Print Positive:
POD, ARP, SRDP, or Offset? Which Print Model to Use, and When

When it comes to printing, book publishers are always looking for the best mix of low cost, good quality, and optimized supply. Once, they had only one printing model to work with: long runs printed on offset presses. Now, they have three more models to help achieve their goals: Print-on-Demand (POD), Automatic Replenishment Programs (ARP), and Short-Run Digital Printing (SRDP). This post discusses all four printing models, their advantages and disadvantages, and when to use which. It is primarily about business practices rather than technology; for more about printing technologies per se see my last post.

Background
Enter the Xerox Docutech
Enter Amazon
The Digital Handwriting on the Wall
Long Run (Offset) Printing
Print-on-Demand (POD)
Short Run Digital Printing (SRDP)
Automatic Replenishment Program (ARP)
One Title, Multiple Print Models
Choosing the Print Model, First Printing
Choosing the Print Model, Reprints
Long Runs and Digital Printing
Printing Model Selection Guide

Background

Twenty years ago, book publishers had only one way to create and manage printed inventory for a new title: guess how many copies might sell based on early orders, add some extra copies in case the book actually sold, and get the lowest printing cost per copy (“unit cost”). Because the early orders used as a gauge to set the run length were just orders from wholesalers and booksellers–not purchases by consumers–and because longer runs drove the print cost down, this was a recipe for overprinting millions of books. And that’s what happened. Booksellers returned hundreds of millions of copies every year—20 to 40 percent of the books shipped, depending on category. Wholesalers often used returns to pay old invoices and simultaneously reordered the same titles. Millions of books never shipped out of the warehouse to begin with. Add it all up, and between unshipped books and returns, something on the order of 40 percent of all books printed were wasted.

Don Leeper

Don Leeper

Publishers knew that the system was wasteful. It tied up cash in unsold inventory and cost them money for shipping and storing unsold books. But they had little choice: the books had to be on bookstore shelves for readers to buy them, and bookstores could little afford the risk that they wouldn’t sell, so returns were a necessity. Also, the printing technology of the time was designed on the Detroit model: presses and binders were expensive to set up, but extremely efficient once they were up and running. Printing companies had no interest in printing fewer books to help publishers manage inventory, that’s for sure. Quebecor, a printer we used in the ’90s on behalf of client publishers, wouldn’t even quote on a run of less than 2,500 copies. Publishers’ production managers were tasked to minimize unit cost, and printers were set up to deliver it–via long runs.

Enter the Xerox Docutech

The introduction of the Xerox Docutech in the early ’90s changed things. The Docutech was the first industrial-strength high-speed digital printer. It could print pages for a book in a couple of minutes, with much quicker setup times than an offset press, and the pages came out more or less ready to bind–no folding required. Aware of this, some publishing people began to ask the question: What if you could print exactly as many books as you needed, when you needed them? But Docutech quality was very low, and the operating cost was high: Xerox would charge as much just for printer maintenance and toner for a run of 1,000 as a publisher might pay for paper, printing, binding and freight on a run of 3,000 to an offset printer. Secondly, being able to print a few copies at a time didn’t help if you still had to put thousands of copies on bookstore shelves in order to sell books. The only information a publisher had about true demand for a title was the books they’d already printed: the books shipped, those returning unsold from bookstores, and those sitting in the warehouse unshipped. Aiming for the lowest unit cost was still the only rational strategy.

Enter Amazon

In 1996, Amazon moved the bookstore to consumers’ internet-connected computer screens. The physical location of the books being sold was now irrelevant; there was no need to over-order books just to display them. Amazon could order from publishers based on actual demand and developed sophisticated algorithms to do so. Consequently, Amazon’s returns were much lower than those of physical bookstores. Publishers now had a major sales channel where returns were minimal, which meant that they had much better information about actual demand, which meant that ultimately they would be able to match print quantities to demand much more closely.

