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Savings Corner – Trimming Your Print/Copy/Ad Specialties/Design Costs March 10, 2011

Posted by solutionsbconsultants in Accountability, Business Improvement, Increase Profitability, Internet, Marketing, Procurement, Savings Corner.
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One of the low hanging fruit baskets of savings that you find in almost every business is printing and its related cousins. This broad category includes everything from design, printing, copying, advertising specialities and the internet.
COPYING: Let’s start with copying. If your office is using inkjet printers – especially lexmark or even some laser printers, chances are you are getting eaten alive in cartridge costs. You have several alternatives – First, if you are in love with your inkjets or laser printer, shop around for toner – hint – the big box office supply places are not the place to shop – we have achieved savings of 30% or more by partnering with smaller distributors and giving them a price target to hit. Second, rent a copy machine (or machine) – most copier companies will rent you a machine, provide toner and guaranteed service for a little over a penny per click on black and white. Color will (of course) be somewhat more expensive and is based on volume but it will still be less expensive than your inkjet or laser. Third, do not buy your paper from the office supply store – buy it from a paper merchant or better still – leverage your printing supplier to provide copy paper at their cost in exchange for your printing business. Fourth, if you have large copying jobs – do not take it to your local Fedex Office – I love the guys that work there but we have been able to save 50% or more using copy wholesalers. If you must use Fedex Office then get a discount card from the manager – you can save 15% or more with that little jewel.
DESIGN: Graphic Design staffing is size dependent on your business – that will determine whether you can afford to do design in-house, use freelancers or employ an outside agency. Regardless of who does your design work, demand copies of both the final files and working files. The reason for this is two-fold – 1) You can make your own versions/revisions without paying anyone and 2) If the designer disappears or the agency goes under, you are protected from having to recreate a catalog or web site from scratch. With the exception of very small businesses, I advocate in-house design and conversion of all paper documents to .pdf or web-based forms. If you can’t design from scratch, learn how to make changes – we have trained numerous companies and the learning curve is not as steep as you might think.
PRINTING: Nothing has become more competitive than printing prices whether you are printing digital, offset, half-web, full-web…. you get the picture. Most companies fail to obtain competitive prices by not bidding out jobs deep and wide – deep because you need to poll a statistically significant number of printers (and that doesn’t mean 3) and wide because you must gain understanding of the printer’s equipment capabilities and how you can leverage your job to take advantage of their production sweet spot. Never give all of your business to a single printer and require that they bid out every job every time – this keeps them honest. Don’t fall for the trap that only such and such printer can do a quality job or that your co-worker’s next door neighbor owns a print shop and will give you a “great” deal. The best part about purchasing printing is that printing prices are relatively easy to reverse engineer since equipment speeds are published, labor is relatively constant and the major ingredient “paper” is easy to source and price.
ADVERTISING SPECIALTIES: This is another easy one. Once you understand the industry pricing codes, you can easily negotiate from a position of power if you choose to use a specialty rep. company. Or if you are adventurous, you can deal direct with most specialty companies because they would rather make a sale to you then no sale at all. There are a lot of variations – I have negotiated cost-plus deals with a rep. company because my client didn’t have time to source. I have also purchased shirts direct from the manufacturer (US and China) and then had them contract printed or embroidered. The direction that I go in is oftentimes dictated by my clients internal resources, the size of the job and the amount of savings desired by the client.
INTERNET: Much harder to explain in a short blog but here’s my attempt. Web design should keep your company’s look and feel which means that you can repurpose (not re-design) your graphics which can be done very inexpensively. Most importantly, I can’t stress enough that you (or your marketing person) need to spend a day researching competitors web sites as well as sites that contain the functionality that you would desire in your own site. Make a list of the components that you like, create goals for your site, a statement of work (fancy talk for a brief describing everything you want the site to do) and then bid these out. Not to an agency necessarily – we use a combination of project managers, freelancers, local talent and foreign programmers. The delivered product should be well-documented so that anyone that understands HTML, CSS, PHP, Java, etc. can make programmatic changes. For larger sites, a content management system should be utilized so that you or your wordsmiths can update the site without a degree in computer science. Finally, be smart about promoting your site. You can go broke trying to create traffic and once you bid out a site, you will get bombarded by hundreds of companies that swear they can make your site a success. The truth is that there are recognized companies who have already figured out optimization, lead generation, nurturing, email campaigns, affiliate programs and the like. Regardless of how you approach your site, spend time researching and (please) don’t reinvent the wheel.

Yours in procurement,
Steve

Steve Gordon specializes in procurement and logistics cost saving initiatives – call him today at 865.356.3575

Remember what the Aberdeen Group says……….

“For a typical enterprise, it takes an increase
of $5 in sales to equal the impact of
a $1 reduction in procurement costs.”

Solutions is happy to complete a complimentary audit of your firm’s expeditures. Just call or write to get started.

