For organizations still operating their own in-plant printing and transactional mail center, costs are rising. As you develop your budget for the year ahead, are you considering all the expenses? The total cost of ownership for your in-plant printing is likely much more than you think. As a result, it’s an excellent time to take another look at this part of your business and how you can reduce costs.
The Total Cost of Ownership of an In-Plant Printing
When looking at the budget numbers for running an in-plant print center, they apply in both the capital and operating expense buckets. Let’s take a closer look at all these line items.
Material Costs
The material with the biggest price tag is paper. Paper prices have been increasing since the pandemic. Supply chain issues and reductions in production are still catching up. While there has been some relief, paper costs are still on the rise. Commercial paper needs are varied, so a lot of industries are competing for this product. You can expect this number to grow, and shortages could present even more challenges. You’ll be hard-pressed to lock in the best deals as you don’t purchase paper at the volume of professional printers.
In addition to paper, you need other materials to run an in-plant printing center, including ink, toner, and other items required for everyday operations.
Printing Equipment and Technology
Advanced printers and inserters are critical to an in-plant. With transactional print and mail, you need sophisticated equipment and technology. These are capital expenses and require upgrades, on average, every five years.
Beyond printers and inserters, you may also have costs around physical servers that store the data. You’ll also need software that works with equipment to deliver consistent and compliant mailings. A conservative average for this is millions of dollars every few years. Your machinery will also need regular maintenance, often from manufacturers, so that’s one more expense.
Another software fee could be any applications you use to track transactional communications through the mail stream.
Labor
If you run an in-plant, you have dedicated employees to produce the documents. Labor is one of the most expensive expenditures for a company. In this case, your workers are purely a cost center, as they aren’t directly contributing to any revenue. On top of this, you have costs associated with compliance personnel. They may have other responsibilities, but they focus a large part of their time on adhering to transactional mail regulations.
USPS Postage
With every mailed letter comes postage costs. It’s another area where pricing is volatile. In 2023, USPS is rolling out increases, and they’ll continue. Saving on postage is only achievable with significant bulk volume.
No matter how much mail you send out, you are likely seeing this drop because more people are adopting electronic statements, communications, and invoices. You still have an obligation to deliver mailed versions for many customers, but you can expect these costs to rise steadily.
Space Costs
The final segment of expenses deals with the space itself. You have leasing costs as well as utilities. All the security components also represent budget numbers, such as security and access systems. Even if you have locked in rates for the next few years, the cost to maintain the space is high.
Since print and mail aren’t an internal core competency, you’ll struggle with finding economies of scale that drive down costs. In the end, the total cost of ownership is a number standing in the way of profitability. That’s a great reason to consider outsourcing.
Eliminate In-Plant Printing Costs and Outsource with the Experts at PCI Group
PCI Group specializes in transactional print and mail. As a result, we are able to save our clients money. We have contractual agreements that allow us the best rates on paper, and our high volume guarantees optimization on postage. All the other costs—labor, equipment, technology, and space—are spread across hundreds of customers. In the end, you can dramatically reduce your print and mail expenses.
You’ll also enjoy industry-leading accuracy, a commitment to security and compliance, access to all your jobs and tracking in a secure portal, improved quality, and more.
Make the decision to tackle your in-plant budget by eliminating when you partner with us. Learn more about outsourcing today.
