If you are a commercial printer, you have to be careful with preparing the computations for your quotations to clients.
If you are a commercial printer, you have to be careful with preparing the computations for your quotations to clients. That is because commercial printing is a complicated and sophisticated process so you will have to take a lot of things into consideration when making your price quotations.
Most printers have their own ready-made pricelist that can help in standardizing the pricing among all their sales representatives. At the same time, this system lessens the work of the account executives. They would only need to prepare a new computation if the client calls for a job with requirements that are specialized or if the order is very big in terms of volume. After all, volume orders from a printing press get a lot of discounts.
When the account executives have to compute for the prices, they take into consideration many things. The formula that they follow was already determined by the management and they will just have to fill in the variables in order to come up with the actual selling cost that they will charge their clients.
Among the primary things that are being considered in the quotation are the number of copies, the kind of paper stock to be used, the size of the material, the finishing requirements, the number of colors to be used, and if the layout was done outside or in-house. These are standard things that could be quantified and part of the capitalization. So you have to profit on these things.
Additionally, there is already a standard figure or percentage that the sales people will include on top of the prices of materials. That should cover operational costs like rent, electricity and other utilities, supplies, salaries, and the depreciation of machines. That is part of the costs that are charged to the client because that is important to keep the printing business afloat. Then, depending on where the printer is located, they will add the taxes, which could be between eight to 12% of the costs.
The sales executive will also add in another ten to fifteen percent on the cost, which will then be his commission or sales incentive. If you are going to haggle for prices, the sales executive will have a certain percentage of margin with which he can adjust the price. Sometimes, if he wants a job so bad because it is a big account, he might even sacrifice part of his commission in order to give as discount. Or he might use some of it to give gifts to the client just to get the sale. While the sales executives may be allowed to charge their representation expenses to the company, sometimes they sacrifice their commissions because that is their weapon in order to get sales and meet their quotas. And sometimes, they also look at the long-term value of a client. If this client will become a regular, he will still earn from the future business that the client will bring in.
When you are in commercial printing, you have to exercise utmost care when making computations because the wrong placement of a decimal point could mean thousands of dollars in losses. If you are a newbie in a commercial printer who gets assigned to prepare a quotation, you might need to have a superior to re-compute and approve your quote before sending it to the client. Even the veterans make mistakes, so it is still better to have counterchecking of computations before a quotation is released.