How Much Should I Mark Up Print? – Print Pricing Strategy

A question we hear from both new print companies as well as printers who’ve been around for a while is “How much should I mark my print up?”. This print pricing question when asked by new print companies is more about just learning the ropes of business, where someone who’s been in the printing industry for a while may be asking more strategically as it relates to market conditions, changes in print buyer behavior or perception and other factors.

In this article we are covering some of the most important aspects and factor of print pricing as it relates to mark up, margins and profitability.

 

What is the Average Print Markup on Cost?

When it comes to products and services in business across all industries a standard go-to markup has been 50%. Why is 50% markup the average? To be honest no one fully knows, but one of the main reasons standards like this stick is because they are simple and easy. In the past a 50% margin has been enough to turn a profit and grow.

So is 50% still a good margin?

The answer is yes. But it really depends.

 

Let’s go deeper into print price margins below.

 

Print Service Margins

While you may just end up sticking with 50% we recommend taking more time to strategically mark up your print. Let’s look at a few examples below.

 

Low Margin Print

In this group we’ll talk about low print margins being under 50%.

Printing has a high cost of goods because you must have equipment, ink, paper and people to create the finished product. This means that to get to profitability you have to be doing a lot of print work to begin with. So the lower your markup or margin is the mor print you need to produce for it to be profitable.

For startup print operations low margins sound like a good idea because it can keep you competitive in the marketplace very easily, but it puts an immediate strain on your businesses cashflow, operability and growth potential. 

For larger print companies they don’t like to have low margins because they know what they are doing and have “been there, done that”.

But this dichotomy is interesting because in many cases larger print businesses can afford to have lower margins and may actually be able to grow revenue quicker, while on the opposite end of the spectrum smaller startups can provide value added services that allow them to have better margins.

In many cases you’ll find print brokers offering the best prices because they do not carry the overhead and instead solely take the margin. They can operate with one to three people in their business and still do well with low margins. In other cases you’ll see print companies using low margins as loss leaders to get customers in the door so they can sell them higher margin print.

The truth is that low margins will allow you to showcase a better price than competitors and may bring in more business because of that. If your business is good with being a price driven organization then this could be a good fit for you.

 

Middle Margin Print

Mid Margin is going to be classified as print margins between 50% and 100%.

This is average and where you will find most print companies landing.

The reason is that within this range you can stay competitive but not risk losing out on the business side of things. This padding also provides your print company the ability to get creative with how you offer the service and the value adds provided. This may cut into your margins a bit, but that’s the point, it allows you to differentiate, attract more customers and keep them longer term.

 

High Margin Print

For this group we’re talking about anything over 100% print margins.

To mark up your print products and services to 150%, 200%, 400% or more you have to really be dealing in something unique or provide an extremely white glove service.

In most cases companies that charge extremely high margins in their pricing, have specialized processes that others do not, a high level of subject matter expertise in the sectors or industries they work with, proprietary technology that others do not possess and the list goes on.

You can also achieve this with really good marketing and branding, but even that likely won’t get you to the highest tiers of the margin game unless you have something truly different or specialized.

 

What has been your experience with print pricing strategies, print margins and markup? We would love to hear! And as always if you have more questions about what you read in this article or have questions about how we help print companies like your get more traffic, leads and sales then please reach out.