Accurate Cost Calculation is Key to Digital Label Printing Profitability

Accurate quoting is vital to profitability. The rise in short print runs requiring fast response means converters must give their sales teams quick access to accurate information.

How can a business confidently offer a discount without knowing the exact cost for producing a label? Or promise a specific turnaround time without understanding the different cost models associated with each press?

An effective quoting process does more than secure profitable pricing for each job: it is the foundation for long-term business success.

Detailed, specific quotes

Achieving accurate quotes, especially under time pressure, is not straightforward. Average-based pricing models cannot guarantee profitability due to frequent fluctuations in ink and substrate costs. Tariffs and material availability, for example, can significantly impact consumable costs per label.

In digital printing, the cost of producing a label can vary depending on the specific label press used. Factors such as print resolution and ink droplet size affect ink consumption, and color ink prices can vary between suppliers, even within the same ink set. Ink use can also vary with the substrate, as porous substrates require more ink to achieve the desired label coverage.

To ensure new business is both competitive and profitable, label converters operating multiple digital inkjet presses, even from the same supplier, need to generate quotes based on the specific digital equipment used. Last-minute changes, such as switching presses when the order comes in, can impact margins as costs are likely to deviate from the original estimate.

Data-driven quotes  

Precise costing is key to winning new, profitable business. Digital on-press tools that use current, up-to-date information enable converters to move away from click-charge models, which tend to oversimplify production costs and may result in overcharging some jobs while undercharging others. A more accurate, data-driven approach uses job-specific cost calculations based on actual ink consumption and substrate profiles, using the latest pricing models.

Speed of quoting can also be improved by saving and reusing job profiles on the press. This eliminates the need to recalculate from scratch, ensures pricing consistency, and speeds up the processing of repeat orders.

Digital tools can unlock deeper data insights, transforming quoting precision and ensuring every customer negotiation reflects specific time and/or budget demands. For example, on-press job cost calculators can be used to assess costs across various materials based on the differences in substrate costs and ink absorption rates. While a less porous substrate may have a higher upfront cost, it could yield ink savings that reduce overall job cost.

Insight-enabled planning can also enhance operational efficiency, for example, by minimizing the number of die changeovers required. Reducing the variety of label shapes and sizes offered can simplify job costing and contribute to lower tooling costs.

Empowering sales teams

Critically, digital technology removes the reliance on dedicated teams of experienced print estimators, enabling them to focus their efforts on the flexographic and hybrid applications in-house. Most digital label press providers include easy-to-use cost calculators in their workflow, enabling label converters to generate cost estimates for artwork uploaded to the press between jobs. The calculator estimates the number of ink droplets per color and the length of substrate used, and calculates the job estimate based on the costs held on file, including a fixed charge to cover overheads.

Some suppliers even make their on-press calculator available offline, empowering sales and estimating teams to generate quotes remotely, without interrupting production.

Conclusion

In today’s fast-paced, price-sensitive market, precision quoting is a strategic must. It’s the difference between protecting profitability and eroding margin. Between winning repeat business and losing customers to faster, more confident competitors.

Embracing data-driven tools and empowering their teams enables converters not only to protect their margins but also to build a smarter, faster, more resilient business.