Small and new catalogers typically buy their paper from the printer; it makes sense if you’re not sure of what you’re doing or you’re buying small quantities. But if you’re considering buying your catalog paper direct from the mill or from a paper merchant, here are a few factors to bear in mind:
1) When you buy paper direct you, the cataloger, are responsible for managing the paper with your printer.
2) Printers charge for handling paper–typically $1/hundredweight (cwt). So when you’re comparing the price of the paper from your printer vs. from the mill or a paper merchant.
3) Paper merchants can ship up to 5% more than the contracted amount, so you may have to take more paper from a merchant than you contracted for.
4) If there is paper left over after a job, you pay for storage and you need to manage that inventory of unused paper.
5) Paper merchants can be price competitive on the bulk of your paper but may be less price competitive on less than truckload (LTL) lots (on cover stock, for instance.)
6) Always make sure in comparing price that you are comparing apples and apples. The grade and weight of the paper must be the same. But papers of the same grade often have significant differences in brightness and opacity. Basis weights of paper can also vary quite a bit; a 32-lb. paper from one mill may be somewhat different than a 32–lb. paper from another mill.
7) When you buy paper from the printer you are contracting typically for a combined price for paper and printing. If the printer underestimates the paper needed or consumes more paper than originally estimated, it is the printer’s problem, not yours. If you buy paper, you are supplying the raw material to the printer, and the responsibility for supplying enough paper that runs well on the printer’s presses shifts over to you.
8) If the printer stops supplying the paper (and loses the profit from the paper), you may find your printing price increasing in future jobs to cover that loss of profit.
The best way to get to the bottom line is to build a simple spreadsheet comparing the paper being offered by the printer and the paper merchant. Again, make sure you are comparing apples and apples in terms of weight, grade, brightness, and opacity. And if you’re being offered a lighter-weight paper with the savings coming from postage savings, find out if your alternate source has a similar lighter-weight paper that offers the same combination of printability and postage savings.
Always look at the actual costs after the job is done to see if there is any significant variance between the estimated cost of the paper and the actual cost of the job.
The advantage of comparison-shopping for paper from a paper merchant as well as from your printer is simple: Paper is often 50% or more of the cost of a printing job, and comparison-shopping validates that you are getting the best price possible on a commodity purchase, paper.
Bottom line: It pays to shop. But factor in the management time and the other costs of adding another vendor when drawing up your cost comparisons.
Consultant Jim Coogan is president of Santa Fe, NM-based Catalog Marketing Economics.