Your print sales representative has probably been the bearer of bad news over the past two weeks. Ink and paper price increases have been announced, effective as early as April 1.
The majority of print contracts specify that prices are in place on an annual basis with increases based on a national index such as the Consumer Price Index. These prices do not include any increases for commodity pricing that can change at any time based on market conditions. Ink and paper are considered commodities.
The major ink manufacturers have announced increases that average 8% for sheetfed presses and 10% for web press products starting April 1. The major driver of this increase is the cost of petroleum and gas. Ink usually represents 8% to 12% of your total print invoice. Your print sales representative should have already alerted you to this increase. If not, contact your representative to confirm the exact price increase and timing.
The industry has not seen a paper increase since October 2010. Paper mills passed on a January 1 increase, but all of the major players have announced price increases of $2.00 to $3.00/cwt starting as early as April. This increase was not unexpected, and it shows that paper mills see an improvement in demand for the remainder of the year. The paper mills have succeeded in eliminating paper supply through consolidation and shutting down paper machines that are no longer efficient.
This is an important time to work closely with your print sales or customer service representative. Make sure he or she is keeping you up to date on the timing and implications of these increases. Reach out to your printer if you have not heard anything. You do not want to be surprised when you receive your May or June invoices that include unexpected price increases.
Any price increase is difficult to explain, but framing the discussion in the context of market changes will help to put it in perspective along with an accurate projection showing the impact to the bottom line.
Joanne Harap is the president of Production Matters, a consulting firm that provides evaluation, management and problem-solving services related to publications production and printing. She specializes in producing cost-efficient and cost-effective association publications.