Negotiating Prices with Printers

Three months ago, a printer asked me what I thought about print buyers' negotiating strategies. Is there a common strategy for evaluating estimates? Do print buyers tend to negotiate?

I couldn't say. It's an interesting question, and as far as I know, no one has really studied it. I decided to make it our new Buyers' Poll this month, so if you buy printing, please take a moment today and go to our home page at www.bostonprintbuyers.com to weigh in. Here are your choices:

1. I don't negotiate: printers get one shot.

2. The lowest price wins the job.

3. I let printers go back and "sharpen their pencils" a 2nd time.

4. My preferred vendor gets a chance to match the lowest price.

5. I consider all estimates and decide based on several criteria.

6. I tend to go with a preferred vendor, regardless of price.

These are the most likely strategies. Some buyers share the bids with their favorite printer, so he or she can match or beat it. Others wouldn't dream of it.

Some buyers, such as those who work for the government, have regulations about obtaining and awarding printing contracts. These situations take the negotiation right out of the equation. It's much easier if your employer lays down the rules. But this is rare.

What Would Real Buyers Say?

I put this question to two very senior-level print buyers who have my respect for their skill and experience. Here's some of what they said:

"Interesting question. I actually employ (different) strategies depending upon the situation and the vendor. For long-standing vendors whom which I have a good working relationship and a track record of prior pricing structures, I'll always give the prices a "fairness check" by comparing them to other projects with fairly close specs to see if they pass the sniff test.

"If for any reason I am unsure if the prices are fair, I challenge them with evidence. Often they'll come down, even if they stand by their original quote. I view this as a token of good faith that I am keeping them honest (there is always fat on the prices as there should be - I want them to be profitable, and at times I know I am pushing them very close to their margin. It's a balancing act on my part to ensure I don't put them there so often that my account becomes anything less than extremely important to them).

"New vendors are a whole different story. I provide them with a great deal of information and my time to ensure they can give me very successful quotes - and they most often (there are exceptions to all the rules here) get one shot. I find this puts potential new producers on quick notice that we are educated, informed and serious so don't mess with us :)."

She goes on to warn: "If every transaction is one of "give me a price and I'll try to talk you down a few bucks," they just adjust their quotes to make you feel like you're doing your job. If you never give a printer a second chance, you may miss an opportunity to rethink a project and really save some money. (My emphasis, by the way.) Bottom line? Never become complacent. Always change up your strategy to keep everyone on their toes."

Another buyer gives his vendors one shot at submitting prices. They know it.

"… I can't say if my methods are the best, as there are so many factors to consider. Given the size company we are, the number of projects we do, our turnaround time requirements and our vendor pool, I think the one-bid, one-chance method works well. It really is a philosophy that I believe in. The more you can simplify the process, the better you can judge value. (Again, my emphasis.) If you took each job we did and did an extensive search for lower pricing every time, you could probably find it somewhere.

"I try to look at the work we do as a body of work. By partnering with good vendors and having them understand that they are in fierce competition for the work, we get the best pricing overall. I don't ever want my vendors to feel comfortable with being our vendor. They have to be aggressive, or they don't get the work.

"Historically, I have seen printers' pricing fluctuate. By having the one-bid, one-chance method in place, the problem will correct itself and you will see the range of pricing reduced, which signifies competitiveness. This does not mean we never ask for better pricing. When we do price grids to award annual work, we may ask the particular printer whom we want to award the job to (because of quality and service) to come back with more aggressive pricing."

This is an interesting topic, wouldn't you say? Please take our poll and weigh in.

One of our Conference speakers, Robert McClements of Grange Consulting in Yorkshire, UK, will be presenting on the topic of Negotiating with Printers. It is an Advanced session, geared toward buyers who've been in the trenches for several years. This subject is just one of Robert's specialties. Looking at Conference registrants to date, Robert's session is very, very popular - as it was last year.

Comments? Talk to me at mdana@bostonprintbuyers.com.

©2008 Margie Dana. All rights reserved. You're free to forward this email to friends and colleagues: please do! However, no part of this column may be reprinted without permission from the author.

Print Buyer Conference Update

September 11th - 12th, 2008

Sheraton Boston Hotel, Boston, MA

Interesting fact: a little more than 50% of our Conference attendees are from New England. The other 50% are coming from 15 other US states, plus Canada, Belgium and Germany. I kid you not.

Exhibitors, there are only 7 booths left. Don't be left out! Go to www.printbuyersconference.com and click on Exhibitors, or contact Barbara Graham at (978) 490-0010 for details.

Registration questions? Contact info@printbuyersinternational.com.

New Print Buyer Poll

Buyers, answer this question:
Which negotiation strategy do you use when printers supply estimates?

Cast your vote on our home page at www.bostonprintbuyers.com.

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