Negotiating with Printers
Production directors describe their bidding process and contract priorities.
Choosing the right printer is, arguably, the most important decision a production director has to make.
“If my printer produces a beautiful product with no quality complaints or grumbling art directors, meets our distribution schedule and stays a step ahead of our needs, then I’m given an A-plus by my management team,” says Fran Fox, senior director of production/manufacturing at Dwell. “If, however, he flounders, then I flop.”
This is what makes the bidding process “as important as the end result,” says Fox.
And that’s why Charlie Cole, production director for PennWell Corporation, starts his bidding a year or more before a new contract is due. “This gives me time to look at all the possibilities,” he says, “and also to put it away for a few weeks and come back to it later on.”
Cole starts by narrowing the field down to five or six vendors who can handle his company’s volume. The next step is to secure a non-disclosure agreement clearly delineating what will happen to proprietary data once the process is over. “In our case, we want it destroyed, or everything we mailed out physically sent back to us,” says Cole.
Analyzing a set of bids can become incredibly complex when printers collapse multiple components into one price, or when various printers refer to services or items inconsistently. “Make sure you’re getting cost broken out as much possible so you can convert prices and compare apples to apples,” says Michele Garth, a production manager at Northstar Travel Media.
Cole sets specific instructions on how he wants data presented—in part to evaluate how well the vendor follows directions. “Watch out for printers who want to change how you do business or evaluate bids,” he says. Cole requests a progressive invoice, with paper, mailing and manufacturing on separate statements.
The cost of making changes, or for ancillary items such as inserts, cards and supplements, should be included in a bid packet to avoid dramatic, unexpected increases later on. Garth also recommends paying attention to whether or not tax is included on the bid, and how that percentage may vary based on the vendor’s location.
During the bidding process, Cole evaluates the printers’ attention to detail. “A printer who is not familiar with our business should have questions,” Cole says. “If they don’t, I really critique their quotes and what they’re doing.”
Choosing the Right Printer
Every publisher, Fox points out, has three clear priorities when it comes to printing: Pricing, schedule and quality. “While everyone says each is equally important,” Fox adds, “these priorities carry different weights in different organizations. Knowing which of these have wiggle room and which don’t in your organization is the first step.”
While price is an obvious concern, Fox is leery of giving apparent cost savings too much import. “I want all my vendors to make money off my business,” she says. “I want them to be happy enough to bend over backward for us when things go wrong. And in production, things always go wrong.”
Cole says bids should be within about two to four percent of each other: “If one bid is 20 percent lower, it looks attractive, but he’s going to try to make your project profitable by charging you elsewhere. Also, if he goes bankrupt, your work can get stuck in his plant.”
For Fox, getting a sense of a vendor’s approach to customer service is a special priority during the bidding process—one that is easily overlooked. “Once the printer is selected and your successful negotiations on price, quality, schedule and contract terms are ancient history, it’s customer service that will make or break your publication’s satisfaction with your vendor’s, and ultimately your own, performance.” Some questions she looks to see addressed include: Does the customer service rep (CSR) have a history of successful troubleshooting? If you’re not satisfied with your assigned CSR, can you request a new one without trouble? Do your CSR, bindery supervisor, press crew and other representatives feel they’re on your team, or do they feel you’re lucky to be printing at their plant?
Cole suggests looking closely at what each printer is geared for. A long-run printer isn’t going to be good at short-runs, he says, and vice versa. “If they’re talking to you about selling press time and binder time, they’re a long-run printer,” says Cole. “If they are talking about selling you make-readies, it’s a short-run. In today’s market, it may not make sense to have everything in one place.” If working with multiple printers, he says, it’s vital to make the terms clear. “For example, if printer A is your long-run printer, a run will go to printer B automatically if it drops below a certain amount. That way they’re not fighting over the work, and you’re not in the middle.”
That need for flexibility extends to particular services, too, such as co-mailing. In some cases, printers will charge penalties for missing a co-mail deadline. “That’s not right,” Cole says. “If you miss your pool, you’ll get into the next available one. There shouldn’t be any penalties.” Cole also suggests considering whether or not co-mailing is worthwhile at all, on an issue-by-issue basis. “In my experience, certain magazines only save you $300-$400 per issue. If you delay your mailing by sometimes three to four days, maybe you could have used that time on the front end to sell another ad.”
Setting Contract Terms
Once a printer is chosen and an initial contract is set up, it’s important to remember that negotiations can still be made. “The most important thing is to ask,” says Garth.
Setting quality benchmarks at this point is key, says Fox. Also key is setting standards for termination, in case an important element is breached.
For Cole, setting up guidelines for communication is essential. “If a publisher calls the printer directly, their guidance is to direct the publisher back to the production manager,” he says. The print order, he adds, is a bible for the process. “Everybody sees the print order before it goes out. Once it goes out, that’s what they’re going to do, down to the detail.”
Establishing a fair paper consumption level is another crucial term to set. “A printer may have a really good paper price but kill you on consumption,” Cole says. “You want to make sure it’s locked in that if you run this form in this configuration, you’re only allowed this much paper to do it. Anything beyond that is the printer’s problem.”
Some negotiating points to evaluate, Fox advises, are the benefits of entering into longer contracts, the possibility of a two percent quickpay discount or varying the number of net days for payment.
Bundling other services, such as digital edition distribution or ad portals, may help bring cost down—though, as Cole reminds, it’s essential to weigh the real benefits of a “one-stop shop” by looking closely at the cost of each service and comparing it to the competition. Ultimately, he says, it’s imperative not to rush. “Printers will push you and say, ‘We gotta have this done.’ That’s when I back off from that printer. I set dates for decision points and say, ‘Don’t call me until this date.’ If they’re good, reputable printers, they’ll be patient.”