Also, Amazon could efficiently stock and sell millions of titles, while the largest physical bookstores carried only around 100,000 titles. This meant that Amazon had created a market for books that consumers otherwise wouldn’t even know existed. Wired magazine editor Chris Anderson dubbed this The Long Tail. Many of these Long Tail titles sold only dozens or hundreds of copies a year: too few to justify long offset print runs, but a great match for digitally printed short runs.

The Digital Handwriting On The Wall

Individuals who were both aware of new technologies and knew the book industry could see the handwriting on the wall: technology was going to make it possible to match supply and demand in book printing in a way that had never been possible before. Further, those who had witnessed the tidal wave of digital technologies move through the printing industry from desktop publishing, to imposition, to platemaking–replacing analog technologies at every step–knew that it would not stop until pages were read on a screen instead of on paper: eBooks were inevitable. Whatever the ultimate equilibrium was between books sold in print and those sold as eBooks, managing print inventory was going to be a different game, and digital printing technology was going to be key. We started Bookmobile in December 1996; working with IBM, Ingram started Lightning Print in 1997. Other pioneers entered the picture as well: the offset printer Edwards Brothers worked with Xerox to set up a digital print line. All were betting to some degree that 1) the book industry would evolve to a regime with much better information available to set run quantities, and 2) higher quality, lower cost digital printing devices were coming down the road. Driven by the internet and the advance of digital printing technologies, all of this has happened.

Now, rather than having only one option for creating and managing printed inventory, publishers have four. In addition to long run printing on offset printing equipment, there are three print models that utilize digital printing equipment: Print-on-Demand (POD), Short-Run Digital Print (SRDP), and Automatic Replenishment Programs (ARP). Each model offers unique advantages for publishers, depending on the publisher’s sales channel profile, title list, and production requirements. Each also has disadvantages. First, some definitions.

Long-Run (Offset) Printing

Long-run printing that utilizes offset presses is the traditional model of book printing. For a new book, the publisher estimates the number of copies they expect to sell in the first year, based on advanced orders from booksellers and other accounts. This sales estimate is usually little better than a guess. The publisher then sets the first print run quantity according to the guesstimate, all too often increasing it to get a more attractive unit cost regardless of whether or not the extra copies are likely to sell. The books are shipped direct from the printer to the distribution warehouse. If all copies from the first printing ship out of the warehouse, a reprint is ordered, without, of course, knowing whether the books already shipped will ultimately be returned for credit. For offset reprints, setups on presses and binders have to be done all over again, so the print run is once again set high (1,000 copies or more), regardless of any estimate as to how many books are actually required. Often enough, no reprints are required anyway: the first print run never sells out, leaving unsold books gathering dust in the warehouse.

Use Cases: For all of the deficiencies of this print model, if there is real demand for 2,000 copies or more, long-run printing using offset presses is hands-down the most economical way to print and is very high quality when produced by a good printing company.

Print-on-Demand (POD)

In the POD model, a book is not printed until it is sold. No unsold copies are wasted because none are created. POD facilities universally use digital printing equipment because of minimal machine setup times. The window of time from when an order is received to when order ships can be as small as 24 to 48 hours. POD installations use specialized binding and trimming equipment for finishing the books. To be economically viable, they must have a large volume of work so books with like dimensions can be funneled to printers and binders already set up to the correct page size. Because of this requirement, POD services do not allow infinitely variable page sizes in the same way that an SRDP or offset printer can. POD also does not allow for customizations such as color inserts, french flaps, printed endsheets in hardcovers, etc., because setup times must be as close to zero as is possible. POD is always married to a sales outlet: Lightning Source supplies Ingram’s wholesaling operations, Createspace supplies Amazon. This means that all the publisher has to do is supply print files and the POD outfit pays them when a sale is made. No muss, no fuss.

Use Cases: POD is a compelling choice for Long Tail titles selling a few copies a year when there are no special printing requirements and print quality is not top priority.

