How much digital printing warrants buying a printer?

[paul luszcz]

We are currently outsourcing all our digital printing for the first time in almost 20 years. While I love it in principle, it's not always as easy as it sounds. Especially when a print comes in wrong or damaged in transit and you need the print that day.

I have always believed there are far more wide format printers in the world than the world needs. And I also know Apple doesn't make iPhones. So I shouldn't have to print my own prints, right?

But I think I'm at the point where it's not any easier, and it may be hurting our customer service to not have in house printing capability.

So to my question, how much digital printing (by any measure you choose) warrants buying a printer. For the accountants in the group, let's say the printer cost about $20K.

 

[chafro]

Outsource.

Apple outsources their large format prints! And they spend millions on their annual prints.

stick to what your business do. spending time and money on your prints will only make you waste resources on your core business.

 

[TheSnowman]

I seem to get in moods, and it probably has to do with how busy I am, where some times, I just want to print everything in house, and other times, I'm so busy, I have to outsource it. That being said, I still normally fire it up every day for SOMETHING. I make a lot of money on rush order banners that I otherwise wouldn't be able to handle if I had to sub them out. Things like wraps, I don't even mess with printing them in house because it's not worth plugging up my time, printer, and work area for a long time trying to do that myself, when there are shops set up to just print stuff like that all day long.

 

[paul luszcz]

Funny (except it's not) that this print arrived today and is needed for an show tomorrow. I can only offer to touch this one up today or have a reprint tomorrow. This is the kind of thing I'm concerned about. Anyone know where to get a 96 color set of Sharpies?

 

[fozzie]

A lot of different ways to figure but I would start with a simple cost analysis per sq.ft.
For simplicity compare 13 oz banner.
Cost of goods-
Vinyl. $.20 sqft Includes waste
Ink. $.25
Grommets. .05 sqft. Grommets $.10 each

Cogs sq ft. $.50

Labor sq ft - $.10 Figure $20/ hr. 200 sq ft hour
Assume front end rip/file setup offsets time sending files/coordinating outsourcing

So labor & cog per sqft. $.60

Outsource cost per sqft. Let's use $1

Outsource cost apprx $.40 sq ft more than printing in house

Printer monthly cost. Assume 20k borrowed 3 years 7%. Monthly payment $618.

Let's add $175 month insurance, electricity, extended warranty, parts, misc.

Printer monthly cost first three years $793 - round up $800

So in this scenario would need to outsource 2000 sqft 13 oz vinyl each month to break even for printer. 2000 x $.40 = $800

Of course, your numbers will be different and loan/ lease different, but should be a fair starting point.

 

[paul luszcz]

Thanks, that's a good way to look at it. The in house costs you use seem real but the outsource costs are much higher than $1/SF. I buy a mix of printed media, not just banners, and spend around $2000/month. I certainly don't buy 2000SF/month.

I'll try to convert one set of units ($/SF) to the other ($/month) and see, but I suspect I'm still on the outsource side of the equation.

 

[fozzie]

its not an exact science, but it helps.

if you look at those items you mainly outsource and the monthly average sqft for each and then compare, it can give you data that will help you make your decision.

recommend you factor in waste in the cog's. that can be as high as 20-30%.

 

[fresh]

We are really happy to have our printer. At least once a month we get a rush job that justifies owning the machine.

And the more prints you outsource, the more you get back that are crap. I was sick of relying on others to produce a quality print.

A few words of advice... don't get a print/ cut machine, the cut isn't nearly as good as using your stand alone plotter. & YOU NEED A LAMINATOR. We used a big squeegee and boy oh boy its a pain. I can't believe it took me so long to order a laminator, it rocks. If you plan on doing any wraps, you really need one.

 

[paul luszcz]

We bought our first wide format printer (and laminator) in 1996. We've had five wide format printers in that time and are still using our original laminator (a 62" Seal). Love the laminator.

So why am I asking this question?

Well our latest printer (an HP 8000) is six or seven years old and on its last leg. As it started to print poorly (banding, wasted prints, time and ink) we started outsourcing more and more work. We finally gave up using it altogether (if anyone wants it, let me know) and have been outsourcing 100% of our work for the past year.

When I reviewed our latest P&L I noticed digital printing was now averaging $2000/month. Knowing the conversion formula would be very helpful in making an objective decision. I know I'd love to be able print in house, but worry that I'd still outsource a lot of prints and don't want to tie up a lot of cash for what is an emergency rush job printer.

I'm going to go back and compare previous years to see if Materials, Ink and Labor have gone down to compensate for the increase in Printing costs.

I would think the printer suppliers would know the "rule of thumb" to determine when to consider printing in house.

Any help is appreciated.

 

[player]

I would not want to be in the sign manufacturing business without a printer/cutter and laminator.

The cost of the equipment amortized over 5 years, vs gross sales makes printing in house a no brainer to me.

 

[the graphics co]

If your main concern is upfront cost and not using it enough, why not buy a used printer at a large discount. I have seen a number of L25500's available for around $5000, if you can use that to reduce your outsourcing by 40-50% you will have paid for it within the first year. Just a thought.

 

[TCBinaflash]

It may seem worth having the printer in house but don't neglect the inventory on hand expenses, rolls and rolls of media, the finishing equipment, tables, tools, labor etc etc.

I don't think I'd produce in house unless I was doing $10k a month let alone $2k. An that is a 1 or 2 man shop netting 120k yearly.

Unless I was actively planning to grow my business, not just produce what work I normally get.

Now if its keeping clients happy that do other work, that may take some more business math. You may be the only one with enough knowledge of your biz to judge that.

IMHO

 

[FatCat]

It may seem worth having the printer in house but don't neglect the inventory on hand expenses, rolls and rolls of media, the finishing equipment, tables, tools, labor etc etc.

I don't think I'd produce in house unless I was doing $10k a month let alone $2k. An that is a 1 or 2 man shop netting 120k yearly.

Unless I was actively planning to grow my business, not just produce what work I normally get.

Now if its keeping clients happy that do other work, that may take some more business math. You may be the only one with enough knowledge of your biz to judge that.

IMHO

Agreed, $2,000 a month makes the most sense to sub out - even with the drawbacks you mention. Honestly, you would barely be running enough work to keep the printer clean and operational on it's own at that volume. My personal opinion for a small shop is $8k-$10k/mo retail is the minimum amount you should be doing before getting a printer in-house.

 

[eahicks]

I can't imagine being in this business period without a printer. We print 90% of what we make. 2 printers running all the time.

 

[hotrod46]

No SUB stitution

Ten years ago there were printers but there did not exist the wealth of "to the trade" shops we have today. The idea of subbing out $5-8-10,000 a month is doable. The customer has a problem, you solve it. No rule you have to print it in-house. That said, and assuming a new printer of $20,000, I advise those that seek my help to sub the work until it passes 1/4 the cost of the printer, EACH month. It has already been pointed out that the cost of the printer is only the start. Skads of materials and probably you should factor in a maintenance agreement. Good Luck.

 

[rjssigns]

We sub out all the big jobs. Big is defined by square footage or 100's of units. Our printer gets used for rush jobs and small runs. This includes t-shirts.

Boils down to this: Do you want to lock down a client then babysit the printer, cut the substrate, laminate, install to substrate etc... Or have your sub deal with that while you lock down the next paying job?

Classroom assignment: Google opportunity cost and thoroughly understand the concept. Then Google carrying costs and do the same. Final thing to understand is leveraging available resources.

 

[k.a.s.]

Buy the printer, don't look back.



Kevin