Understanding pricing: a product wrap case study

We have a customer that needed to print a variety of different product wraps. Their goal was to keep the per-unit cost low as that is what impacts the overall per-unit profitability.

Their initial order was as follows: 6 versions, 2 versions of 2,500 each and 4 versions at a quantity of 1,000. The per-unit cost came in at $0.7738.

In an effort to try to get the per-unit price down, they added: 9 @ 250, 3 @ 500 and 1 @ 1,000 to the initial order of 2 @ 2,500 and 4 @ 1,000 for a total of 13,750 total product wraps. These additions actually increased the per-unit price to $0.8560, because it was the ratio of proofs, plates, and make-ready's compared to quantity that was increasing the price per piece.

The proposed solution? We set the minimum to 1,000 labels for each version, which increased the total order to 23,000 and brought the price of each label down to $0.7482.

A minimum quantity of 500 to 1,000 is a good rule of thumb for a minimum make-ready on the larger offset presses with a press sheet size of around 28"x40".