How much is too much when it comes to marking up jobs to be resold. The numbers that agencies and print shops use to mark up work they don’t produce can be a mystery and even to the ones working for them. I have worked at shops that used a double variable slide rule technique. This process does not include the all but forgotten “slide rule” that preceded calculators but the “I think we can get away with this amount,” rule.
The process would go as follows:
- Calculate the total cost of the job that was being farmed out
- Use a predetermined scale to cross reference the cost and its associated mark up. Example: Total job cost $2,650.55. Find the number in our mark-up table. Jobs between $2,500 - $3,000 would receive a 1.65% mark-up or $4,373.40 ($1,722.85 profit)
- Now if the company was deemed to be loose or not watch every penny, these numbers and the associated mark-up would escalate. I have seen owners and not so ethical managers disregard previous business mark-up tables and charge 3 to 4 times the actual value. These people would fit in well with the white pants and white belt world of used car salesman. Hidden in the invoice programs these companies use, are plenty of surcharges that ad to the total but never become listed as a line item. Box charges, delivery fees, digital imposition charges, specialty services and on and on. This added fluff becomes a necessity for ill run businesses.
- Aggravation factor. This process has two parts that are intently entwined. The first part deals with how much a customer or the company they represent is important to the firm doing the printing. Companies that are necessary for the survival of a provider may get a pass on additional charges. However, they are not immune to the increased mark-ups above. The second part deals with customers that have little chance of returning or do not account for much revenue over the year. An additional charge or aggravation factor may be assessed to theses accounts.
There is really no rule of thumb when it comes to pricing jobs that done or re-sold by providers. This is where it becomes especially necessary to do you homework and never allow complacency to enter the decision. I have seen too many large corporations that trust a provider and end up paying 3 – 4 times for business collateral than they should.
5 Tips to prevent overpaying for printing.
- Quotes - Get quotes from companies that specialize in the job that you are in need of. No provider can do it all and will always job out before they tell you they can’t provide something. This may not always be easy and it’s not always clear to what specialties a provider may produce or ones that he will job out. Due diligence is required here and these providers should be changed frequently to assure a quality mix of potential venders.
- Line Item - Ask to have separate line items for each part. Design or concept work should never be included in the printed price. You just might end up paying that design charges again and again when you re-order in the future.
- Mailing Charges – Ask for the postal statement and provide your own check written out to the post master. Do not allow your postage to be marked-up.
- Charges - Get all the charges up-front, this includes shipping, delivery or any other charges that may be added.
- Quantity – You never want to order more than you will ever use but some common sense here can save you thousands. Quantity discounts if you can combine orders with another branch or just ordering enough for the entire year can save a lot of expense. Ask for a discount if you increase your order or what is the next price break on each order.