Operation

A task that is performed during the manufacturing process.  Generally an operation is completed on a job in a specific order.

Component

An attribute of an operation that defines how the operation is to be carried out, e.g. which materials, labour and machine resources will be used and how will it be priced.

Pricelist

A pricelist is assigned to a product and controls how it is priced and who can access it.  

A common approach in printIQ is to setup a separate pricelist for Custom vs Simplified Quotes.  Alternatively, you go opt for a more granular approach and set up pricelists for each product type. The latter gives you more control over how you mark-up each product.

Pricing tier

You can setup a range of tiers based on your own preference, i.e. Gold/Silver/Bronze or 1-10. You assign a tier to each customer and for a more granular approach, a tier can be assigned to a specific pricelist for each customer. This allows you to provide pricing at say a Gold tier for books and Silver tier for all other products.

Cost price

The pricing layer within printIQ that represents the true direct costs of manufacturing, i.e. raw materials, labour and machine usage for the product being produced.  

Cost price is driven and controlled by the Component record

Cost plus price

The secondary pricing layer that can be used to add indirect costs and overheads to the cost price or alternatively, can be used to deliver a base sell price.

Cost price is driven and controlled by the Component record

Wholesale price (mark-up layer 2)

This is a mark-up layer which is added to the Cost Plus price to add margin to the costing elements of the job. It adjusts the price of the quote by adding / removing from the total price and does not adjust each operation within the quote.

Wholesale price is driven and controlled by the Wholesale Pricelist that is assigned to a Factory and / or Site.

“Wholesale” is our standard term and can be adjusted to suit your business. It is generally used to deliver a transfer price to resellers, brokers or sales reps from which they can add additional mark-up.

Retail price (mark-up layer 3)

This is the final layer of mark-up that adjusts the wholesale price of the quote. Again, the term “retail” can be adjusted to suit your business.

Retail price is driven and controlled by the Retail pricelist which is assigned to a customer. It is generally used by resellers, brokers or sales reps to complete minor adjusts needed to close the deal or where there is potential to increase margin.

Marking up total costs

This approach sees the use of the wholesale and / or retail pricelist to add a percentage based mark-up to the total cost of a job.

Some common use cases:

• Use the wholesale mark-up to define the price you deliver to your resellers or your sales team (the price they cannot go below).
  
• Use the wholesale mark-up to define overhead. The wholesale price therefore becomes the total cost plus overhead and true mark-up is added at the retail mark-up level.
  

While this approach is the most simplistic of all the options, it’s still perhaps the most common technique used.  When combined with one of the options below, such as tiering, we tend to find that it is as accurate as adding mark-up to each operation (aspect of the job).

We often find people spend an inordinate amount of time marking up each part of the job, only to find that they could have saved themselves time by simply adding mark-up to the total.

Tier your mark-up to improve accuracy

To increase the accuracy of your mark-up, a common technique is to tier the mark-up down as aspects of the job increase.

We have three options for tier based mark-ups:

• Price based – Tier down as the total price of the product increases
  
• Quantity based – Tier down based on quantity breaks
  
• Job area – Tier up/down as the square meterage or footage of the job increases
  

Tier based mark-ups can be defined for each pricelist / product type and as a result can get quite detailed with 1000s of records if you make the breaks small. Generally, these are always applied using a CSV based upload.

Pricing tier mark-ups can only be applied to the wholesale or retail pricelist.

If you wish to apply them at an operation level, you will need to build a component table that uses quantity or area based options to apply the mark-up.

Marking up each operation

For a more granular approach, you may wish to apply mark-ups at the operation level.  Using this approach, you can have different mark-ups for each part of the job, i.e. one mark-up for the print, another for bindery or fabrication type operations etc.

Two configuration options

When using this approach, you apply the mark-up within the component records relating to that operation.  You have two options when doing this:

• On the Cost component record, using the “Factor” to apply a mark-up to the total cost calculated on that component record. 
  
• Add additional component records of type Cost Plus and apply the factor on these component records. When you use this technique, printIQ performs two pricing calculations, one for the Cost and another for the Cost Plus. 
  

