A few months ago, I found a well-preserved copy of R.T. Porte's "Estimating Hints for Printing" in a second-hand bookstore. The little 5x7" book was published in 1923. Read what the acknowledged father of systemized print estimating tells us in Chapter 1:
"Ask any ten printers the cost or the selling price of any piece of printing and you will secure ten answers, no two of which are apt to be alike. The reason for this is that the average printer has in some way hit upon a certain sum - or has a peculiar method of his own - by which he arrives at a price, and applying that method reaches a result wholly different from that of most other printers. The cost system was at first hailed as the corrector of all such evils, but it was soon discovered that results from cost systems varied twenty-five percent on the same work when reproduced at intervals in the same office."
A scathing dismissal of an antiquated but still widely used pricing system, written nearly a century ago. The sad part is, it could have been written yesterday. Most shops still use Cost-Plus wrapped around Budgeted Hourly Rates to set selling prices, handing us the dubious distinction of being the only major industry left in the world to do so.
Why is that? Could it be because the method is easy to implement and the bean counters get to work with concrete numbers? &#%-backwards, but concrete? That's probably one reason. The other is that doing something dumb once is just dumb. Doing it twice becomes a philosophy.
Luckily for most printers who rely on BHRs, nearly every competitor uses them as well. With the price of equipment, salaries, utilities and rent being generally in line with what competitors pay, the system actually works, more or less. But consider this: Budgeted Hourly Rates are based mainly on utilization of equipment. That means when sales are down and presses are sitting idle, you're supposed to raise, not lower, your selling prices to make up for it!
What genius thought that up?
Unitac International Inc.
Tip of the Month
"Just google it!"
Finding almost anything these days has become so quick and easy to do we often forget that Google, the company, was only founded in 1998. Hard to imagine! Trying to find stuff on the internet twelve years ago without being able to google it, I mean. Or looking up an old order by searching through job tickets in a hanging file folder.
While 'google' may be a verb now (both Oxford and Webster say it is), you still won't be able to find that old job jacket by goggling it. For that you need Morning Flight. Our Video of the Month shows you how.
Video of the Month
Screencasts are a great way to learn how to use Morning Flight.
Click here to watch our short video on how to search for orders and quotes.