Book Printing: The Effect of Unit Costs vs. Total Costs

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A client of mine recently asked for pricing for her fashion color swatch books: 90 copies vs. 100 copies vs. 115 copies vs. 232 copies. This was to get ballpark pricing. (Her prior run had been 232 copies, so this was the benchmark to which she would compare the other prices.) She planned to open the ordering process to her 4,000 online prospective sales clients and then place the final order through the printer.

As expected, on the initial estimate the unit costs dropped in a measured fashion as the total costs increased.

So my client, having received 119 orders for her color swatch print books, ordered this number and requested an updated price. Unfortunately, even though the unit costs decreased (as expected), the total price gap between 115 copies and 119 copies was much higher than the increases between the other possible press runs.

So my client chose to adjust the overall order back down to 115 copies. (Presumably she will take the balance copies from her prior inventory. I don’t believe she will turn away the extra four sales.)

What Does This Mean?

How is this relevant? The total cost of a job can affect the cash flow of an ultra-small business, like my client’s. For a digital print job, the economy of scale will affect the unit cost less than for a much longer offset press run (in which later copies in the press run start to cost much less). However, “out of pocket” costs can still be a determining factor (and limiting factor) for the total press run.

In contrast, the unit cost will go down more and faster for offset, which distributes the make-ready cost, (which is much higher than for digital printing) over a greater number of copies. The decreasing unit cost over the course of a long press run can dramatically increase the potential profit on each item. My client will make more on each unit (each color swatch print book) she sells.

Why Is This True?

Offset printing requires a lot of physical labor to set up the press, hang printing plates, add ink, get the ink/water balance correct, and wash up and hang new printing plates between custom printing press runs. (For a print book comprising eight 16-page signatures, for instance, the printer must do all make-ready work for each of the eight press runs.)

In contrast, digital printing, which is done on equipment that resembles a photocopier on steroids, is a less messy process requiring much less set-up and clean-up time.

So offset commercial printing takes a lot of preparation time. That said, once the press is up to color and everything else is in order, it can pretty much run indefinitely. In this case, for longer press runs, the cost of the extra make-ready time is distributed over more units (copies of the printed product), so the unit cost goes down.

In contrast, once press-ready PDFs are ready for a digital commercial printing job, the digital press can start producing usable copies almost immediately. However, digital presses run more slowly than offset presses, and combined with the overall higher running costs (more expensive ink, for instance), digital printing is really only ideal for shorter press runs.

The overall cost of longer digital press runs eventually starts to exceed the cost of offset printing. Your printer can let you know for sure, based on your job specs, but a good rule of thumb is to produce jobs under 1,000 copies on a digital press and those over 1,000 copies on an offset press. (Granted, a multi-page job like a print book, magazine, or catalog might change this target cross-over point between digital and offset commercial printing quite a bit. That’s why you need to ask your own printer about options when choosing a technology for a print job. But this is a good general rule.

In My Client’s Case…

My client produces 26 different versions of her color swatch print books, which are small cards on a screw-and-post binding that resemble a PMS swatch book. However, they are for selecting make-up and clothing colors based on one’s complexion (rather than choosing PMS colors for a print job).

Each of the 26 master copies in my client’s press run (which is reprinted on an as-needed basis, depending on sales of her product, about three times a year) may need one, two, or even six copies to fulfill client orders. These master copies include some colors that are included in other color swatch print books, but there is not an exact correlation, so we’ll say that each book is different and each requires an ultra-short press run. Because of this they are ideally suited to digital commercial printing.

To recap this process, my client asked for various possible press runs to get a handle on her potential costs. Overall, these rose in a measured way. (Obviously, more copies meant a higher overall price.) In a similar vein, the unit costs for each of these potential press runs decreased, yielding a higher potential profit to my client for each sale (the difference between the printer’s cost to produce and the customer’s cost to buy each color swatch print book).

While I really couldn’t wrap my brain around why the overall cost difference between 115 copies and 119 copies was so much higher than the larger gaps (between 90 copies, 100 copies, and 115 copies), I could understand my client’s concern. Moreover, I could understand that due to the difference between digital and offset printing costs (unit costs and total costs), I could see that my client would not be able to benefit from the huge, potential “economy of scale” of offset commercial printing. And I could see that ultimately my client had to dig deeply into her own pockets for the total cost of the job, whether or not she would make a higher profit on each swatch book she sold.

The Takeaway

If all of this makes your head swim, I can appreciate that. So here are some simpler takeaways:

1. 1. In your own print buying work, it’s wise to request a bid for a number of potential press runs (to see how the unit cost will go down as the press run and overall cost go up). However, request this information at the onset of a job to avoid “going back to the well” (printers prefer that you request one estimate with multiple press runs at the beginning of the job rather than asking for multiple, revised estimates).

1. 1. Compare the unit costs and the gaps in total costs between each of the potential press runs. Doing this before committing to a press run (and along with determining how many copies will actually be needed/used) will help avoid later regrets.

1. 1. Understand where the sweet spot is for digital commercial printing; that is, the cross-over point at which digital printing becomes more expensive and offset printing becomes less expensive. This will depend on the trim size of the job, the press run, the number of colors, the number of pages in the document, and whether you will need to use PMS colors (not a possibility with digital printing, even though digital printing usually has more base colors and can therefore simulate—or build–more PMS colors than offset printing). Your printer can determine the cross-over sweet spot based on these specifications.

1. Realize that for any variable-data work, you’ll probably need digital printing, whatever the cost. The only alternative I know is to offset print 4-color “shells” (with identical printed text and images) and then digitally surprint the variable data on these shells in black ink or toner using a digital press.

Ultimately this is one giant math problem. If you sell printed items (and need to know their unit cost), this will be a useful exercise. The same is true if you produce and then store a large number of print books, for instance, that will be used over several years (as opposed to all at once) and you need to amortize the cost of the custom printing work (a specific number of copies at a particular unit cost spread over a specific number of years). Or if you’re a small business with cash flow concerns, the opposite may be true. In this case, the bottom line alone may determine your press run.

Either way, the more ways you approach this, the more fiscally sound your decisions will be.

This entry was posted on Friday, April 29th, 2022 at 9:52 pm and is filed under PrintBuying. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.