Archive for August, 2010

It is not unusual that someone, who may not be familiar with printing or marketing, expect that the total price of a printing project adjust congruently to the adjustment of quantity. As an example, the thought would be that if you have  a particular total price and quantity, cutting the product quantity in half reduces the price in half.

Unfortunately, that is simply not the case. In the world of printing, there’s really no such thing as half the cost for half the product. The pricing per unit always go up as the quantity goes down, and vice versa. This is due to the fact that there is always a setup cost built into the pricing that people often forget about. Every run has a setup cost that may include the actual setup of the printer, overhead items such as leases and utilities, payrolls costs , etc (in other words, the expenses that keep the lights on). Because of this, the setup cost rarely changes until the printer’s internal business environment changes.

To help understand how the same setup charge within every print job effects pricing, here is an example with rounded numbers:
Setup cost: $300
Cost per unit: $1
Quantity 1000 total cost: $1300 ($300 setup + $1000)
$1300 divided by 1000 equals $1.30 per unit
Quantity 500 total cost: $800 ($300 setup + $500)
$800 divided by 500 equals $1.60 per unit

You can see above that this is definitely not half the price with half the amount of product.

Setup costs are always built into the pricing. In other words, you very rarely see setup charges as a separate line item on an estimate. This is because clients would naturally want to negotiate that pricing, but that’s not necessarily a charge not can be negotiated due to business limitations.


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