer is trying to lure you with eye-catching ink or presswork rates that are counterbalanced by the other cost center. Combined ink plus presswork rates tend to be much more similar across a set of quotes.
That doesn’t mean there’s no difference between two printers with similar combined prices. Because ink prices are not controlled by your contract’s escalation provision, but will rise with changes in actual costs, the careful publisher will accept a slightly higher presswork rate if it’s the route to the lowest ink price possible.
Appraising your ink usage
Once the contract is signed, there are still areas for ongoing cost control. The gap between the printer’s cost and his price to you is a lot wider than just the markup. The printer buys ink by the pound and sells it by the printed page, and the correspondence between the two is anything but exact.
When formulating your ink prices, a good print estimator looks at your magazine to assess the amount of ink coverage your publication requires. If it’s heavy on text, overall ink usage is low and deserves a favorable coverage estimate. This is not a question of putting pressure on a printer, but of letting the work create a justification for a price change.
There are three typical reasons an initial coverage estimate is too high. First, the estimator may not take into consideration the actual editorial and advertising content. Medical, scientific and technical publications almost always deserve a lower-than-average ink consumption rate, but so do some consumer and trade magazines. Give your pages an honest appraisal, and if they look light on graphics, make sure the printer takes it into consideration.
Second, seeking an ink reduction is always appropriate when the printer has a track record producing the publication and can compare actual usage to an initial estimate. A significant change in art direction can trigger a favorable review as well, but most magazines evolve toward an increase in graphics, entailing more ink, not less.
Save Ink, Save Money
The third point contains some good news: Two techniques for improving color fidelity just happen to save ink. If your color separations utilize gray component replacement (GCR), cyan, magenta, and yellow are reduced, with black forming a larger proportion of the printed dots. Because black is the least expensive process ink, GCR is a technique for saving money as well as improving color fidelity. Almost all separations rely on a certain amount of GCR, but the baseline percentage is usually conservative, and could be nudged up.
Using less ink to produce the same printed result is also possible with stochastic screening. This screening method replaces the dot structure of a conventional line screen with a more random array of dots, constructed based on frequency modulation, an analysis of density. Moving to stochastic screening requires close coordination with your printer, and will require you to make and review proofs quite differently. Those beloved, traditional halftone dots are gone, and only a printer with experience using stochastic will perform well with their successors. Both of you will be happy with the drop in ink usage.
When ink’s raw materials increase in price …
The final aspect of controlling costs is surviving ink-manufacturer price increases. Ink costs have been rising lately, and oil-price increases get the sound-bite blame. Petroleum derivatives make up a major part of ink’s raw materials, particularly the carbon black in black inks. But the economic dynamics of ink costs include a broad array of supply and demand forces affecting chemicals and pigments. As an example, consider acrylic acid, a key component of UV and water-based inks. It so happens there’s been a big spike in demand for acrylic acid, because it’s the critical ingredient in super-absorbent diapers. That’s what we’re up against, print buyers.
If ink manufacturers face some serious pressures from cost increases in their raw materials, they also must navigate the current ink overcapacity that limits their pricing power. Printers are sometimes successful at resisting a proposed increase, or at least blunting its degree. The smart print buyer also knows that an announced change in price from ink manufacturers doesn’t immediately translate into a price hike and should never be taken at face value.
Although a printing contract allows for changes in actual costs of materials and services supplied by third parties, the contract can stipulate that the change doesn’t affect your costs until these products are first purchased by the printer at a change in cost. This can leave quite a delay between the announcement of a price increase and its impact on your cost, so be sure the printer’s biller is reading invoices, not press releases.
Finally, bear in mind that a manufacturer’s 12-percent ink-cost increase shouldn’t hike your prices by 12 percent. Inside your per-page cost is that printer markup, which should remain static. If your contract provides for a price audit, a third-party accountant can get down to the nitty-gritty and verify the legitimate price adjustment. If you don’t want to use such a high-handed approach, you can reasonably ask the printer to make a concession that reflects only the increase in his direct costs.
Ink is easy to take for granted and never forms a large percent of your total manufacturing costs. But it’s worth watching closely, because your printer is an effective ally in controlling the cost.
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.