Caveat Emptor!

TANSTAAFL – there ain’t no such thing as a free lunch.

 

I’d always thought that John Maynard Keynes coined this acronym in support of one of his free market theories. Turns out that it was Robert Heinlein, one of the strangest science fiction writers to emerge from the 1960s.

The principle is simple. There is an intrinsic value to every product or service and there is an associated economic cost to the provision of that product or service. Whether visible in the price of that product or hidden in the prices of other products, the cost is there nonetheless, and must be recovered if the transaction is to make economic sense.

Caveat Emptor, which literally means “let the buyer beware,” is a sound admonition to the purchaser when the lunch appears to be “free.” Look for the catch. The lunch may be free, but it costs $4.50 to throw away the paper sack and the apple core.

Twice last week, I’ve been confronted by “better deals” that a customer can buy over the internet. The first was from an ad agency, a customer that in the past has consumed a fair amount of time with quotations and required a little handholding when the projects came through. We had quoted postcards. They asked us to meet the price of an internet printer. I passed.

The second incident involved a college student organization that wanted some flyers. The student in charge of the project had come into the store and received pricing for the project, a thousand color handbills. He called back the next day, saying that the price didn’t fit his budget. I gave him a couple of options and finally reduced the price he was originally quoted by a little, simply because I wanted to help him out. His response frankly surprised me.

“Have you heard of Magnificoprints.com?” he queried.

I replied that I had not.

“You can get 5000 of these on manificoprints for $150, and they’ll throw in a free candy bar, too!”

I suggested that he opt for the free Snickers bar, wished him good luck, and told him to call us back if he needed help. Then I began thinking . . . always a dangerous proposition.

The internet printers have been around for a while. Four or five years ago, before the dotcom bust, there was a rush among conventional printers to establish an “internet presence.” Coalitions were formed, venture capital was obtained, grand castles of sand were built and collapsed with the incoming tide.

Most conventional printshops remained “brick and mortar” operations, using the internet for the things that made good sense for their customers. AlphaGraphics, Inc. did an exceptionally good job with this, providing their franchisees (Poor Richard included) with a web presence that included facilities for file transfer, proofing, online ordering, etc.

But now there is a new generation of online printers. At the core, the model for these businesses is not much different than that of “gang run” trade printers that have been around forever. The objective is to achieve economies of scale by combining (ganging) several similar jobs on a large sheet, thereby increasing efficiency, and reducing cost and price. Most conventional printers have relied on this model for outsourcing items like single business cards where price is more important than quality concerns.

The new online printers have enhanced this model with digital printing technology that enables very short runs with little waste or setup cost.From a manufacturing standpoint, the goal is standardization of input, maximization of capacity and mimimization of cost. Relative to a conventional printer, volumes are high and unit costs are low. Margins are very low.

The marketing strategy is blatantly simple . . . low price.

“Why, isn’t this good for the consumer?” you ask. “Shouldn’t we all be buying our printing this way?”

Poor Richard’s answer is “Yes and No,” but (predictably) “mostly No.”

The model certainly works on cheap business cards where either the quality levels are not demanding or the risk is low. AlphaGraphics has depended on a Jacksonville, FL company for years that mass produces business cards. They can produce the blue and red cards for Joe’s Bakery in Macon along with blue and red cards for Flo’s Jewelry in Mobile and Moe’s Body Shop in Kalamazoo for less than what it costs me to set up my press and print a single set. Joe saves money and the outcome is fine, as long as you stay within their paper and ink parameters and the card is uncomplicated.

And there’s the first caveat. The model works for peanut butter and jelly; maybe for a hamburger. It doesn’t work for filet mignon. What’s the risk if a business card doesn’t turn out right? You change it and do it again. Outside of the time required, the cost is certainly manageable, even for a DIY designer who is using KidPix to create the card. But what if it’s your boss’s card? What if it’s the corporate brochure or the annual report that goes to the Board of Directors? What if the event is next week and you don’t have time to do it again?

