If you take a quick look at the survey at the beginning of this supplement, you may see something that surprises you. The perception of some in print is that the practice of outsourcing finishing work is slowly disappearing, but in fact, significantly more was spent on outsourcing finishing work this year than last.

It’s true, certainly, that there are fewer trade finishers around than there were, but those still operating are benefiting from the fact that print is living in an uncertain time: one week the press could sit silent for long periods, the next week work will be flying through the door. The kit and staff levels, then, are aimed at the median amount of work. Hence, when it’s busy, things can get backed up, but the work still needs to get out of the door on time. So printers turn to trade finishers.

Unfortunately, this age-old process is not as clear cut as it used to be. The rise of in-house finishing has meant that the relationship between a printer and a trade finisher has become a very difficult one. Before finishing was brought in-house, a printer would come to them with the specs for the job, the trade finisher would quote for the work, and the printer would decide who to place the work with.

In-house finishing throws a spanner into the works – a spanner with big pound signs embossed on it. When a company is outsourcing a process they usually perform themselves, a gulf appears between how much it would cost them to do it in-house and how much the finishers are quoting: the printer thinks it should cost £300, the finisher says £500 minimum.

Part of the problem is how the printer treats finishing as a process. Some in the trade finishing community believe that printers don’t consider the finishing process comprehensively enough. Even though specialist work has now become the Holy Grail for a printer, the finishing element, which will differentiate the bog standard long-run sheets from something you can sell at a premium, is looked at by them in only the most cursory of fashions.

Graham Masters was formerly managing director at Phoenix Print Finishing, which went into liquidation last year. He says that often the printer will "throw the finishing in as a bonus".

"Sometimes they simply won’t cost it out entirely or they may subsidise it just to get the print," he explains. "All they want to do is get the press running, many of them will be operating 24 hours a day, so for those 24 hours they want the press constantly running to make it worthwhile. If dropping the price of their finishing in relation to the whole job ensures that they can keep it running, then they will do that."

Marginal gains
This means that when the work is outsourced, they find a big discrepancy between what they charge for the work and what the trade finisher needs to charge.

However, for Lorenzo Fardella, financial director at First 4 Print Finishing, the problem is more the fact that the trade finisher needs to charge a margin, rather than the printer simply "throwing finishing in".

"When the printer completes a finishing process in-house, it is not for profit, a printer’s profit comes from its printing," he reveals. "When we cost a job, everything goes on to the finishing – the wages, the electricity, rent. We will work out the cost and then add a small margin; the printer won’t add a margin."

While some printers understand that finishers also need to make a margin, some are loathe to suddenly up the job cost when they have already agreed a price with the customer. Some believe that trade finishers could bump the cost down a little more if they really wanted to. Not so, says Fardella.

"The margin on finishing is so small already," he explains. "The only reason we make a profit doing finishing is because we do a lot of it, you couldn’t make a profit doing a small amount of finishing, the kind of amounts that a printer does. So we have to hold that margin where it is, otherwise what is the point of doing the job?"

So if the margin can’t be cut, perhaps, say the printers, some fat can be trimmed from the overheads? Well, this leads us to another of the differences between the business operations of a printer offering finishing and a print finisher. While the printer needs their press running 24 hours a day, when it comes to the finishing kit there is no such urgency. This is not so for the trade finisher, which has to have all its finishing kit running all the time, and that means a larger staff overhead for finishing to keep the kit working.

"When we were working, we always had to make sure that the machines were running," says Masters. "Ultimately, what that means is that finishers always look more expensive than it costs for printers to produce the work, its simply a case of covering the cost of your employees and if we have more than they do for finishing it is going to cost us more to produce."

As well as the cost of the employees, there is the added issue of the equipment used, which Masters believes leaves finishers at a disadvantage in comparison to small and medium-sized printers.

He says: "The printer will probably be doing the work on a bookletmaker and they will cost the job based on that. When it comes to a finisher, suddenly its being costed on something like a Muller Martini. The quality will be better, but the cost may be higher."

Of course, markets dictate how much you will pay for something, and when a printer is desperate, it doesn’t matter if it will eat into their profit – if they have to have that job done they will pay the price to get it done.

But, around 2008 that dynamic began to change and the balance of power was pulled away from the finisher.

Masters explains: "If a printer rings around and nobody will do that £500 job for £300 you don’t have a problem. If you are the best option they will come back to you. However, around 2008 that changed: overcapacity came into play and all of a sudden, when the printer was ringing up, they would be able to get it done for the price they wanted to. I think it’s why finishers suffered more than printers during the recession and its still happening."

No room for manoeuvre
Finishers aren’t the only ones that have gone through pricing battles of course. But printers fighting for work on cost have made it even more difficult for the finishers to achieve a fair price on jobs.

One finisher, who did not wish to be named, says "Half the printers are doing work for cost, so they haven’t got anywhere to go if I turn around and tell them it’s going to cost more than they thought it would. If they have taken a profit into account there is room to manoeuvre, maybe I will have to drop my profit and they will have to dropped their’s, but at least we will both be making money. But if they are simply doing the job to get their presses running, they can’t budge when I turn around and tell them the finishing is going to be a few hundred pounds more than they thought it was."

The relationship between printer and trade finisher may be flourishing in terms of workload, then, but there seems to be something of an impasse on price. In-house finishing has skewed the printer’s perception of costs and trade finishers willing to accept work below cost price are doing nothing to help the situation. It seems that what is needed is for trade finishers to stand together and ensure margins remain in trade finishing, giving printers, and ultimately their clients, no option but to realise that, if they want a job doing well, they need to pay. Trade finishers are performing an essential role and it’s up to printers to ensure that gets the financial recognition it deserves.