If you want to learn how to save money on a particular commodity, just send me a comment or email me directly. I will do my best to answer your request in a future post.

Respectfully,

Steve Gordon
Senior Consultant
Solutions Business Consultants
http://www.costavoidance.org
__________________________________
”Bringing Service, Value, and Efficiency to the Supply Chain”

steve@costavoidance.org
(865) 356-3575
Skype: stevegordskype
Blog: https://innovativeconsultant.wordpress.com/
Linkedin: http://www.linkedin.com/in/stevegordonthecostsavingsguy

Opportunities in Marketing Procurement March 26, 2010

Posted by solutionsbconsultants in 1, Business Improvement, Increase Profitability, Marketing, Procurement.
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Thanks to Robert R. of New York City for his question, “Steve, I am a CFO of a medical supply manufacturer. Our marketing spend has spiraled out of control. What suggestions can you provide to help put this cost center in check?”

Great question, Robert. Marketing spend oftentimes represents a large portion of a company’s indirect spend. Without specific targets or a look at your detailed spend, I am going to provide a generalized list of items that you can focus on.

1) Rank marketing spend by dollars.
2) Focus on top 20% of spend.
3) Use agencies and outside creative ONLY for idea generation and development of concepts whenever possible. Never use them to outsource printing, video production, web-design, etc. unless you want to pay a large 25% or more premium. (Note – even though agency commission might be 10% they will always use the high cost provider (since they make a percentage of the final price).
4) Create an in-house agency to take advantage of agency discounts.
5) Resource top 20% of spend – print, video, web-design, seo/sem, etc. And source out to 7-10 supplies instead of the industry standard of 3 potential supplies. The advantages of engaging multiple suppliers in the quotation phase are based on statistics – you cannot locate innovative, competitive, and quality-oriented suppliers with a small sampling.
6) Require that all completed digital files are supplied to the marketing department including original files, fonts, images, etc. This way your in-house graphics/video person can repurpose graphics and video at no additional charge to your organization. (When I use the words “original files” I mean the original source files (such as a flash .fla file or layered photoshop file) instead of the completed file (flash video .flv or .swf or merged photoshop file). The reason for this is that you can only edit the source file. My experience is that you must require this to be done when you place the original purchase order.
7) Marketing has a tendency to go with who they know and oftentimes they have a personal relationship with many of these suppliers. Sometimes this can be useful but once a supplier knows there is no competition you can guess what happens – price creep (and it never creeps down).
8) In the web-space be careful of trying to reinvent the wheel. Chances are that someone has created that special widget or function that is needed. There are great sources for inexpensive quality code, Search Engine Marketing and Optimization, and other web services. Make sure to be careful when creating the scope of services document so nothing is left to chance and make sure to involve multiple suppliers. Even if you are in a major metropolitan area, you will need to conduct a national search. Research can help you target your sourcing.
9) Take the time to understand and document your company’s marketing strategy. Early involvement by Finance and Procurement can eliminate any rush procurements which is used as a tactic to avoid best practices.
10) Never allow marketing to unilaterally select suppliers and negotiate with suppliers. This is true with all departments, not just marketing so don’t think I am picking on marketing folks in particular.
11) Consolidate suppliers whenever possible to leverage spend.
12) Create a preferred supplier list of suppliers who provide quality service at approved pricing.
13) If you shoot video, this category has huge potential for savings. The economy and technology have produced a wide variety of talented individuals and equipment who can take your (or your agencies) concept to successful completion. Even if you are in a small market, a few phone calls can lead you to a wide variety of suppliers. Hint: Stay away from suppliers who use hardware based Avid suites or non-digital solutions Currently the best bang for the buck are editors who use Apple’s Final Cut Pro Studio.
14) Limit long-term contracts for marketing services – that means not signing any agency contract – business is tight and competitive so you as a buyer are not compelled to limit your options.
15) Develop strategic partnerships with suppliers – concentrate on value-add services, payments terms and other benefits that they can provide.

Yours in Supply Chain,

Steve

Remember what the Aberdeen Group says……….

“For a typical enterprise, it takes an increase
of $5 in sales to equal the impact of
a $1 reduction in procurement costs.”

Solutions is happy to complete a complimentary audit of your firm’s expeditures. Just call or write to get started.

If you have a topic of interest you would like me to discuss in our blog, “in-person”, or if you find a typographical error, just send me a comment or email me directly. I would like to hear from you!

Respectfully,

Steve Gordon
Senior Consultant
Solutions Business Consultants
http://www.costavoidance.org
__________________________________
”Bringing Service, Value, and Efficiency to the Supply Chain”

steve@costavoidance.org
(865) 356-3575
Skype: stevegordskype
Blog: https://innovativeconsultant.wordpress.com/
Linkedin: http://www.linkedin.com/in/stevegordonthecostsavingsguy