Clearing the air on digital print prices - Magazine article

The market for digital colour printing covers a lot of territory, but there are two extremes from the sell price point of view. At one end are print shops that sell less volume but at higher prices. At the other end are shops that sell higher volume at lower prices. Needless to say everyone aims to sell as much volume as possible at high prices, but you can clearly discern the different business strategies of the low-volume high-price shops which we will call LO-VOL, and the high-volume low-price shops which we will call HI-VOL.

These are two different business strategies, and they both work. There are highly experienced digital shop owners who have been in the HI-VOL market for years. And they do very well. Very well. These people know their business and they have tailored their equipment and work flows to suit. So far as I know they all use the high end of the Xerox range of colour boxes. They smooth out all bottlenecks in production, they ensure that skilled staff are available at all times, they have out-of-hours service contracts, and they produce colour copies like you wouldn't believe.

Digital creates new markets

The HI-VOL people are targeting their own market, which is a different market to the LO-VOL people. HI-VOL is aiming at replacement of short run offset, and I believe they have been creating a new market for colour print which never existed in offset printing because of the cost of film and plates, or CTP, and especially make-ready. I believe that for probably at least five years a new class of colour printing has been produced, that would never have been produced on offset. So the HI-VOL shops are partly creating a new market.

If your shop is LO-VOL and you are averaging better than $2 per SRA3, or 50 cents an A4, then you are obviously satisfying your customers, and as one correspondent said, your operators are less stressed, the box doesn't get flogged to death, everyone is happy, and you are making nice profit on maybe a quarter of the volume. That is brilliant, and long may it continue. There really are lots of shops out there which do colour copies as a value-added component to higher priced products. I have some of these shops as customers of our software, and I admire the way they do business. I love to see high sell prices, it makes me feel good.

But, and it is a big but, this is not the only way to make a quid from colour boxes. There really are a lot, or to my personal knowledge, at least several shops, that make a very good living with highly efficient production of HI-VOL copies at the lowest possible prices.

For your eyes only

I do not personally affect prices in the colour copy market. This magazine is read by the trade only. Your customers are not going to see my predictions of the drop in colour copy prices, and if they do I can't help it. I am reporting what I find and hear in the digital marketplace. And I tell you that A4 colour copy prices are approaching 10 cents at the absolute bottom of the price range. I don't say this to bring gloom and doom, or to enrage people as the last column did to at least one major Sydney player, but to let you know where the HI-VOL market seems to be headed. If your shop is LO-VOL then beauty, you don't have a problem, but if you are paying 18 cents per A3 click for service and toner, then you better be in the LO-VOL market or you are going to have a problem. Worse still, if your supplier is charging you per A4 click rather than per A3 click then you will have a serious problem if you are not in the LO-VOL market.

I personally doubt that 10 cents per A4 could be profitable at present, but I could be wrong, as I have been in the past. There are some very smart people in this business.

But putting all that aside, please be assured that there are a number of HI-VOL shops that can profitably sell digital colour at prices that would make your hair curl.

Ian Maclean produces the CostMaster MIS for print shops and also consults to the trade. You are always welcome to contact Ian on 0411 426 215 or ian@costmaster.com.au