Back in the dark ages—the late 1960s and early 1970s—when printers needed to quote a price for a job, they generally made an educated guess and pretty much pull a number out of thin air. The alchemy that went into determining how much to charge for business cards or letterhead involved hands-on knowledge of how much ink and paper cost, how much the pressman was earning, how much business had come in that month, and how much the printer thought the customer was willing part with in order to get the job done. If the AB Dick 360 was overloaded and things were backed up in the bindery, it probably would cost a little more. If the press was likely to sit idle for a couple of hours at the end of the day, it might cost a bit less.

It was not a sophisticated system, but lots of print shop owners made a good living using it. There was no expectation that they would be doing high-end design work in-house. Customers didn't try to buy four-color process work from quick printers. Down and dirty were the buzz words—and there was no negative connotation to them. It meant giving the customer what they wanted, when they wanted it, for a price that was reasonable and agreeable to both parties.

Book 'em, Danno!

Standardized pricing actually predates computers and software. Before there was a computer on the front counter, progressive printers used price books, which are still available, though they now take a backseat to digital solutions.

Early pricing books were a far cry from the tools available today, but they also represented a huge improvement over the guess-timates that had been used previously. Then the microprocessor came along and life changed. For everybody.

Bits & Bytes

By the mid 1990s, manual estimating had all but disappeared. By 1996, NAQP reported that 61% of printers had adopted a computerized estimating system. The percentage is far higher today. Of course, there are still some printers who pull prices out of thin air, but they are few and far between. And it's highly doubtful you'll ever find their names in any list of profit leaders. In fact, according to NAQP's 2006-2007 Pricing Study, printing companies that use estimating software, on average, report $47,000 more in owner's compensation than those using manual estimating or estimating books.

When estimating software was first introduced, the most common argument against it was the tired old mantra, "My market is different." The second most common objection was that it required too much time and effort to set up the system. The benefit was that entering basic parameters, such as rent, utilities, equipment leases, click charges, labor costs, taxes, and insurance created a baseline of operational costs.

Printers who put forth the effort to set up their software accurately, saw where margins were strong and where they needed to make changes. Those who stuck to their guns in setting prices saw their productivity and profits increase.

Those basic systems helped many quick printers make the move into small commercial work. As they refined their pricing practices and the software programs began to offer even more features, printers found that it was easier to ask larger customers for their business and to feel confident that they could deliver. What had begun as a simple pricing device was quickly evolving into a shop management tool.