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What You Need to Know About the Paper Industry

What You Need to Know About the Paper Industry in 2021

We are going to just jump right into it. Yes, the pressures from the pandemic and from other recent world events have the cost of a lot of things on a rise, including lumber, fuel, paint and now even paper. So, what does this mean for your marketing materials and what options are there for your company to keep its budget on track when making your print advertising decisions? First and foremost, you need to know exactly what is going on, so you know why these changes are happening and so you are better equipped to choose the best options for your company.

What is Happening in the Paper Industry?

There are changes occurring in the paper industry resulting in increased paper costs and it’s important to understand why these changes are happening along with the ways you can keep your marketing efforts running smoothly. Let's start with the bad news—but don’t worry we’ve got solutions for you. Here is what's going on and why the cost of paper is climbing:

Operating Rates are High

What does high operating rates mean? Sounds positive but in fact it isn’t. Operating rates are what measures the capacity utilization at the manufacturers or paper industries. When operating rates are lower or optimal—around an 80-95% threshold—inventory is built which allows for competitive prices because essentially there is enough paper for everyone, and production is running efficiently.

When operating rates are high, inventory decreases, and prices rise as a result. This is typical of supply and demand. For example, say you own a grocery store and have no problem obtaining oranges at a great price which means you can sell your oranges at a lower price than your competitor. If you are having trouble obtaining apples, this means the apple distributor likely has a shortage for some reason and they are going to sell you the apples they have at a higher price because there’s a large demand. You own a grocery store and have customers that want apples and so does your competitor, so you both sell your apples at a higher price to make the same profit you usually do. Printers are facing this apple issue but with paper.

Paper Inventory Is in High Demand

Inventories are low while paper is in high demand. Many paper import companies are decreasing their volumes because of high shipping costs, which is causing higher demand at domestic paper mills. The raw materials used to make paper are also in short supply due to the higher shipping costs, so the mills can’t make enough paper to keep up with the current demand. Paper is in high demand for multiple reasons:

  • Supply and demand
  • Increase in consumer spending
  • Delays due to COVID-19 impacts and protocols
  • Retailers getting ready for the holiday's way earlier than usual

Increase in Consumer Spending

Consumer spending increase. 

That “increase in consumer spending” bullet above gets its own section because it plays a huge part in the entire paper supply chain struggles.

Restaurants, hotels, and entertainment industries saw a huge hit during the pandemic. Yet, the spending on goods skyrocketed! So, while consumers were buying home office supplies, classroom and new hobby supplies and anything else that made their time at home better, shipments of paper and the raw materials used to make paper were being pushed off due to low demand. Not to mention COVID-19 port protocols forcing longer dwell times on container ships resulting in delays unloading and increasing the demand for more supplies.

Today, the world’s economic progress is in such a recovery mode as it reopens, that even more goods are flowing in and being purchased. This means retailers and consumers are getting great prices and purchasing way earlier than ever before on holiday and back-to-school materials. Which also means, paper is yet again being sent to the back burner when it comes to containers needed to ship materials.

What Options Do I Have?

Things may seem a bit challenging but don’t worry. Print companies like Conquest Graphics have prepared some solutions for businesses to keep using the power of print and direct mail marketing while avoiding the issues surrounding all things paper as much as possible.

Here are several ways you can keep your marketing efforts going while mitigating the mess that is occurring.

Plan Ahead

Plan ahead on print jobs to save some money. 

Plan ahead and enter jobs that you need produced later in the year now. The earlier you plan, the lower your overall prices will be. For one this includes the price of the actual paper itself. Because there isn't a crystal ball telling us when these paper prices will return to normal, we can only prepare for them to keep rising until the issues are resolved. This means the paper prices are the lowest they will be for some time, so the best option is to order your marketing materials now.

Secondly, when you plan ahead and order your print advertisements much earlier; you can extend the turnaround time and avoid needing a rush order. Longer turnarounds like 7-10 days save you money even compared to the standard turnarounds offered with each product. For example, say you needed 250 pocket folders quickly with a turnaround of 4-6 business days, if you planned way ahead you could choose a 10-13 business day turnaround while saving around $280. This plan ahead tip will always work, because when you allow for a longer turnaround, you allow production more time to produce your materials.

Quote Your Projects Now

If you know you are going to be ordering print or direct mail a month or a few months from now, along with the parameters and quantity, but aren’t ready to order right away, you can quote your projects now. The price on the quote may be less than what it is when it comes time for you to actually order your materials. However, we will pass along the price increase that occurs between the time we quote to the time you need to order, so you are better prepared to make any adjustments to your budget or order.

Simply have your representative quote your projects today or give us a call at 800-707-9903, chat in through the LiveChat popup or email customerservice@ConquestGraphics.com.

Purchase Paper Now

Some commercial printers like Conquest Graphics have a big enough facility to inventory your print materials so they are ready when you need them. That means we have the space to store your paper as well. Which also means, going back to the reason you would want to plan ahead and take advantage of the current lower paper prices, you can pay for the paper now if you have large orders.

This is especially a useful tip if your company regularly uses print and direct mail for large campaigns but may not have planned or designed the marketing materials just yet. Simply speak to your representative or contact customerservice@ConquestGraphics.com and ask them about purchasing paper now. This will mean when it comes time to have your materials produced you will need to submit a custom quote or ask your representative to build a quote for you, but you will be paying the current paper prices instead of the prices paper will be a couple of months from now.

Stick With the Standards

Conquest Graphics Preferred Stock 

No matter the challenges the paper industry is facing, standard or “preferred” stocks and standard sizes will always be cheaper and available faster. Depending on your printer, the standard paper selections they offer are of high-quality and will still make your marketing message stand out. These preferred stocks are regularly ordered by your printer so that they are always on hand which makes them cheaper for you. We recommend utilizing our free paper sample booklet so you can see and feel some of our most popular standard paper selections here at Conquest Graphics.

For the size of the paper, the standard sizes available are always cheaper as well because the printer always has their machines prepared to make those cuts.

In most cases the custom options aren’t far off from the standard selections either. So, stick with the standards, chances are your audience won’t notice the size or paper difference, they’ll just be excited to receive your message on a professional looking and feeling material. Plus, you’ll save some money.

We know that the paper price increase is a bit daunting, but one thing we can ensure you, is that we will always provide you with the best prices we possibly can. If you have any questions or concerns, or are interested in any of the options available please don’t hesitate to reach out to your representative or contact our team by emailing customerservice@ConquestGraphics.com or calling 800-707-9903. Also, if you are interested in any of the options above, like planning ahead, click below to explore some our most popular products today!

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