“The printer today who is reducing prices to meet the persistent demands of the vast buyers’ market is making a mistake of his life. There was a time not so long ago when he could reduce a price on a job and make up his loss on “another one,” but these “other ones” are few and far between today, and the wise printer knows it”.

The price for printing is something that cannot successfully be tampered with.  If a buyer suggests that a printer must lower his price to secure an order, the following questions should be considered first:

Has the price of paper been lowered?
Has the price of ink been lowered?
Has the price of photo-engravings and electrotypes been lowered?
Has the price of trade composition been lowered?
Have wage scales been lowered?
Has the rent been lowered?
Has the rate of depreciation been lowered?
Has the overhead been lowered?
Has the cost of power, telephone, etc, been lowered?  

The answer to these questions is “NO!”  Therefore, the only reduction a printer can make is to his profit, and the man who knows his costs and knows the margin of profit he is operating on, soon realizes that he cannot afford to cut his price”.

The Printing Review of Canada - June 1931


79 years ago this appeared in Canada’s flagship printing magazine The Printing Review. Before television and before the world-wide-web, our industry faced constant pressure to maintain profitability. Yes - it can be said that there are similarities with today even when one realizes that there is even more challenges in today’s print medium.  When I listen to members of our industry, some still recite the same mantra of downward pressures on pricing, seemingly unfair competition with wild and crazy prices that don’t seem to make any sense.  

Perhaps going back further into history one would also read about challenges facing the industry all the way to the Washington press.  In 1931, there were plenty of opportunities to be profitable. Most establishments were running letterpress and had not the efficiencies of today’s plants and machinery. The search for margins has been around forever and will continue to be.

Today, we can learn that without keeping technological pace in better and more efficient equipment, many of us still battle the price vs. profit issue.  Lithography in 1931 was in its infancy. Colour was very expensive, Labour as a percentage of production costs, was even higher than today, as there were so many steps and processes.  In hindsight, knowing what we know today it seems like even though a Depression was in full bore back then, there were companies that worked a little smarter, ran their businesses a little tighter and most importantly, lowered the costs of print.  

Our industry faced with constant price pressures will have to drive print costs lower in order to remain affordable.  The new “web-to-print” concept has of course been a major cause of lower prices.  This concept takes what was a traditional bricks and mortar business and turned it into an almost self-serve arrangement. There is no more need to discuss higher quality because customers already expect and assume it is there.  Program created and formatted print direct to a printing machine, is what is being offered.  If your business still runs on a more traditional structure then look to make changes in a hurry.

Surprisingly, there are many offset presses running around the world that are unable to offer almost instantaneous print directly from files. In most (but not all) cases, the company assumes that if cylinders are turning or the press is paid for, it automatically means margin.  It does not.  

The machine tool industry has some similarities to print. Machine shops, especially general jobbing outfits have had to update in order to prevent work heading to other cheaper countries and competitors. The CNC machine tool center, for example, was at one time never seen in a traditional machine shop - just manual lathes a couple vertical and horizontal mills perhaps.  Lots of labour input. So, when the larger faster turn-a-round work came in, it could not be produced cheap enough.

Developing countries are making rapid gains on technology, too. During the last few years we have had the opportunity to supply higher quality, more advanced machinery to printing firms who don’t just want worn out cheap equipment.  These companies are well in tune with the fact they cannot subsist on a weak currency or low labour costs.  They must also expand their services and offer more print management services as well as print- for less than before. The world market is changing rapidly and countries like India and China continue to develop their print industries well beyond low cost production.  

As you consider what lies ahead and how you want to grow your business, think about technology.  Think about what can be learned from 1931 and how the same problems existed then.  Look to your pressroom and finishing equipment for clues on how they rate in terms of efficiency.  Maybe, just maybe, the guys selling for less are all not selling under cost but just selling under YOUR cost.  These same printers may also have been spending to expand the offerings they bring a customer. This could include services you don’t or won’t include.  

Finally realize that even though we may have more pressures today than 1931, the commentary taken from The Printing Review of Canada is not the message we as an industry need now.  Costs and productivity go hand in hand.  Just as we would laugh at anyone paying $400.00 for a color separation - so should we accept that our customers wouldn’t either? The message should say lower your costs with current level technology and processes.  Don’t dwell on the past. . . .  you might get run over by people only looking ahead.