Dos and don’ts of buying paper

Buying paper has been a real nightmare during the past 18 months, what with prices up and supply reduced. But even though prices have softened in the most recent quarter, there’s still plenty mailers need to know about buying paper in today’s climate.

For one thing, who should you buy it from — a printer? a paper broker who negotiates with mills on your behalf? or directly from a paper mill?

This is typically a matter of company size and paper consumption: Buying mill direct is an option only for catalogers with massive volume. Small catalogers are likely to purchase paper through a printer, and most catalogers that fall into the midsize range opt to use a paper broker.

Printers can be an excellent source of paper if you have small to medium runs, if you do not want inventory, and if you want the convenience of a one-stop shop, says Tim Gable, director, production services for business supplies cataloger/retailer OfficeMax. “They are also brokers, and can get you market pricing,” he explains.

Paper merchants provide value-added services, such as knowledge of the market, payment terms and price negotiation, Gable notes, while mills offer extended period pricing. But any cataloger buying paper needs to know the market “and know your competition,” he says.

Some factors a paper buyer should always consider include the performance of paper at printer facilities, the caliper (thickness) of the sheet, availability of the stock — now and in the future — and the financial stability of the paper mill that manufacturers it.

What else do you need to know about buying paper? Here’s a short list of some dos and don’ts.

DO work closely with the printer and the mill to get specs correct, such as roll size, minimum and maximum roll diameter and core types. “You own the paper on the paper machine,” Gable says. “If the specs are wrong, you cannot print with it and must sell it quickly.”

DON’T neglect the last date to change (LDC) and delivery dates. “Changes after LDC are difficult and costly, and late paper means down press time,” Gable adds.

DON’T assume the paper weight and grade you want is comparable from supplier to supplier. Sometimes a sheet feels stiffer, brighter or bulkier than a sheet with exactly the same specifications, says Lisa Warburton, catalog/production manager for tabletop and collectibles manufacturer/marketer The Lenox Group.

DO test paper before rolling it out. “What looks good on the printed sample the vendor gave you may not complement your product line,” says Warburton.

Request a trial roll to test the printability and quality, run it with your regular printing, but do not mail it, Gable says. Then compare side-by-side to the control paper for brightness, opacity, skip dot and printability, he says.

Set up a mail test with a control and a statistically significant test panel. Then read the results for response rate and average order. Repeat the test: “If the test beats the control, consider rolling out the test paper,” Gable says.

DON’T use paper that has been sitting at the printer’s or the mill longer than six months, says Darlene Sobers, print production manager for auto parts and accessories cataloger J.C. Whitney. Older paper tends to lose moisture and may incur more web breaks on press, she explains.

DO be cautious when purchasing paper from a seconds house. This is an operation that buys paper from the mills and others that wasn’t made to the quality standards of the grade — for instance, a grade that is supposed to be 85 bright but that tested at 81 brightness. Paper from a seconds house may have been rewound (resized), Sobers warns, so it could be baggy on press. Or the paper could be damaged where you can’t see until it is on press.

DO find out the printer’s requirements, such as the minimum basis weight it will print. “Have dummy samples trimmed to size using basis weight paper you want to use to determine weight in the mail,” Sobers says.

DON’T continually go back to your merchant as pricing trends down, says Daniel Walsh, vice president of catalog/publication papers at distributor Bradner Smith & Co. Getting price concessions is all about timing, and continually asking for small incremental savings is counterproductive.

DO take advantage of — or negotiate — discounts for early payment of paper bills from your merchant to increase your savings, says Jane Altar, director of marketing for computer reseller Wayside Technology Group. Also, negotiate the stock-handling fee your printer charges when you source your own paper.

DO consider a paper source close to your printing plant. “This will not only reduce shipping charges, but will reduce lead time on orders so you could have the flexibility to make modifications to your page counts and circulation later in the production cycle,” Altar explains.

DON’T partner with a merchant that doesn’t have a separate, inside customer service representative to handle your business, Walsh says. This person is crucial to handling the paperwork and emergencies and taking the burden off of the buyer.

“A good CSR can be the backbone of a great customer relationship,” Walsh says. “Often, he or she talks to the client even more than the sales rep.”

