The Difference Between the Price and Value of Printing Ink
For years, printing ink companies have complained that printers are increasingly looking at ink as a commodity, rather than considering the value that ink brings to the printing process.
Unfortunately, it is not much of a secret that in the rush to gain market share, some ink companies have brought this perception upon themselves, whether it is by selling their product on the basis of price alone or by throwing in additional servicesat reduced costs. It is also a real problem that changing this perception is difficult, especially as the economy remains slow for the printing industry.
It is interesting that some ink companies have been able to succeed in focusing attention on the value of their ink as it relates to the total cost of print. By proving this value, these companies have been able to earn a better return on their products.
It’s not hard to understand that ink has a major impact on the cost of printing. For example, what exactly has the printer saved if a less expensive ink does not come up to color quickly, thus leading to increased waste and make-ready time? If that ink breaks down at higher press speeds or does not offer the necessary pigment strength, how has the printer benefited? More accurately, how much has the printer lost? Simply put, a less expensive ink may very well cost more in the end.
Ink industry leaders are well aware of the perception that selling ink is often done by price first, and they are also aware of how difficult it will be to change the nature of the business. In “The True Value of Ink,” beginning on page 18, ink industry executives discuss their views on the issue of the price of ink relative to the effect that ink has on the total cost of printing.According to the National Association of Printing Ink Manufacturers (NAPIM), the earnings before income taxes (EBIT) for the ink industry were 5.2 percent in 2002, which is nowhere near where it should be.
For the ink industry, the time has come to develop sophisticated models to show how a higher-priced ink may ultimately save printers money on the press. Obviously, not every printer needs extensive service, and ink companies need to price those jobs accordingly. Once those models are developed, it then becomes essential for the industry to share in the value that its products provide.
The goal of business is to make a profit, and there is no justification for the ink industry to be earning such a relatively low rate of return for a product that delivers so much value. Ultimately, it is up to ink companies to reverse that trend.