Mar 9, 2022
Profitability, growth, and maximizing revenue drive the setting of prices, but there is no exact science on how to price various print jobs. As competition intensifies and economic growth challenges loom, profitability remains a top consideration for print shops. How can your production team increase your profit margins by understanding more about pricing your services? Read on to find out how Milner can help increase your company’s profitability.
Before you can understand if you are correctly pricing any job, you must understand your costs. Many companies have no way of tracking job performance without the right integrated print technology in place, making it difficult to see where profits are coming from and where resources are being wasted. What you decide to charge for your printing jobs is a direct reflection of how you want to convey your value within the commercial print industry. And your customers know it too – if you price your jobs too high, you may lose customers. If you price too low, it is you who suffers. Print MIS and ERP systems help eliminate this struggle over pricing strategies by doing two things: Leaving you with an effective pricing strategy and estimating process that takes out the guesswork and leaves you with the data-driven understanding of why you price things the way you do and the assurance that you will maximize your profits.
Although you might think that every customer is a profitable customer, as you explore pricing and how it affects your bottom line, you will notice that the type of jobs you choose to produce can have a substantial impact. Make sure you produce the type of work that fits both your equipment and company culture. If your business has a habit of simply taking any job that you're capable of producing, you end up letting your clients dictate the work that fills your business – which can have the unintended effect of leading to commodity pricing. When you take on too much work that is not a good fit for your business, your profit margins may be significantly reduced.
It is therefore critical to learn how to center your business around the services that your customers require from the right type of customer. By focusing on one specific market, you can improve your production department's efficiency, ultimately helping you build increasingly profitable relationships with your client base.
The key to making your printing business more profitable is to analyze the services you currently provide to your clients. This is to determine if they are profitable or allowing you to increase your profit margins. In addition, determine where and with whom to spend the most time and effort to ensure you get the greatest return on your investment by producing the right types of jobs.
Start by evaluating what your target clients expect, and then review how efficiently your facility can fulfill those needs. Determine what your business does best and if the majority of your clients are asking for this type of production. What are the jobs that you think are most ideal for your business? Can you remain profitable without taking on work that interferes with your ideal jobs?
To answer these questions, you'll need to take a hard look at how much visibility you have into the total cost of any print job. Are there places in your systems flow or technological capabilities that leave room for better efficiency? Streamlining these processes could not only help boost efficiency, but also give your company razor-thin margins.
Estimating is the one thing you're doing that probably has the biggest impact on your profits. It may seem obvious, but despite the fact that it is vital for printing shops to have accurate estimates so they can balance the risk of cutting into profits by underestimating and losing business due to overestimating, it's estimated that less than half (46%) of commercial digital printing businesses knew exactly how much each digital print job contributed to general and administrative overhead.
2. Inventory management
Many companies don't have a thorough understanding of their material usage and wastage, which is a problem since these amounts can make or break your overhead. It is important to keep track of raw print materials, logistics, and shipping materials as part of a holistic understanding of your inventory.
3. Production scheduling
There are still many print shops that rely on spreadsheets or a first-come, first-served system of scheduling their workflow. Ultimately, this can lead to confusion, customer frustration, and missed delivery dates. To ensure optimal operation, jobs should be scheduled based on dependencies for efficiency to reduce ink and paper costs.
Keeping cash flowing and collecting payments can be difficult when you have to manually generate invoices, ensure accuracy, and then track whether payments have been received and deposited. Mishandling invoices and funds can not only damage your business but also reduce profits.
You can significantly impact your print business and bottom line by implementing centralized print MIS/ERP software. Print Management Information Systems (or Print MIS) combine and manage all day-to-day operations for a print business enabling business leaders to identify opportunities and where profits are being lost. In addition to offering many features and flexible options, print MIS systems are either cloud-based (ensuring access to your print operations from anywhere with an internet connection) or on-premise. You can reduce the potential for error, save time, and experience a smoother workflow when you combine all your print operations into one system.
With capabilities such as Web to Print, Print MIS, job management, and batching, Milner can help you automate production processes to boost efficiency. We ensure the highest quality with the lowest operating costs by evaluating and designing your workflow. Streamline your payment and billing process from marketing to order placement with help from Milner's Production Print team of experts. Contact us to talk to an expert about setting up your next-generation production solution.