Ordering a larger quantity of printed materials to get a lower per-piece price can seem like an easy way to save money. The price per piece goes down, the purchasing department gets a better unit cost, and you have plenty of print inventory available when you need it.
But what happens when those materials sit on a shelf for six months? Or a year? What happens when a price changes, a product is updated, a regulation requires new language, or your brand gets refreshed? Suddenly, that inexpensive piece of print may not have been such a bargain.
The cost of printed inventory doesn't end when you pay the invoice. Businesses also absorb the cost of storing, managing, and eventually disposing of materials that are no longer usable.
A commonly cited benchmark puts annual inventory carrying costs at approximately 20% to 30% of the value of the inventory being held. Carrying costs can include warehouse space, handling, insurance, capital tied up in inventory, shrinkage, and obsolescence.
HoldingCost.com estimates that $100,000 of inventory could cost another $20,000 to $30,000 per year to carry.
Those costs can show up in several ways. Storage costs continue for as long as materials occupy valuable warehouse space. Capital is tied up in products sitting on shelves instead of being available for other areas of the business. Obsolescence can turn perfectly good printed pieces into waste when content, pricing, branding, or regulations change. When materials reach the end of their useful life, additional costs may be associated with removing, recycling, or disposing of them.
Printed materials often have a shorter life than we expect. A pricing change, updated product information, new regulatory language, or a branding change can make existing materials outdated quickly. The cost isn't limited to the space those materials occupy. You've already paid to print them, you've paid to store and manage them, and you may ultimately pay to dispose of them. What originally looked like a lower-cost print run can turn into wasted inventory.
Poor print inventory management can impact your business far beyond taking up warehouse space. Too much inventory can tie up cash and increase the risk of obsolete materials, while too little inventory can create stockouts that leave sales teams, locations, or customers without the materials they need.
Each of these problems ultimately affects the bottom line. Obsolete inventory creates waste, excess inventory ties up working capital, and stockouts can disrupt operations or result in missed opportunities.
Managing print inventory effectively means finding the right balance: having what you need when you need it, without paying to produce and store materials that may never be used.
This is why looking at print inventory as a whole, not simply the price of the next print order, can uncover opportunities to reduce costs and use working capital more effectively.
This is where print purchasing can get tricky.
Organizations should look beyond the initial commercial printing cost and consider the total cost of ownership: production, storage, handling, inventory management, waste, and the risk of materials becoming obsolete.
Advances in digital printing have changed the economics of shorter print runs.
Historically, longer runs were often necessary to reach an attractive unit price. Today's short-run digital printing technology can make it practical to produce smaller quantities more frequently while still delivering excellent print quality.
At Hatteras, our investment in technology with the AccurioJet KM-1 gives customers another option when deciding how much to print. The goal isn't to move every project from offset to digital. It's to choose the production method that makes the most sense for the job.
Offset printing may still be the right answer for a large run. Digital printing may make more sense for materials that change frequently, have uncertain demand, or need to be replenished in smaller quantities.
A print-on-demand or print-closer-to-demand strategy can help organizations reduce excess inventory while giving them more flexibility to make changes.
Instead of printing a year's worth of material at once, it may make sense to print three months' worth and replenish as needed. For some applications, production can be pushed even closer to actual demand, with materials produced only when they're needed rather than manufactured months in advance.
That can be particularly valuable for marketing collateral, manuals, educational materials, books, forms, directories, sales materials, and other pieces that are regularly updated.
For organizations carrying a significant amount of printed inventory, a print inventory assessment can also be worthwhile. Look at what's currently on the shelf, how quickly each item is being used, how frequently content changes, and how much inventory is ultimately discarded.
Slow-moving items may be good candidates for shorter runs or print-on-demand production, while high-volume, predictable materials may still benefit from larger production runs.
Look at the Total Print Inventory Cost, Not Just the Piece Price
There will always be situations where buying more makes financial sense. But base quantity on actual demand and expected usage, not simply the lowest possible unit price. At Hatteras, we can help you evaluate your print orders and create a budget that makes the most financial sense.
Sometimes the smartest print buying decision isn't getting the lowest price per piece. It's printing the right quantity in the first place. If you are interested in a no-pressure, free print inventory assessment, send me an email at bzbzoen@4hatteras.com