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Pricing with Buy As Needed Paper

 

Posted: 29 Jan 2008 01:17 pm

 

I have noticed a strange problem. I've tried to troubleshoot myself and see where it may be occurring, but to no avail. Any help would be appreciated. When I select a product and then a paper, I zoom into the paper costings. Usually (with in stock paper) the Base Price matches the quantity chosen and then spoilage is added separately under the Base Price line. For example, I choose a basic form, 5000 run on regular paper and look at the paper costs. The Base price lists 5,000 with 250 to be run to cover spoilage.

However, if I choose a Buy As Needed Paper the Base Price lists 5250 with 250 as spoilage. Why is the extra 250 added to the base price with another 250 for spoilage - surely the base price should still read 5000? I did my own research and it seems that it's always under buy as needed paper - and consequently we're coming up much higher in my prices than I should be. If I then put that same paper into In-Stock Paper, the base price then matches the quantity ... The ONLY time the figures matched was when the paper size is slightly bigger than the form size I chose.

I hope you can understand my waffle, but I'm baffled. I've tried all ways I can to figure out a solution. Thanks.

. . . . . prendervilles
Joined: 16 May 2006  Posts: 5  Location: Zephyrhills, Florida

 

Forum_Spoilage

 

Hi Sue,

Good to hear from you! Believe it or not, Morning Flight is actually trying to keep you on the straight and narrow. The program assumes that vendors don't sell cut-size paper in broken reams. Folio yes, but not 8.5x11. That's not a problem with in-Stock paper because you can take the paper from the shelf and then put back what you don't use. When you select any other category of paper, Morning Flight still shows you the actual spoilage quantity (250 in your example), but then adds the rest of the ream to the base quantity. The restriction goes away when you cut 8.5x11 out of larger sheets.

What it comes down to is, who pays for that extra half ream, you or your customer? When Unitac started the print shop, we thought we could always use the leftovers for another job. Didn't happen. Wasn't but a couple of years before we were up to our dimples in old paper.

If you really want to be extra nice to your customer, there is a work-around. Make a new buy-as-needed paper item, size 17.5x22.5, then price that at exactly four times the cost of what you would charge for 8.5x11. Stick with white or off-white paper, though. Colors will collect dust forever.

If you're still encountering a variance in price (but no longer in spoilage), it would be due to one or both of two things:

1.A different markup in effect for in-Stock and Buy-as-Needed paper
2.Carton-Plus pricing being turned on for in-Stock. Here, the variance would only manifest itself if the job called for less than a carton of paper.

Hope this helps.
. . . . .  Hal Heindel

 

Thanks for the response Hal - now it makes sense! I think for our shop, the best thing to do to make life easier (and don't we all want that?) is to move all my "buy as needed paper" into my "in stock" paper. Can you tell me if there's an 'easy' way to do this, i.e. can I go into the Printfire program files folder and physically move files to another directory or am I going to have to do them all manually? Thanks again.
. . . . . prendervilles

 

. . . make life easier (and don't we all want that?)

I couldn't agree more, Sue. And I hope Morning Flight can play a big role in that.

Because Buy-as-Needed Paper uses a totally different file structure than in-Stock Paper, there is no easy, automatic way to transfer paper from one into the other. In-Stock entry is actually quicker, so it shouldn't take very long to do it manually. You'll probably want to print a list of your Buy-as-Needed paper, sorted by name, and use that as your input.

The reason why in-Stock paper is quicker is because all the colors are wrapped into a single parent item. That not only cuts down on the number of items, but also on how many prices you need to enter: Just two, one for white and one for color. Contrast that with Buy-as-Needed paper, where each paper color has its own name, description, and price. See Click here to see why categories are organized that way, and for the pros and cons of each method.

As I cautioned earlier, the main drawback with moving all your Buy-as-Needed paper into the in-Stock file is the risk of leaving a good chunk of change on the table. Say a customer orders 200 special envelopes, something you normally don't keep on hand. When it's in-Stock, Morning Flight will charge for only 200 plus spoilage. The invoice you'll get from your vendor will be for the full box of 500.

Here is another way of looking at it. Compare the price of 200 versus 400 letterheads printed on Bond, $30.00 per 1,000 sheets. If the paper comes from in-Stock, the price to the customer is $51.50 for 200 and $64.85 for 400. If the paper comes from the Buy-as-Needed file, the price changes to $61.65 for 200 and $66.40 for 400 (The reason I'm picking 400 is so that a single ream will still allow for spoilage). Seeing it costs only $4.75 extra to double up on the quantity, getting your customer to order 400 letterheads instead of 200 is easy. But with in-Stock, the quantity will likely stay at 200. That's $15.00 out of your pocket . . . for doing virtually the same amount of work (give or take a few minutes), and getting billed the exact same amount for 500 sheets of paper.

As you can tell, I have a thing for pricing printing for profit. After 37 years of running a printing business, I know how easy it is not to. I've also learned that big profits are little profits added up. And with that, I'll get off my soap box.

Just out of curiosity, Sue, about how many paper items do you think you will you have to transfer?
. . . . .  Hal Heindel

 

Thanks Hal for all your attention to detail and your comprehensive replies. It's often a very good thing to be aware of the program's little nuances. The fact that you've been in the industry is good for us smaller print shop businesses as we feel you're looking out for us! I'll certainly bear in mind now how the In Stock Paper works versus the Buy As Needed and it does make sense - I just couldn't fathom out the differences it was yielding before you explained it to me.

Your help is much appreciated. We don't often get orders for odd quantities for specialist papers but I am aware that a customer ordering, say 200 special envelopes, when we can only get a box of 500, would leave us with a shelf of 300 dust collectors. I'll probably judge each job individually and decide on pricing accordingly.

Well, I'm off to do some transferring - I actually have about 80 Buy As Needed papers, but this will be a good chance to do some housekeeping! Thanks Again. Sue.
. . . . . prendervilles

 

You're welcome, Sue - happy to be of help. Looks like you're well into Morning Flight 102.
. . . . .  Hal Heindel