Growing businesses often have tight margins. One of the keys to success is understanding the projects that you should do yourself and comparing those with the projects that are more cost-effective to outsource.
This is especially true when discussing the printing of labels. There are a number of companies that print labels, but depending on the type of label you need and the material that you need your label to be printed on, they can be quite expensive. For example, printers specifically designed for Tyvek printing, like some types of laser printers that operate at much lower temperatures, will give you the best results when it comes to printing on Tyvek material. However, outsourcing printing of that sort comes at a premium. The question is, at what point is your business better off purchasing a label printer as opposed to buying labels?
Investment vs Expense
When determining whether you should purchase a label printer, ask yourself, am I incurring an expense or making an investment? Investments start to pay you back, whereas expenses drain your resources.
Understanding these differences will not only help you determine whether you need to purchase a label printer but will also help you identify the label printer you want to buy. You may not need a top-of-the-line $10,000 plus model, especially if this requires you to make payments or lease it out. When determining whether purchasing a printer or outsourcing the work is best for you, you should first take the initial expense of purchasing the printer and the ongoing costs of maintaining the printer and compare it to the return.
In this case, you should take the amount of money you are going to spend over the next X number of years outsourcing your label printing and compare it to what it’s going to cost you to purchase and maintain the printer. If it costs significantly less to purchase the label printer, over the long run, then this is the way to go.
One of the worst decisions businesses make when it comes to purchasing supplies, like label printers, is trying to go cheap. When you go cheap, the business suffers over the long run. Depending on the type of labels that you are printing, your labels will help to differentiate the product you are selling from your competition. It doesn’t matter how good the product is on the inside. If the label, or if what’s on the outside, is not eye-catching, people may ignore it. All of these things are factors that you should consider when determining if purchasing a label printer is an expense or if it is an investment. In the vast majority of cases you will see that purchasing the right label printer is a worthwhile investment.
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Take the Time to Know Your Options
You need to look past the initial cost of a label printer when determining which model is right. Let’s say your business prints 5,000 labels every single month, and you are looking at a low-end printer that cost around $3,500. The printer uses 6.7 cents of ink per label. At the outset, this might seem like a great deal. But then you dig a little bit beneath the surface and realize that that the cheap model that seemed like a great deal really isn’t.
In just ink, over the course of one year, your business is going to invest $4,000. This is in addition to the cost of the printer. After three years, you are looking at an investment of over $15,000. Let’s say your company invests $8,000 to buy a higher quality printer. This printer is only going to use 1.5 cents of ink per label while producing a higher quality product. Now, the ink cost over the course of one year drops by $900. After three years, the total spending in ink is $10,000 plus. By purchasing the more expensive model at the outset, over the course of three years, the business has saved $5,000.
This is why it’s important to examine the printer model that you are considering. You don’t necessarily want to go for the most expensive model because it has name brand recognition, but you also don’t want to go cheap because you will end up paying for it in the end.
Learn to Strike a Balance
If your business is producing large quantities of labels every month, it would be good to compare the amount that you are paying your outsourcing company with what it would cost for you to purchase and maintain your own label printer. Do some research on the life of the label printer you are looking to purchase. If the printer has a life of 10 years, then project your calculations out 10 years to see what makes the most sense financially.
Remember that in addition to the printer, you are going to be purchasing label or paper stock. Examine the prices of the labels or printer stock that is compatible with the printer you are considering purchasing. If your product is going to be exposed to moisture, you are going to want to to want to find a label that is water resistant or waterproof. Compare the prices of pre-cut labels with full sheet labels that you cut yourself.
Although sheet labels may be less expensive, you’re going to have the added labor costs and the added equipment costs of needing to cut them yourself. And labels that are pre-cut are uniform and do not always have square corners. Sometimes cutting labels yourself sacrifices quality.
An additional expense to consider is the adhesive. The type of adhesive you purchase will make a difference in the finished product. Again, you want to research price and compare that with quantity when making the final decision.
It can be unnerving breaking free from an outsourcer that you have worked for some time. The initial investment in purchasing your own label printer, paper, and adhesive may seem overwhelming. However, if you do the math and look at your business for the long haul, you will likely see that purchasing your own label printer is worth the investment.
Have you purchased your own label printer? What are the advantages and disadvantages you have seen? Let us know in the comments section below.