Two different approaches

When marking up at an operation level, there are generally two common approaches:

• You are using the Cost Plus to represent your overhead (and subsequently you are likely to then add further mark-up at the wholesale and retail level).
  
• You are using a completely independent pricing methodology for your sell price that has no relationship to your cost.  For example, you may have true cost based on materials, machine costs and labour whereas your sell price may be click based.  In this scenario, you’re using the Cost Plus price as a sell price.
  

Controlling Cost Plus by component types (Pricelist driven mark-up)

This approach sees mark-up configured on each pricelist and is a less granular approach as it is done at a component type level, i.e. Paper, press costs, bindery, sheet based embellishments etc.

This is a less common approach as for most, it is too broad and the preference is to either go for either a holistic or granular approach. Having said that, at this point, it is the only way to add a mark-up to paper pricing.

Smoothing out mark-up using interpolation

A newly introduced approach to mark-up is to interpolate your mark-ups in order to smooth out the result. This comes into play when adding different mark-ups based on quantity or area breaks.  A mathematical anomaly exists where in some cases, it is cheaper to order more when nearing the top of the break.

Interpolation allows you to enter a low end and high end %. The % is then applied using a sliding scale depending on the quantity orders.  For example for quantity breaks of between 1000-1500, you could mark-up by a factor of 1.3 - 1.2.  1.3 is applied for quantities of 1000 and it gradually scales back to 1.2 as you get closer to 1500 units ordered.

Three options for configuring  interpolation

• Add it to Cost Plus mark-up factors as described above
  
• Add it to Click charges to smooth out quantity based click charges
  
• Add it to square foot/metre based pricing to smooth out the result
  

Getting really specific using Job Mark-ups

A less common but effective approach is to create specific operations that will control your mark-up. This is configured using a Job operation of type “Job Mark-up”.

The approach sees one or more mark-up operations created to individually or cumulatively mark-up other parts of the job.

For example, you may have an operation that applies a percentage mark-up to each print section while others may simply mark-up fabrication or installation type costs.

Configuration options

• Apply the mark-up to a section or restrict it to job based operations
  
• Apply the percentage against the Cost or Cost Plus price
  
• Add multiple mark-ups to cumulatively add mark-up to job based operations.
  
• Add application orders to determine which operations are included in the mark-up.
  

Some common use cases for Job Mark-ups

• Use this as a more balanced mark-up strategy that avoids marking up every operation.  In a signage scenario, you may like to apply one mark-up to the print and another to hardware and a third to installation.
  
• Pinpoint a single operation that you wish to mark-up in isolation.
  
• You can articulate overhead type costs as an operation. This allows you to be explicit on the overhead costs (for reporting purposes) and it leaves the cost plus, wholesale and retail mark-ups free to be used for true mark-up.
  

Catalogue pricing using a product catalogue

A product catalogue is a fully defined set of product identified by a product code / SKU. Defining a catalogue allows you to easily identify common products, easily order them and to specify pricing at a product / quantity level.  The result is a very specific approach to pricing that is unrelated to your costs.

From a pricing perspective, the catalogue price is inserted as a wholesale price override. This means that a true cost price is always calculated with the catalogue price sitting over the top.

The main downside to creating a catalogue is that you can end up with a very large catalogue due to the number of options available in a standard print product.  Once you start to add different stocks, sizes, process and finishing options, you can easily end up with 10s of thousands of products which can be difficult to maintain.

Catalogue pricing using components

A product catalogue can also be setup simply using component records. The main difference is that the approach is more fluid and no per defined products are created and no codes / SKUs are specified.

To set this up, you would combine several concepts already discussed.

• Use an item click rate to define the price for each size / quantity break
  
• Set the sell price of stock, guillotines, ink and other included components at no charge so that the click rate is an all-inclusive price.
  
• Additional finishing can be charged in on top of the click rate as a way to minimise the number of product options.  Generally, the click rate covers the stock, process and size.
  

Contract pricing

Contract pricing is an override of the catalogue price for a product. It is defined against a customer or group of customers and like the catalogue price, it is a wholesale price override.

