Looking back at my many years of working with label converters, I have seen a number of different people performing the estimating function in our label estimating software. Some work better than others. First let’s look at the task. It is one of the most critical jobs at a label company. If it is done incorrectly, you risk losing money or making very little. In some cases, money can be left on the table that will affect profit.
Who have I seen using label estimating software?
• Sales people
• Customer Service
• Dedicated estimators
For the estimating function to be fulfilled successfully, it is imperative to have a very knowledgeable estimator. Many shops have a number of different printing processes and equipment that can run many jobs. The estimator must be able to select the appropriate press and then calculate an accurate cost.
What are the main factors that need to be considered by the label estimator?
• The type of artwork
• Customer’s expectation
• Available tooling or cutters
• Run length
• Material used
Estimating should be broken down into specific stages:
What details has the customer provided us with? We need to select the equipment and materials that we are going to run and consider the finishing details. How does running the job on a different press affect cost and sell price? Could we buy a more efficient tool? Would it be more cost-effective to run the job digitally?
Examine the production numbers calculated. Does it reflect realistic actual production times and materials needed?
Mark up and margins
This is where estimating becomes a real art form. How much do you mark it up? This assumes, of course, that you estimated the real cost of the job. The last thing we want to do is sell the job below cost. As most people know, the mark up can vary based on a number of factors, including market niche, material used, who the customer is, etc.
Today, creating a PDF and emailing it to the customer is the best option. Your MIS or label estimating software should be able to do that with ease. The MIS should be able to format the letter and allow you to customize it. There should be no need to waste time rekeying the information into Word to send it.
Another recent innovation is enabling your customer to log on to your web site and review their entire order history. This becomes your customer’s file cabinet of estimates and gives them easy access to the information 24 hours a day.
I have discussed some of the key knowledge requirements and because of the complexity of the estimating task, I would suggest a dedicated estimator whenever possible. The estimator can focus on the task and become very good at it. Good salespeople may not have the detail-oriented personality necessary for estimating. They should be focused on closing the sale, and because of that focus, they may not be watching job margins closely. Many owners and key managers make good estimators, but their time may be better off used for other tasks. Customer service reps should be great at entering order details, and that is what they should focus on. With a good estimator handling the job engineering, CRSs can focus on servicing customer needs.
Contact us if you would like more information about our label estimating software.
by Label Traxx President Ken Meinhardt.