Poor Richard did a little research this morning. I read the fine print. Here it is:

19. Workmanship Guarantee
Because of the nature of “gang run” style printing ModernColorPrinting.com shall not be held responsible for the following issues which may occur during our production process: variation in color, offset (smudges), cutting variations, marking, picking, cutting issues, size discrepancies (over/under), and etc. Customer acknowledges that they are receiving gang run style printing at a substantial price discount and expedited delivery times and thus said printing will not be held to the same standard as traditional offset lithography nor generally accepted printing standards. While every effort will be made to satisfy our customer’s needs, requests for reprints or credits based on quality issues will not be recognized.

http://www.moderncolorprinting.com/terms-conditions-i-4.html

And some more:

Indeed, VistaPrint takes great pride in its commitment to customer satisfaction. However, certain circumstances are beyond our control and are not covered by the guarantee. Please note that we cannot be responsible for:

  • Spelling, punctuation or grammatical errors made by the customer.
  • Inferior quality or low-resolution of uploaded images.
  • Design errors introduced by the customer in the document creation process.
  • Errors in user-selected options such as choice of finish, quantity or product type.
  • Damage to the products arising after delivery to the customer.

Please preview your designs carefully and correct any mistakes prior to placing your order. In an effort to keep costs down and pass substantial savings along to our customers, VistaPrint does not proof documents created by its customers prior to processing.

http://www.vistaprint.com/vp/ns/customer_care/help/answer.aspx?qid=2,3&xnav=Feature

Most of our customers at AlphaGraphics have reasonable expectations when it comes to their printing projects. I don’t think that smudges, marking, picking, size variations, etc. fall within those reasonable expectations. They don’t fall within my expectations for my customers’ projects. And the best designers that we work with regularly catch minor mistakes at proof. Quality-oriented printers regularly check their customers files for errors and we regularly find them. Over 80% of the files we are given need and receive minor corrections before they are printed. In many cases our customers do not even know that a change was made to allow their file to print correctly.

In fairness, I did find one online printer that I think I might almost be willing to consider. They’re called printingforless.com and their website offers a customer satisfaction guarantee. You’re still on your own with design, but they do provide soft proofs of each job online. You can get a hard copy proof by mail for an extra charge. Their website is helpful and customer oriented.

Guess what? After all is said and done, the prices are comparable to what you can get at your local printshop. For instance, the base price for an 8.5 x 11 trifold printed 4/4 on 80# gloss text is $456.25. That’s 4 days in production + ground shipping from Montana. To reduce the production time to 2 days and ship overnight brings the total to $717.80, right in line with your local printshop who will help you with your art, your proof and probably deliver the job to your doorstep.

One of Heinlein’s more bizarre characters was a human named Michael Valentine Smith, born and raised on Mars by Martians, and rescued back to earth as a young man. From the Martians, Smith obtained a super-human analytical capability, a way of understanding that Heinlein dubbed “grokking.” To truly understand something, in Smith’s fashion, was to “grok” it.

The dictionary definition of caveat emptor is “the axiom or principle in commerce that the buyer alone is responsible for assessing the quality of a purchase before buying.” This means that you, the buyer, must determine the intrinsic value of the deal. To do this, you must understand what you are buying, you must “grok” it.

There’s a lot more to printing than meets the eye. Internet printing has a lot less to offer than low price. TANSTAAFLthere ain’t no such thing as a free lunch. Grok it?

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3 Responses to Caveat Emptor!

  1. […] printing company is suffering from the low prices that the gang run internet printers offer (see Caveat Emptor!). I commiserated with a competitor yesterday who spoke about the time he spent training freelance […]

  2. […] stuff has already been gobbled up by the online, gang run printers (See Poor Richard’s post Caveat Emptor!). Most good local print companies really enjoy working with our customers and much of our business […]

  3. […] run printers a few years ago, similarly attracted by cheap pricing (See Poor Richard’s post Caveat Emptor). It is not just a little ironic that LogoWorks and MarketSplash actually represent direct […]

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