Focusing on efficiencies leads to commodity pricing
Sometimes the whole mindset of the printing industry seems to focus on cost price. Printing companies seem to be constantly concentrating on how to reduce their selling price to the buyer. The only way to do this is by reducing production costs, so the pressure is on for press manufacturers to develop presses that are ever more efficient. However, the pressure is also on the dealer network to sell the presses for as low a price as possible. This way of thinking does not benefit anyone.
It’s time to change our mindset!
Here are some extremely interesting statistics. They come from the Beyond CMYK Report “The Use of Special Effects In Digital Printing”. All the statistics come from interviewing buyers of print in London and New York. The special effects market is estimated to be between 6% and 58% of the total color digital market.
According to the report, buyers are prepared to pay between 24% and 89% extra for special effects. Just to take one example, buyers are prepared to pay, on average, 89% extra for textured print. And they believe that up to 28% of their print could benefit from this special effect.
This opportunity does not just apply to production print. According to the June 2018 edition of Digital Printer magazine, sublimation cushions can sell at up to six times production price.
Many printing companies sell on a cost plus model. They believe that buyers focus purely on lowest price, despite the fact that these statistics tell a different story. So how can we change this mindset?
Dispelling the myth of the price-focused buyer: why it’s time to talk about the product-profit relationship
Press sellers should be showing their customers that there is a different way
It is time to help your customers understand that buyers are not purely price-focused. And it’s time to talk about which products can make printing companies better profits. It is also time to show them what equipment they need in order to produce these products.
According to the Beyond CMYK report, if they invest in white ink, printers have an opportunity to up 37% more. According to the buyers that were interviewed, white may benefit 23% of the print that they purchase. Investing in in-line foiling can produce an even better return. The report shows an opportunity to increase prices by up to 82%. This opportunity could benefit 28% of print.
However, this opportunity only exists if the print industry moves away from the commodity pricing mentality that it has traditionally held. This means that press sellers must help printing companies to sell these opportunities correctly, rather than just selling value cheaply as has so often been done in the past. Printing companies must also appreciate the machinery that they invest in as a way to improve their businesses. It means that you should sell printing equipment that enables these opportunities at a fair price.
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