Contract pricing should be used sparingly to minimise setup and on-going maintenance. In saying that, it is an effective tool for providing fixed pricing for valued clients.

Note, contract pricing is only available when a product is setup with a code / SKU.

Flat sheet pricing

Flat sheet pricing is a more efficient way of defining a product catalogue.  Instead of defining each product, you define a series of sheet based characteristics to which you attach prices for each quantity break.

From a configuration perspective, setup flat sheet libraries for different product types such as card vs paper based products, books etc. Within each flat sheet, define the base pricing for stock, size, process and coatings.

The outcome is that you create a single set of pricing that is shared by multiple products which results in consistent and efficient setup.

Flat sheet pricing + operations

You can optionally extend your flat sheet pricing approach by using the flat sheet to define the base specs and then simply add further finishing which are each priced outside the flat sheet definition.

This allows you to minimise the base pricing and articulate all the add-ons that would otherwise blow out the catalogue size.

Note, there are two options here, the first is Flat sheet + Extras which is an original concept while the flat sheet + operations is a newer, less involved concept where anything not defined in the flat sheet is added to the flat sheet price.

Click based pricing

This approach sees you use the Cost Plus price as a sell price.  As the product is priced, the pricing engine calculates your costs and then completes a second, unrelated calculation for the sell.

When sell prices are click based, you have the following options

• Print can be priced as an item based click which is a finished / cut size
  
• Print can be priced by the working sheet through the press
  
• Any additional finishing or materials can be priced per unit / per 1000 / per x units
  

See below for more details on a common approach to digital based pricing

Square foot/metre pricing

This is generally used in large / wide format or signage / textile based products. It is similar to the click based approach where the square foot / metre rate is effectively your sell price (added in as Cost Plus).

See below for more details on a setting this approach up.

Step 1

Add a fixed setup fee to cover pre-press and account management

Step 2

Price your basic print, cut and pack products based on item click rates, i.e. a click rate for the finished/cut item and not the working sheet through the press.  For example, 50c per side of an A4 / Letter sized sheet.  

Note: The key here is that the click rate includes make readies, ink, guillotine and packing charges. You can also have it include paper or have paper pricing added based on costs.  

A common approach is to have your house stock pricing included in the click charge while specialty and stocks you need to order in have their price added to the click charge.

Step 3

Scale your click rates back based on quantity breaks over standard digital quantities, i.e. discounted click rates kick in after quantities of 500.

Step 4

Articulate your additional finishing as a price per 1000 along with a minimum charge.  i.e. folding is 14% per 1000 with a minimum charge of $20.  This can apply to all standard finishing including binding options.

Step 5

Add further mark-up using the wholesale and retail pricelist.

Note, just a warning here that if you elect to add additional mark-up, you lose that transparency over pricing, i.e. it is no longer defined by a click rate.

Step 6

Setup your freight/shipping charges as a point of difference. This approach would see you set fixed pricing of say $10 or FREE for smaller / lighter products.  In contrast, pricing for heavier or products (booklets and folders) is based on actual freight calculations. This achieves a simple pricing approach without the risk of losing money on larger jobs.

Step 1

Add a fixed setup fee to cover pre-press, design and account management.

Step 2

As the products being offered are varied and in many cases, the print is only a small part of the sale, we separate out the pricing within the product. Start with defining the different parts of the product, i.e. print, hardware and installation.

Step 3

From a print perspective, group your substrates from a pricing perspective, i.e. budget, standard and premium. Setup pricing based on square fee/metre based rates.  

A different rate would be applied for each substrate group and you may opt to tier this as the area of the job increases.

The rate would be inclusive of substrate, ink, printing, cutting and curing (where applicable)

Step 4

Hardware and fabrication is then setup based on a cost of materials, labour and machine charges plus mark-up as this is where there is scope to add additional mark-up especially where your product offering is more unique.

Step 5

Installation is based on a time and materials estimate and is essentially labour costs. A simple approach here is to add different labour rates to represent the cost and sell price.

Step 6

Additional materials or embellishments can be setup based on per unit rates at both a cost and sell price. This covers things like eyelets, mounting brackets, feet etc.