A Fresh Look at Buying Paper
Many publishers who lack significant staff expertise in paper purchasing tend to think they are incapable of buying and supplying paper. They think it is easier to let the printer supply it—and they may be right. Yet, they may be wrong.
If you currently buy paper from your printer and have been wondering if it would be beneficial to supply it instead, the following will help you determine what is best for your organization.
Who should supply paper?
Determining whether you should supply your own paper depends on the amount of paper you use. In general, you need to use at least one truck or trainload of paper (or approximately 40,000 pounds) per issue to make supplying paper worthwhile. If you use less than that, you will either order less-than-truckload (LTL) at a higher price or store excess (inventory) at the printer, also for an additional fee.
It also depends on your frequency. Publications with quarterly or less frequency may incur expensive storage, handling and insurance fees.
There are also financial considerations. When you buy and supply paper, you are required to pay for it before you use it, whereas a printer bills you after usage, plus you get 30 days more to pay for it. Inventory is “dead money.” It doesn’t earn interest while sitting on the floor, so minimizing inventory is a goal.
The market is also a factor. A tight market requires more inventory, and publishers find their allegiance to any paper supplier crucial. However, only twice in my nearly 30 years of buying paper have I experienced a tight market. Lately it has become very easy to supply paper without inventorying excessive amounts—if any at all.
Dermot Burke, a paper broker at Gould Paper Co. of Maryland LLC in Davidsonville, Md., recommends, “Any magazine publisher who spends more than approximately $800,000 annually on printing should take a close look at customer-supplied paper … because the financial benefits … outweigh the disincentives that can be applied by the print vendor who would lose the paper business.”