The following eight procedures are used to estimate printing in
addition to or in place of the described cost-estimating procedure. The
most significant difference between these techniques and cost estimating
is that each is based on the selling price of the job. We define
selling price as the total dollar amount the customer will pay when the
job is completed. It is represented by the sum of all manufacturing,
material, and overhead costs, plus profit. Price Lists Estimating from
price lists is very common when the product line of the printing company
is standardized. For example, many fast print business, develop and
distribute lists of prices for the array of products they offer. Because
the work is standardized, it is much faster to utilize price lists than
to cost estimate each job individually. Customers also may use the
price list to determine the price of the work they are contemplating
prior to contact with the business.
Large printing companies that offer standardized products, such as
labels or business forms, normally develop a price list book that covers
literally all products they produce. This book is carried by each sales
representative, who has been trained in its use. When a customer
desires a price for a certain quantity and type of label, for example,
the sales representative is able to determine a firm price within a
short time. Quick price estimating is a tremendous aid in selling
standardized products. Of course, such estimating-completed in the
customer’s office under less than ideal condition-can be embarrassing if
an error is made or a price is misquoted by the sales representative.
Price lists are an extremely valuable estimating aid when they are
actually developed and updated and used only for the product lines for
which they were designed. In this age of increased specialization and
standardization in the printing industry, more and more estimating from
price lists is being done.
Pricing On The Basis Of Past Work
A common technique for estimating in the printing industry,
especially for a mix of products produced in the same plant, is pricing
on the basis of past work. Essentially, the estimator and sales
representative establish and maintain a file of past jobs that have been
profitably produced and for which production is geared. The salesperson
uses this sample portfolio during the sales contact with the customer.
Frequently, the client will select a product from the sample, with a
request for a color change or perhaps a slightly different page size.
Back at the plant, the estimator will pull the original estimate for
this job, review it, and make necessary changes to reflect the
modifications desired by the customer. The sales representative will
then return to the customer with a proposal stating exact prices for
various quantity levels. If changes are limited, the procedure is fast
and reasonably accurate. The technique leads toward product
specialization that may be most profitable for the company in the long
term.
In some cases, the procedure is modified somewhat: the estimator
maintains a card file system of past job quotations. The sales
representative then sells work without a sample portfolio and brings the
work in to be estimated. At this point, the estimator refers to the
card file for a similar job done perhaps three months ago and quotes
that former price or one close to it. The filling system used must be
indexed and cross-referenced to be a timesaver for the estimator.
Pricing by standard catalog
The most popular standard pricing catalog in the printing industry is
the Franklin Catalog (Porte Publishing Company, Salt Lake City, UT).
Using Franklin, almost any type of printed work can be estimated quickly
and easily. All estimating is based on selling price dollars.
In the next blog, some other factors that affecting pricing will be
discussed, like competition, the chargeback system, ratio of cost and
selling price, and also some reasonable guesswork. If you concern
textile printing as China Flag Makers do, then follow us.
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