Strike When the Iron’s Cold

By Dawn Lospaluto
In May 11, 2015

snowblowerThe thermometer hit 86 degrees yesterday, so I think I’ll go shopping for a snow blower. After all, I know I’ll get a much better price and have a lot more choices than if I try to buy one when it’s actually snowing.

Supply and demand generally dictate price. Supplies, installers, and service personnel are stretched thinnest during high-demand periods and that means sellers can charge a premium.  When no one is clamoring for a product, factories are slow, workers have time on their hands, and discounts proliferate. Whether you’re buying a snow blower or a swimming pool, off-season is the most cost-effective time to buy.

Vendors generally offer the best prices when they are trying to fill underutilized capacity. Overhead, taxes, and salaried workers must be paid whether equipment is running or idle, so it makes sense to trim profits in order to meet basic running costs and keep things humming when demand is low.

There are other benefits to lowering prices to increase business during slow times. First, sometimes an attractive offer can bring in new customers who will stay with a company long after the initial sale is complete. Second, work that can be brought in off season can help reduce the pressure on the company during peak times, saving it from having to pay workers overtime or even turn customers away when things are at their most hectic.

Printers and mailers have off-seasons, too. My colleague, Epicomm Chief Economist Andy Paparozzi, surveyed members of his State

of the Industry panel about their busiest and slowest times of the year and discovered the following:

  • Their busiest months were October (68.3%) and September (67.1%).
  • Their slowest months: February and July (14.6% each).

graphAs this calendar of the respondents’ activity levels indicates, most (not all) printers experience two very slow periods: the winter months of January and February, and the summer months of June and July. During February and July, for example, activity is barely one-fifth of the September and October workload and just about one-third of work being done in March and April.

If some of the work being done in September could actually be done in August, it would help printing companies avoid both underutilization of capacity in the summer and excessive demand in the fall. One way to help even out the workload is to take a page from the snow blower retailers and offer an off-season deal. A 20% discount on holiday cards, for example, might be enough to encourage companies to select their holiday card design in late July rather than after Labor Day.

If a lot of your business revolves around pre-holiday work done in September and October, why not develop a “Christmas in July” promotion, bringing customers into your shop for Christmas-themed cookies and hot cocoa (or iced tea) and a chance to look at new holiday designs, place a nicely discounted order, or even win free graphic design assistance or a free bonus 50 holiday cards.

If you work drops like a snow-covered stone as soon as the holidays end and stays low until March, why not develop an “early spring” discount program for the first week of the new year, serving flower-shaped cookies, giving away house plants, and offering a discount if an order traditionally printed in March can be moved back to February.

You might be able to strike for higher profits when the printing iron’s hot, but you can still take some steps to increase business and improve capacity utilization when it cools down

Dawn Lospaluto

Epicomm Senior Director of Communications, Dawn has been the editor of Epicomm 's "Bottom Line" magazine and its predecessor publications, "NAPL Business Review," Printing Manager," and "The Journal of Graphic Communications Management," for 20 years. She also writes and edits several Epicomm member print and electronic newsletters, including [Re]View, Management Bulletin, Highlights, and Discover; press releases; and various marketing materials; and oversees Epicomm 's book publishing program. Dawn previously served as corporate managing editor for Allied (now Honeywell) Corporation and as a reporter and editor for New Jersey's largest evening newspaper. She is a graduate of Douglass College (Rutgers University) and holds an M.A. degree from Fairleigh Dickinson University, where she has served on the adjunct faculty.

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