Wednesday 21 October 2009

Recovering your costs

My pertinacious friend Norm was clucking over a competitor's quotation during our last meeting. "Look at this", he chortled. "He's done it again, underquoted on the job to try and nick more of my business..." He nearly choked on his coffee, adding "It's helpful that this customer shows me any competition I might be up against."


I asked Norm if he was going to cut his price to get the job. "Not on your Nelly", he replied. "My customers know what they get from me, a good service at a sensible price. That's what I sell."

"This is a nonsense", he went on. "Two months ago this printer sacked its salesman for lack of return. I know. The man came to me for a job afterwards and I checked him out. Looks like the new one is up to the same trick."


"It's simple", he explained. "Your salesman cuts the price by putting a very low margin on the paper, laminating or other external costs. You win the job, but the commission cripples any real profit left."

I asked him if there was any way to safeguard against such occurrences. "Of course there is", he retorted. "It's the added value you should pay the commission on, not the invoice total. And, even if you don't have a salesman, any sensible printer must recognise that the risk is huge if the job goes belly up. Too many printers go bust through risk alone."

My next question seemed to excite Norm even further. I naively asked him how you cut out risk in printing. "Just recover your costs properly over every activity. It's not rocket science! Even the best printers go under if they're bad businessmen"

I didn't ask him if he was a good businessman. Already he had his jacket half on and was making for the door.

It's a funny old game, printing, isn't it?

(Why not try the best system for ensuring your profitability and cutting your risk? It's Printpak. You can even download a free copy . We know your business. And what's more, we do our best to make sure you do too!)

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