DO keep track of your inventory and consumption. Use paper in inventory first, even if that means trimming the paper to the size you need. Warehousing unused paper can really affect your bottom line, Warburton says.

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 you’ll have paper when you need it, Warburton says.

DO negotiate paper price to hold for at least three to six months; negotiate a price cap if price increases or decreases in the marketplace; and make sure you have paper when needed.

DON’T sign a contract. It does everything for the paper merchant to lock you in, Walsh says, but a contract does very little practically for you. All agreements can be worked out in a nonbinding way for the cataloger.

Shop around for the right partner and paper

Warburton concurs with Walsh about not signing a contract. No respected distributor will quote a price that is not backed by the mill. But certain things, such as price and the length of time that price is good for, should be in written form; either a letter or e-mail will suffice.

What’s more, once an order is placed, “the paper buyer should review every detail of the merchant’s acknowledgement, making certain everything discussed is correct: price, roll size, paper grade, basis weight, shipment location and due date at the printer,” she says. “Once this is acknowledged to the cataloger, it is incumbent upon [the paper merchant] to make sure everything is correct.”

DO compare samples from various mills, says Lisa Warburton, catalog/production manager for The Lenox Group, manufacturer/marketer of tabletop items and collectibles. “Not all 45 lb. [stock] feels the same, and not all brightness looks the same.”

Shop around for the right partner and paper

IF YOU’RE SEEKING A PAPER SUPPLIER, start by getting recommendations from peers, says Sarah Fletcher, creative director for consultancy Catalog Design Studios. “If you have good relationships with other direct mail companies, ask them who their favorite vendors are.”

Should you visit the paper company before agreeing to buy from them? It’s probably not necessary if the paper mill has a solid reputation, says Darlene Sobers, print production manager for auto parts and accessories cataloger J.C. Whitney, “although it is fascinating to see how paper is manufactured.”

Do make sure any potential merchant knows your paper grade and has a position at multiple mills, says Tim Gable, director, production services for cataloger/retailer OfficeMax “They work for you, not the mill — don’t let them steer business to their favorite mill,” he says.

As for selecting a particular paper, Fletcher says to shop around, ask questions and run what-if scenarios. And don’t be afraid to look at lower grade papers, she says. Some of the groundwood papers are as bright and weigh less than some of the #3 [grades] on the market.

But keep in mind that “cutting costs on paper can make a high-end catalog look cheap,” Fletcher warns.“If you need to cut costs on paper, try cutting back on sales books rather than full-price books.” — JT

Dos and Don’ts for Handling Web Catalog Requests

You can profitably convert web requests for your catalog. But Web requesters have a much shorter attention span than traditional catalog requests, so you have to treat them a little differently.

Here’s some advice on what to do – and what not to do – when fulfilling web requests:

  1. Do send the catalog immediately. You have to fulfill these requests with first class mail or, even better, with an expedited delivery mailed the day you get the request so they get the catalog right away.
  2. Don’t forget to send them a thank you within an hour of receiving the request, offering the recipient a promotional deal to order now.
  3. Do send them a stream of follow up e-mails in addition to the catalog.
  4. Don’t assume that the orders that come through the call center from Web requested catalogs represent the full demand for orders. If they ordered the catalog on the Web, more than 80% of the initial orders will be placed on the Web. You need to have some match back analysis process in place to measure the full demand.
  5. Do direct them to your on-line catalog or send them a link to your on-line catalog or home page so they see the merchandise the day they request your catalog.
  6. Don’t hope you can mail them more than one or two catalogs. The old cycle of mailing four to 10 catalogs to a requester is obsolete and a guaranteed profit drain.
  7. Do optimize those web requests at your co-op database and suppress those households that don’t buy through the direct marketing. Also suppress those households that don’t buy within your product category. The chance of success is so small it makes sense to suppress lots of web requests after you’ve sent them an initial catalog. Send multiple catalogs only to those households that you can identify through optimization as live households currently buying within your merchandise category.

In the old days you could spend three months trying to convert a catalog request into a buyer. Now you should focus on converting them within the day and within the week to placing that initial order. Attention spans have tightened up with the web so don’t waste your profits mailing to catalog requests long after they have lost interest in your offer.

Jim Coogan is president of Santa Fe, NM-based Catalog Marketing Economics.