Estimating has been a cornerstone in the printing industry for years.
While you may think that providing your customers with an estimate is for their benefit only, in fact, estimating a job also provides you with a myriad of benefits.
A good estimate:
Most importantly, good estimating is the secret sauce to good sales.
Willy-nilly pricing can mean lost profits and missed opportunities.
By knowing your anticipated costs before negotiating your price, you’ll have vital information to know things like the break-even point on print production, an acceptable price point, and at what point there is both zero profit and zero loss.
These details are also critical when you want data on which of your print items are (or aren’t) profitable.
Printing multiple orders of [blank] doesn’t mean business is good if you’re losing money on every order you accept.
Good print estimating empowers your staff with the knowledge they need about where they can be aggressive and where they need to hold the line on price.
For low-margin work, estimating takes on an increasingly important role.
In most situations, the last thing you want to do is price work below your costs. And, without a means to estimate correctly, there’s no way for you to know that break-even point.
But does that still apply with digital printing? Is cost estimating still relevant when dealing with digital printing?
The short answer is yes.
The importance of estimating digital printing is still there, though the method may be somewhat different. Instead of complex spreadsheets and formulas, you can price estimate using simplified equations with built-in profit to calculate your price. Or, better yet, leverage an MIS tool to execute this for you.
Estimating will also benefit you when wanting to know whether your marketplace will support the cost associated with performing specific processes.
For example, if the market rate for perfect binding is hugely competitive, it may make sense to outsource these functions to low-cost trade binders instead of trying to keep the operations in-house. Estimating will help you identify this and adjust accordingly.
There is a direct correlation between how well a print company understands its costs and profitability with how well they understand and execute their estimating process. Print companies that are fuzzy on their expenses are more prone to make unwise financial decisions, like producing jobs using one press when using another would have made the situation more profitable.
Having an excellent estimating tool that automates this for you equals less stress, better profitability, and in a nutshell, is just plain good for your business.