Buying paper in today’s market

Given the volatile and contracting paper market in recent years due to uncertain pricing and mill closures, purchasing catalog paper is no easy task these days.

In addition to market tightness, mills are facing cost pressures from rising chemical, fiber, fuel and transportation costs that are likely to result in another paper price increase in the second half of the year. So with pricing going up and supply likely to get tighter, there are a few things catalogers should keep in mind when buying paper in today’s market.

PICK THE RIGHT PARTNER

The absolute priority when it comes to buying paper in today’s climate is to buy from a reputable source — one that is supplied under a registered mill name with a full mill guarantee, says Jane Altar, director of marketing for computer reseller Wayside Technology Group.

If you’re searching for a new paper supplier, ask other publishers what experiences they have had with their paper merchants — if they aren’t buying paper through their printers, Altar advises.

And if you’re concerned about being able to source the paper you need, remember that your printer is also a broker, Altar says. “Put the onus of paper management back on your printer.” You may pay a little more, she notes, “but you won’t have to worry about managing the process.”

Jennifer Miller, executive vice president of marketing and communications for Sappi Fine Paper North America, believes in taking a holistic approach. Before purchasing paper, she says, consider the following questions:

  • Is this a supplier that stands behind its product with a dedicated technical support team that can troubleshoot problems your customers may encounter on press?

  • Is it a supplier that commits to 100% on-time, accurately filled deliveries so that your scarce inventory dollars can be dedicated to fulfilling customer needs rather than backstopping service failures?

  • Is the product consistent day in and day out on press so that costly waste and press downtime can be avoided?

CONSIDER DIFFERENT STOCKS

If you’re worried about your paper supply, Altar advises considering switching to a paper that may not be as high in demand. Supercalendered and lighter weight papers are more popular due to increased postage costs.

So, for example, you might look at a slightly higher basis weight, or a recycled sheet that may be a little more expensive and therefore not as popular. “You may find that if you are reducing page count, you can actually increase the weight of your paper and still stay under piece weight,” she says.

Catalog publishers continue to reduce the basis weight of the body stock to control postal costs, says Gary Evjen, senior vice president of sales at Wade Paper Corp., so making a change in another direction can make your book stand out. Even using an upgraded cover stock can help stimulate reader interest, he says.

Indeed, given the rise in electronic media use, higher quality and heavier basis weight papers are becoming more attractive and a stout component of brand building, says Miller.

Earth-friendliness can be another factor in catalog paper, so it may be important for your supplier to have a sustainable brand proposition, Miller notes. The environmental performance of a paper supplier is an increasingly relevant factor when choosing a product brand.

RESIST THE URGE TO OVERBUY

Price increases usually occur twice a year, unless the market is especially strong, Evjen says. But while it’s tempting to buy paper for the next issue to avoid a pending price increase, keep in mind that purchasing paper in large quantities isn’t usually beneficial. Storage, cash flow and secondary freight costs to move paper from a warehouse to the printer can eat up any savings.

Since paper inventory can be a tricky proposition, how does a merchant handle this? Catalog publishers should be placing orders one quarter in advance, Evjen says, with a latest date of change (LDC) to finalize sizes and quantities.

Another tip: Make certain your paper source provides a supply agreement with a multiyear arrangement, which protects availability, says Evjen.

You should generally not buy more paper than you will need for the next four to six months, says Wayside’s Altar. You don’t want the stock sitting around for too long before you use it, “because older paper can be less reliable and more prone to breakage on press.”

And if you aren’t producing a catalog that is consistently the same page count and circ, “the roll width you buy today may not be what you need for future issues,” she says.

Whenever you’re buying paper, Altar says, make sure you also know the roll widths and maximum weight for rolls that your printer will accept.

THINK HARD ABOUT BUYING DIRECT

Under what circumstances is it best for a merchant to buy paper direct from a mill? “Only if you are buying huge amounts of paper that you will be able to use in a relatively short period of time should you consider purchasing directly from a mill,” Altar says.

Several of the largest catalog publishers in the U.S. use paper distributors to source paper. Why? “Because they not only receive competitive prices and have more mill options, they also receive support and expertise,” Evjen says.

If the estimated savings for managing paper procurement on your own appear relatively slim, obviously you shouldn’t bother trying to do it yourself, Altar says. But you can try to negotiate down the markup the printer puts on the paper it sources for you. And if you’re successful, she says, “it may just be easier to let the printer continue to do it — at a reduced rate.”

DOS AND DON’TS FOR BUYING PAPER

You can learn plenty from the experiences of other catalogers when it comes to procuring paper. Jane Altar, director of marketing for computer reseller Wayside Technology Group, offers up some of her dos and don’ts.

  • DO FIND OUT WHAT LEVEL OF SERVICE THE PAPER MERCHANT PROVIDES

    Will the company help you manage your inventory and adjust future shipments accordingly? If a mill only partially ships an order, will it be able to get additional paper delivered to meet your press date?

  • DON’T BUY YOUR OWN PAPER IF YOU FREQUENTLY MODIFY YOUR PAGE COUNT AND CIRCULATION

    You may end up with partial rolls of unused paper — or pay more in press make-readies to print less efficiently in an effort to use leftover paper.

  • DO TAKE ADVANTAGE OF-OR NEGOTIATE-DISCOUNTS FROM YOUR MERCHANT FOR EARLY PAYMENT OF PAPER BILLS TO INCREASE YOUR SAVINGS

    You can also negotiate the stock-handling fee your printer charges when you source your own paper.

  • DON’T BUY PAPER WITHOUT KNOWING HOW IT WILL RUN ON YOUR PRINTER’S PRESSES

    If you aren’t buying on the spot market, you can request a test roll that you can use in a press make-ready. This way, the plant can let you know if there are any manufacturing issues running the stock, and you can also see how your product looks on that sheet.

  • DO CONSIDER A PAPER SOURCE CLOSE TO YOUR PRINTING PLANT

    This will not only reduce shipping charges but will reduce lead time on orders — giving you the flexibility to make modifications to your page counts and circulation later in the production cycle.

  • DON’T WAIT TO THE LAST MINUTE TO ORDER PAPER

    In a tight market, it may not be available. While you’re doing budgets, give your vendor a projection for the whole year. Include tonnage, roll size and delivery dates. This will guarantee that you’ll have paper when you need it. — JT

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