When it comes to buying paper, catalogers have been spoiled in recent years. Thanks to several factors, including the slumping economy and increased overseas competition, paper prices have been at their lowest in more than a decade.
In late 1995, for instance, 40-lb. offset paper — a common choice for catalogers — cost $1,130 per ton, according to Bedford, MA-based paper economics consulting company Resource Information Systems Inc. (RISI). As of press time, the same stock cost $695 per ton.
But shopping for paper is getting trickier. For one, paper prices are going up. A price hike on #5 lightweight coated (LWC) stock was scheduled to take effect this month (see “Groundwood #5 Going Up,” p. 48). What’s more, the oversupply that has helped keep prices low is ebbing.
“In coated groundwoods, for instance, there is not a lot of excess supply,” says John Maine, vice president of RISI. Prices are still relatively low, however, due to the improved efficiencies of mills and to the fact that prices on these papers are “coming up off the bottom of the market,” Maine says. But that could change should demand increase.
So while it’s still a buyer’s market for paper, it may not be for much longer. The following tips will help you now and, even more important, when buying paper becomes more challenging and more costly.
Tip #1: Price paper with your printer.
Catalogers that were not large enough to buy the paper directly from the mill or through a broker typically had no choice but to buy it from their printer — and they paid a premium for the service.
But Janie Downey, president of Cumberland, ME-based production consulting company Publish Experts, says that many printers have reduced the cost of the paper they sell in response to lower demand by catalogers and other publishers that have reduced their page count since the start of the economic slowdown. “Printers used to mark up papers,” says Downey, “but pricing from printers now beats out brokers and mills, and they offer better terms. Since catalogers have cut back, they’re looking for other ways to sell.”
Regina Jenkins, director of print procurement/custom publishing for New York-based luxury gifts catalog Vivre, says she deals with as many mills, printers, and brokers as needed to get the best possible price. “And nine times out of 10, you get the best price out of the printer,” she says. Vivre, which prints on an Opus gloss for the text and a #2 freesheet from Sappi for the cover, has been working with a “preferred” printer for the past two years. Nonetheless, Jenkins makes a point of getting three additional quotes from competitors for each job.
Tip #2: Consider locking in long-term agreements with mills now.
In the world of paper, “long term” usually means six months to one year, says Downey. To lock in a price with a supplier for this sort of time frame, a buyer has to guarantee to buy a certain quantity of paper. A cataloger might agree to buy 5,000 tons during the next six months at a set price or with price caps stating, for instance, that the company won’t raise prices any more than $2/hundredweight (cwt) of the type of paper the cataloger has agreed to purchase. Given how low prices are now, it’s a fairly safe bet that if you lock in now, you won’t suffer the regret of seeing them drop below what you’ve agreed to pay.
Tip #3: But don’t overlook the advantages of buying “just in time.”
The drawback to locking in to even a low price is that you could end up buying more paper than you need. Indeed, Christopher Grond, manager of paper purchasing at Sussex, WI-based printing company Quad/Graphics, notes that one mistake paper buyers can make is buying too much inventory. “A just-in-time inventory model is the most prudent for reducing capital costs.”
Buying paper as close to your production date as possible is most effective when the paper supply is high and demand is low, as is the situation today. When the market turns, it may not be the optimal strategy. But even with a long-term agreement you still have an LDC, or last date to change — the date by which you agree to have the paper paid for, and when the specifications of the paper order are unalterably fixed before the start of production. The objective, Downey says, is to get the LDC as “tight into the press date as possible” in order to accommodate last-minute circulation changes.
Tip #4: Don’t shun the small mills.
Most catalogers that buy paper through a broker or directly from the mill tend to stick to larger mills for their extensive resources. But Downey says the smaller, local mills are worth looking into: “When buying from a broker, some of the price comes from freight expenses, so if you get a small mill close to your company that can offer a great price it cuts shipping costs.”
Terry Monahan, a sales representative with New York-based paper brokerage Bulkley Dunton Publishing, says that small mills usually require an order to fill up one truckload, which comes to about 44,000 pounds. If a full truckload is not ordered, the paper mill may charge a “stop off” fee to compensate for the time the mill takes to fill the truck by combining the transport of your order with that of another customer.
A greater potential downside to buying from a small mill: “It’s more likely to get bought, and you’re a little susceptible if there’s a strike,” Downey says. Certainly, larger mills can be hit by strikes (and equipment breaks) as well, but the paper production is safeguarded because they typically have multiple bases of operation.
