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How to reduce cost

Here is an exercise we have¬†demonstrated to¬†many clients over the years, the net result being saving money on your label requirements.¬†¬†It was originally an excerpt from our monthly Newsletter called “Label School with Principal Campbell”.

The example given is a small client that doesn’t have huge buying power.  We have completed several large rationalisation programs saving tens of thousands of pounds for our clients.  We do not look to reduce quality to reduce cost; instead we look for new and leaner more efficient ways of fulfilling the same requirements.

Jamie Campbell is the Sales Director at County Labels and self confessed self adhesive label buff.  Label School with Principal Campbell is a regular feature of the Newsletter which you can subscribe to here.

Ok quiet at the back‚Ķ‚Ķ..you might learn something. Today‚Äôs lesson is ‚ÄúHow to save money on labels‚ÄĚ

Firstly you need to understand a simple principle that is true of all printing processes and not limited to those used to print and convert self adhesive labels. The principle is, there is a fixed setup cost of every press, it can be broken down into how many ink stations need setting up, how many cutting stations are to be used, how many non standard colours need mixing etc.  Each one of these component parts of a setup has a fixed cost irrespective of how many labels are then made.

Again as with all printing processes the more product that is subsequently run, the further diluted the static setup costs become, in turn reducing the unit cost of each product (label).  So the more labels you order the better the unit price becomes.

Jenkins I know you don’t want to order more labels, if you sit quiet long enough, I’ll explain how you can get the better price but not have to take twice the volume in one go.

Ok so, if you order say every 2 months, ask us to quote a 4 month volume, but tell us you want to take them in 2 drops 2 months apart, invoiced separately.  Although there is a provision made to finance the extended credit terms, it does not outweigh the saving made by merely committing to an extended volume over an extended term, simple!

Below is an example to demonstrate the point.

2 months supply of labels = 5,000 labels at £22.00 per 1000 = £110.00
4 months supply of labels = 10,000 labels at £16.00 per 1000 = £160.00

£160 + 15% (provision for extended finance term) = £184.00

If the labels had been ordered twice, the total cost would have been £220.00

As the labels were ordered once with a commitment to take the second volume 2 months later, the labels would have cost £184.00 a saving of £36.00

If you like the sound of this money saving principle or perhaps haven’t got a clue what I’m banging on about, please contact our Sales Team on 01625 574422

   
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