On the pricing front, mills announced yet another $3 per hundredweight (cwt), or $60 per ton, price increase across the whole grade spectrum, effective April 1. This marks the fourth consecutive quarter with an increase in the cost of paper.
Delivery is taking longer. Some mailers are saying that the last-date-to-change (LDC) time-frames have gone from three to four weeks, to six to eight weeks, depending on the paper mill.
That's if you can get your paper. Mill shutdowns continue to put a crimp in the catalog paper supply. In some cases, mills have simply stopped producing some sheets.ÆøÄÒ»¤ÏÏÐÅÏ¢Íø
School uniforms cataloger French Toast was in the process of locking in its paper costs for this year's catalog shortly before this issue went to press.
¡°In just the last week, prices increased about 3%,¡± says president Michael Arking. And as for getting the paper stock it needs, ¡°we were told that it might not be available.¡±
What many industry watchers predicted heading into 2008 has come true: Reduced demand and several mill closures, along with rising energy and manufacturing costs, have rendered paper extremely tight.
¡°We are very aware that some catalogers are having problems buying paper,¡± says John Baumann, president of Swiss Colony. The Monroe, WI-based multititle mailer is not, which it credits to regular meetings with its printers and paper suppliers throughout the year, he notes.
¡°We are very specific as to what we believe our production needs will be, and we try hard to consistently meet our estimates,¡± Baumann says. ¡°This helps our printers and paper suppliers plan as well. As long as we can hold true to our production schedules, we should be able to get the paper we need.¡±
But other catalogers, such as gifts and housewares mailer Miles Kimball, have seen a reduction in paper stock options, says marketing manager Ryan Hennig. ¡°The paper stock we used for the majority of our text pages was discontinued in February, forcing us to change stock. We continue to test different paper options as we look to offset the price increases.¡±
Previously, Hennig says, Oshkosh, WI-based Miles Kimball used a 32-lb. high-bulk stock for text pages. ¡°The high-bulk has the feel of a 34-lb. paper with less weight,¡± Henning says.
When that became unavailable, the mailer switched to a 34-lb. stock, which was less expensive, but cost more to mail because of the weight. So Miles Kimball is back to testing a standard 32-lb. stock to help offset the cost increases.
As the paper climate continues to drive up costs for catalogers, many may opt for fewer pages this year. French Toast, for one, may have to place more emphasis on the Web within the catalog by prompting readers to visit its site for more, Arking says. But then the merchant is also more of a Web-based company, ¡°with about 80% of our sales coming in through the Internet,¡± he notes.
Gary Evjen, senior vice president of sales at Deerfield, IL-based Wade Paper Corp., says that some clients have told him they plan to trim paper consumption by 13%-16% during 2008. ¡°Several mill management persons have told me that reduction will still not create a ¡®soft¡¯ market, due to all the production taken out during 2007,¡± he adds.
Indeed, because of the high paper and postage costs, many catalog clients have already made the obvious cuts ¡ª in circulation, page counts, and trim size, says Dave Goldschmidt, vice president of marketing, catalog division for Irvine, CA-based paper brokerage Strategic Paper Group.
¡°The continued paper price increases and now another postage increase have clients looking at all cost-savings paper options as well, such as lower basis weights or grades,¡± he says.
---from MULTICHANNEL MERCHANT Magazine