Proper pricing is the most important component of a successful printing business. Each printer has his or her own overhead (rent, utilities, insurance, and the like), startup costs, and financial obligations, and all of these things affect pricing. Nevertheless, there is a general range of acceptable pricing for letterpress printing—acceptable here meaning a price that the market will bear and that is within the range of other printers’ prices.
Market pricing can be determined by applying a simple formula:
Cost of Materials + Markup + Overhead + Printer’s Hourly Wage = Cost of Product or Project
Cost of paper, printing plates, ink, shipping, office supplies, your wage or that of employees, rent, electricity, insurance, and taxes may not appear on the estimates you send to clients, but should nevertheless be included in the total price. You should be aware of all the costs of doing business and plan your pricing strategy accordingly.
The difference between your costs and the price at which you sell the work is the profit. Ideally, your business will make a profit, which will provide the capital to grow your business, buy new equipment, hire help, and so on. If you build a living wage for yourself into the cost of your printing, you will ensure that you’re not working for free and that you will be able to pay your personal expenses, even if a given job or jobs aren’t profitable.
To increase your profit margin—that is, the amount of money between your production costs and the price at which you’re selling your printing—buy the materials needed in production at as low a price as possible, buy them in bulk (i.e., from a wholesaler), and stock items that you use frequently to reduce shipping costs, below-order minimum costs, or other costs associated with reordering. Consider having one or several house stocks—stocks that you keep on hand that aren’t ordered for a specific job—so that paper is on hand when an order comes in, a full range of the Pantone primary colors of ink, and other supplies so that you don’t face a last-minute, and sometimes expensive, pre-job scramble.
Print pricing must be fair, competitive, consistent, and within the range of current letterpress pricing. New printers often under-price their work, thinking perhaps that a) they need to enhance their portfolio of work, b) they will increase their prices when they’ve gained more experience, c) they feel a sense of guilt over the relatively high cost of letterpress, or d) they think lower prices will mean a higher volume of sales, or repeat business. Work must be priced without regard to the experience level of the printer, since their clients will expect work that is as good as that of a more expensive shop.
While there is nothing wrong with offering introductory prices as an incentive to new customers or offering sale prices to existing ones, new printers should be wary of undercutting their competitor’s work. Undercutting is knowingly pricing yourself below those you perceive as your competition in order to attract business. Doing so decreases the value of letterpress as well as the printer’s time and experience, and ignores the tangible and intangible value of letterpress-printed work. It also attracts a clientele who are actively looking for bargains and not those who are interested or able to pay what the work is worth.
The reverse of undercutting could be considered price-fixing. Price-fixing is an agreement between competitors to sell their goods for a fixed, or pre-determined, price, be it artificially high, at market rates, or below market rates. Currently the wide variety of pricing in the letterpress industry precludes price-fixing.
When getting started with a printing business, whether you plan on printing greeting cards for retail or jobs for others, research pricing as much as you can to establish the median pricing for what you plan on selling, and to give yourself an idea of the high and low price points in your market. Research your target market as well as who your competitors are—whether they be local printers or printers doing work that you would also like to do—and price within their range.
Retail pricing uses the same strategy discussed above of buying materials wholesale and adding a labor cost and a markup. But since the products are to be resold at a higher retail price, the printer’s profit margin is much smaller. Retail is the price intended for the end-user, or someone who does not intend to re-sell the goods. In order to make the print runs most efficient and maximize profit, larger print runs are preferable. Longer print runs benefit the client as well, as he or she will wind up paying less per unit, therefore making more on the resale of each piece. Letterpress cards for retail tend to be more expensive than other cards given the expense of materials and labor involved in their production, but when we consider that a $4 card must be produced for $2 or less, a run of 50 cards will not be profitable for the printer, though the client may prefer the smaller run.
Commercial (or job) printing pricing operates on a larger margin then retail pricing, as the quantities (i.e. print runs) tend to be smaller and so the cost-per-piece is higher. Purchasing your materials at a wholesale price allows you to mark them up to retail; If you buy your materials retail, you lose the ability to mark them up very substantially. The estimates you write for potential customers should show retail prices, not wholesale.
The custom nature of commercial printing also increases its cost; each job must be set up and run individually, and its materials arranged and ordered separately, and custom ink, plates, and finishing all affect the bottom line. In spite of one’s best efforts and planning, though, some jobs aren’t profitable because the overage was more than expected or more paper was needed at the last minute or costs were under-estimated. The goal is to make most of your work profitable so that your business will thrive.
Efficiency is money in job printing, but that doesn’t mean that your printing can be more expensive if you’re running a slow treadle-powered platens rather than a speedy Windmill. You may opt to bill clients per-hour, with your materials costs built in to that price, or per-job, with your costs and their specs itemized, but either way the same guidelines apply: know your costs and the prices of your materials, know the going rate for similar jobs, and pay yourself a wage. To clarify:
- Billing Clients Per Hour means that you know or can estimate precisely how much setup, makeready, press, wash-up, and finishing time a job takes, and all your materials costs are included in that hourly rate. But many printers who bill hourly also have a fee minimum, so that they are able to make a profit on quick jobs. For example, a 250-quantity, one-color business card job might only take an hour to produce from start to finish, but if your shop’s hourly fee is $75, that price does not cover your materials costs or likely meet the going rate for 250 business cards. But if your shop’s job minimum is $250, you will likely still profit.
- Billing Clients Per Job means that the specifics of the job will change the total price. Some printers may itemize every part of the process—makeready, paper, plates, ink changes, etc.—and tally these up for a final price, and some may list the specs of the job, and fold all their costs into that line item. For example, the same 250-quantity, one-color business card job might be listed on the estimate as:
- Business cards, 3.5×2, 1 ink, 110#c: Plates, $80; Paper, $25; Custom Pantone, $20; Press Time: $75; Wash-up, $15, Trimming: $10 Total: $225, or
- Business cards, 3.5×2, one ink, 110#c: $225
Pricing fine-press books and editions of prints