07 May 2019 Business

When clairvoyance and myopia combine

Understanding costs is crucial to any business, especially with across the board pressure on margins.

It’s one of those quirks of the industry that few printers know their own costs with any degree of accuracy, but are absolutely confident they know their competitors' costs to the second decimal place. Any of the MIS providers will relate stories of customers and prospects who do not know nor understand their real costs but instead work with historical data or with figures that the software provider supplies as generic figures.

This is happening when industry surveys find time after time that the biggest issue that printers face is competitors printing below cost. How do they know? If they do not understand their own costs, how do they know what is ‘below cost’? Yet somehow they are able to judge what a competitor is up to. It may well be that those complaining do understand their costs and those complained of do not, and should that change, pricing would be different.

Of course, there will be examples of prices that are lower ‘than I can pay for paper’. These may be tactical or another step on the long drawn out journey to Carey Street. Blaming the behaviour of others is convenient and absolves a company of responsibility for its own fate. Far better to understand precisely where the costs are and take charge of doing something, raising prices to achieve a margin, attract more work to achieve the same sum, or cut costs because you understand what can be done.

Gareth Ward

Posting a comment

Please feel free to leave a comment on this post, we require all posts to be screened before they are set live. We will send you a notification when your comment is approved.

Turing Test

No comments to display, be the first! Leave a comment in the box above.