Paper shortages mean you have to review profit margins
How are you managing higher paper prices?
Many people I talk to are trying to absorb some or all of the increases. They don’t want to raise prices for the customers.
But we are all having to absorb rising energy costs, higher food prices and many other increased overheads. Why should your customers be different? The printing industry should be educating users about the paper situation and showing them why they should be accepting increases.
What is the right price increase to apply to paper?
Some printing companies are passing price rises on, but at cost. This affects the overall profit margin of those companies. I would argue that this is the wrong approach. It is far better to keep your standard profit margin on the new paper price. Right now, your internal costs for ordering paper are probably rising sharply: it takes a lot more effort to find paper these days. It is important that this cost is factored in.
Some customers will push back. At this point you have the option to negotiate with them. But many customers will be aware of rising costs and be prepared to pay the extra. You will never know who will pay extra if you do not apply the full profit margin in the first place.
Will this lead to reduced print volumes?
Probably. But over-capacity in the industry is nothing new. Most printing companies will be better off managing slightly less work at a higher profit margin, especially if they can’t find enough paper at the moment anyway.
How do you find clients who are prepared to pay more?
My pdf book How To Stop Print Buyers Choosing On Price outlines a simple but effective strategy for selling to successfully to prospects who are the right fit for you.
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