Tip #5: Lighten up.
It’s no secret that you can save money by switching to a lighter paper stock. Bristol, VA-based professional spa products cataloger Universal Cos., for example, has saved $400 a mailing since changing from a super-calendared (SC) #3 70-lb. text/100-lb. cover to a #2 60-lb. text/100- to 120-lb. cover in March. Universal mails 160,000 copies of its 300-page catalog a year, says marketing assistant Pam Fast.
Tom Hansen, vice president of marketing and publication papers for Elk Grove Village, IL-based paper brokerage Bradner-Smith & Co., has noticed many companies switching from a 28-lb. #5 to a 26-lb. #5.
Other mailers are going from a #3 freesheet to a #4 coated groundwood. Though less expensive than the #3 freesheet, the #4 coated is not as bright. But “80-brightness #4 sheets are so close to 83- or 84-brightness #3 sheets that some catalogers have made the move to that sheet for cost-savings purposes,” Hansen says. Opting for the lighterweight paper, he says, often results in savings of more than 10%.
It is now possible, adds Quad/Graphics’ Grond, to go lighter than a 34-lb. coated paper without running into the problem of insufficient opacity. Even when printing rotogravure, he says, “there are durable 28- to 30-lb.” supercalendared-A papers.
The enhanced quality of lighter-weight sheets, he notes, makes it easier for catalogers to weigh 3.3 ounces or less. This, in turn, enables mailers to pay for postage at the cheaper piece rate rather than the pound rate.
But make sure your paper choice does not run contrary to your style and undermine your merchandising efforts, says Michael Carton, director of print production for New York-based AGA Catalog Marketing and Design. A lighter paper may be suitable for a spring edition full of pastels, but it might not be appropriate for a fall book showcasing dark colors with the potential to show through to the other side of the page, Carton says.
Tip #6: Reconsider your trim size.
Jenkins says that Vivre has saved more than $200,000 annually from changes it made two years ago to the weight of its paper and its trim size. The catalog, which previously had been printed on an 80-lb. text, is now printed on a 70-lb. text, and the trim, formerly 9″ × 11″, is now down to 9″ × 10-7/8″.
Aside from the lower paper costs and postage (because the smaller, lighter catalogs cost less to mail), the reduction in trim size enabled Vivre’s catalog to fit on an M3000, a short cut-off press. Because printers have numerous M3000s at their plants, printing on the machines can save catalogers money: The printer can run several of the machines at the same time, speeding up the amount of time it must spend on the job.
Like Vivre, Madison, WI-based fine-art cataloger Guild.com shaved its trim size to fit on the short cut-off press, says art director Georgene Pomplun. About three years ago the company took 1/4″ off the top and 1/8″ off the side of the catalog, which is printed on a #3 freesheet and a #2 cover sheet, to fit on the short cut-off press. Guild.com’s printing costs are lower, although Pomplun can’t recall the cataloger’s exact savings.
Tip #7: Be flexible with stock.
Even if the paper market becomes tighter, the wide selection of papers available means that even if your supplier runs out of the type you normally use, a nearly identical substitute is often readily available.
Universal Co.’s Fast says she isn’t a stickler for a specific brand or type of paper. Recently, for example, she requested a Utopia exposure, a high-grade gloss paper. The stock wasn’t available, so the printer ended up printing on an Ultama, another high-grade gloss paper almost indistinguishable from the Utopia paper at an equal cost.
Tip #8: Test before you test.
With the greater choice in paper comes the greater chance of malfunction during printing, says Jeff Brundage, marketing manager, printing and publishing papers for Federal Way, WA-based paper firm Weyerhaeuser. Though the lighter-weight papers gaining popularity may have sufficient opacity, before switching you should consult with your printer and run tests to make sure the lower grade will have adequate “runability,” or reliability as it makes its way through the press.
Grond suggests that catalogers downsizing in basis weight should have a roll of the paper they are considering run through a press, with the number of times breaks in the paper occur tallied.
That’s just one of the precautions you should take before switching to a different type of paper, says Bradner-Smith & Co’s Hansen. “Make sure the printer can do the other kind of paper,” he stresses. “Some smaller regional printers may have expertise only in one area.”
Hansen also says that some papers can be made available to the printer more quickly than others: “Don’t assume that you’ll have the same lead time when you go to press as you have today.”