Reaction to By-the-Sheet Pricing Proposal: What Are We Waiting For?

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My thoughts on the comments in the above well-written article

As to the issue of why b&w prints are priced higher in Europe than in the U.S., consider that, in the U.S., plans and specs are separate documents, and, generally (for the most part), plan sets are staple-bound (or screw-post bound) and rolled. In many countries in Europe (this especially applies in Eastern/Central European countries), plans and specs are NOT separate documents. Plans and specs (large-format and small-format documents, color and black & white documents) are in one, or multiple, binders, and all large-format prints, as well as tabloid size small-format prints, are folded and then inserted/collated into binders; the finished, bound-binder “set” is referred to as “project documentation.” Because of this, there is a considerable amount of manual labor that goes into “finishing” bound-binder-books filled with project documentation. And, that’s one reason why “black & white” large-format copying/printing has always been priced higher in Europe than in the U.S. (since many reprographers in Europe do not charge separately for the folding, inserting and assembly steps.) Comparing prices (for printing) apples for apples, U.S. apples are different than Eastern/Central European apples.

As to the issue of prices for Color CAD printing vs. B&W CAD printing, it is true that color CAD copying and printing is offered at lower prices in Europe than in the U.S.; this has been the case for years. But, the gap has been narrowing. It has also been quite common for “project documentation” in Europe to contain a lot of color documents, which has not been true of “plans” (or specs) in the U.S., and one reason for this, and I suspect the main reason for this, has been the “premium” that U.S. reprographers have been charging for color CAD copying and printing. Several years ago (when I was active in the reprographics business), the premium was 20x. I am aware, as Ed pointed out, that the premium multiple has dropped; 10x sounds about right.

As to the issue of Summary Invoicing, be very careful how you approach this. By background, I am an accountant. If you summary-invoice and don’t show unit prices and calculations on an invoice, there are many customers, in fact all who do audit invoices before approving for payment, who will have to do extra math to approve invoices for payment, and, when you cause customers to go through extra steps, they will not like that, at all. Most reprographers (I would expect this to be the vast majority of reprographers, offer special prices to individual customers; often reflected in the form of a proposal. Whether you offer per-sheet pricing, or per-sq-ft pricing, in your proposal, if that per-sheet, or per-sq-ft, unit price is not clearly shown on each invoice, there are, as I said, customers who will not like that – some will do the extra work, some will insist that you revert back to straight invoicing (rather than the summary invoicing method Tony spoke about), and some will question why you are not showing the unit pricing. If I was employed by an A/E firm’s CFO or Business Manager, or a consultant to that person, I would certainly urge that person to insist that unit prices (and calculations) be clearly reflected on each and every invoice. One invoice for each work order submitted. On the other hand, if your practice is to quote each order before it’s done, then you can “lot-price the invoice (lot-pricing, where you do not show, or have to show, the unit prices and calculations.) Customers who ask you to quote each job and know what you’re going to charge for each job, will be able to audit/approve invoices based on the quotes they received. In any event, if your method of summary-invoicing causes your customer extra work to audit/approve invoices, you are not going to be well thought of by the accounting team inside that customer’s organization. (Note: We experimented with summary-invoicing years ago, and discontinued that because of large number of customers who voiced complaints. We had a rule in our business; that being, never, ever should an accounting or billing procedure cause problems with customers.) Those who do adopt the method of summary-invoicing Tony suggested should be aware that competitors who find out about that will likely make that an issue with customers – saying “that method is their (XYZ Repr Co’s) way of hiding what they are actually charging for the work they do for your firm.”

Simply my opinion, 100% of reprographers should be charging for scanning when jobs are scan-to-print from hard-copy originals (or building the scan charge into the “first-print” unit price), and 100% of reprographers should be charging for file processing (per file) when jobs are file-to-print (or building the file-processing charge into the “first-print” unit price. We adopted that pricing methodology back around 2000 (if not earlier), and it was accepted, without problems, by the substantial majority of our customers. And, most of our competitors followed our lead and implemented the same pricing model.

Most of reprographers who added plotting services to their businesses back in the mid 1980’s know that plotting work, and prices for plotting, seriously eroded not long after HP released DesignJet plotters. Customers began to acquire DesignJet plotters because they could plot at far less cost in-house than the same plots cost when outsourced. If HP’s PageWide printers are able to print b/w and color at the same cost, and if HP does introduce low-end PageWide printers, do not be at all surprised when customers begin to acquire their own

Joel Salus more than 3 years ago

pricing models

Great stuff to discuss, thanks everyone.
A model that can be identified as LOGICAL and FAIR for our industry and our clients is needed, while everyone chooses their own rates.
I don't think we can add a fee for QC, however, we are committed to two things: A scaled, volume pricing structure for all our clients, even if its a 3-tier scale for our best clients. And, we highly recommend that the first print have a premium attached to it, in whatever form or terminology your market is comfortable with: First print, File set up, Pre-flight&Proof fee, whatever... Good clients who value your service and want you to stay in business can handle this. The others clearly are not as valuable to us and will not help you anyways, other than to help you remain static.

Joe Cushing more than 3 years ago

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