Short Run Digital Printing (SRDP)

The SRDP model uses digital printing equipment to print short runs of books for stocking in a warehouse. Where POD enables run quantities as low as one copy, SRDP runs typically range between 25 and 1,000 copies. Because SRDP turnaround is faster than offset, it is sometimes used for runs up to 6,000 where copies of a book are needed in a few days, such as when an author wins a Nobel or Pulitzer. With the right printer, SRDP can allow for the same customizations possible with offset printing (color inserts on different stock, custom trim sizes, printed endsheets, special stamping, etc.).

Use Cases: SRDP should replace offset when the quantity required is within the SRDP sweet spot or fast turn around is a must, and the publisher doesn’t have enough qualifying titles to justify setting up an ARP.

Automatic Replenishment Programs (ARP)

Automatic Replenishment Programs (ARPs) are hybrids of POD and SRDP. Like POD, the goal is to always have inventory to fill orders but never have too much inventory. However, instead of printing books in response to individual orders as with POD, small quantities of each title are stored in a warehouse. Based on order flows and remaining stock, reprints are performed automatically to replenish stock as needed. ARP can offer the benefits of POD–no inventory risk, no time-consuming reprint paperwork, printing not billed until actual orders ship, no storage costs–while providing SRDP benefits that POD can’t: a higher level of quality control, lower unit costs, and all the customizations possible with offset or SRDP. However, these benefits derive from having many titles in the system—ARP is definitely not a good fit for publishing an occasional title or occasional reprint; a better option in that case is offset or SRDP, depending on the quantity required. ARP is often used to maintain inventory in a traditional distribution warehouse, but is also the perfect match for a dedicated Direct-to-Consumer (D2C) publishing program. Web orders can be automatically directed into the fulfillment system, resulting in a completely hands-off operation for the publisher.

Use Cases: ARP should be considered when the quantities required do not justify printing offset, the publisher has enough titles to justify setting up an ARP (roughly a minimum of five new titles per year, plus backlist), and the publisher wants to reduce staff time managing reprints and obtain volume print discounts.

One Title, Multiple Print Models

Because the rate at which a book sells varies over its life in print, different print models can sometimes be used profitably for a single title, assuming its production specifications fit. In its first year, a book may sell 5,000 copies, making it clearly a case for offset printing. In its second year, the rate of sale could decline to 40 a month, meaning that an offset reprint would produce years worth of unneeded inventory–without even factoring in the likely continued decline in the rate of sale and the cost of storage. In this situation, it makes sense to use SRDP or ARP to keep quality up and unit costs as low as possible without tying up dollars in inventory that may never sell. And finally, when sales trickle to 40 a year, a title might still profitably be set up with Lightning Source for true POD, generating incremental sales with minimal effort and without sinking scarce capital into inventory.

Choosing the Print Model, First Printing

For the first printing of any book, the choice of print model should be based on a realistic estimate of the number of copies likely to be sold in the first year. If the first year sales estimate is realistically 2,000 copies or more, the book should be printed at an offset printer to minimize unit cost, unless an SRDP printer can match the price, in which case going with the SRDP printer will allow much more flexibility for setting reprint quantities and getting fast reprints. In the range of 1,000 to 2,000 copies, it is a much closer call, with offset printing allowing lower unit costs at the high end of the range, but SRDP offering faster turnaround and much more reprint flexibility.

At 1,000 copies or fewer, it makes sense to use either SRDP or ARP. For publishers whose sales model involves stocking a traditional distribution warehouse, SRDP offers good unit costs at these lower quantities, lots of print options, and reprint flexibility. For publishers whose sales model prioritizes D2C or whose business relationships enable them to use ARP for restocking a traditional warehouse, ARP can offer the simplest, least risky, and potentially most economical approach if they have enough titles to justify setting one up.

Unless you actually only expect to need 50 books or fewer and have no sales channels other than Ingram or Amazon, it is hard to see any reason to use POD for a first printing.

Choosing the Print Model, Reprints

For reprints, as with first printings, quantity is the determining factor. If the real rate of sale continues to be high—thousands of copies per year—offset printing will offer the lowest unit cost. If sales are in the hundreds or fewer, SRDP or ARP will offer the best use of capital and lowest risk. If sales tail off to dozens a year, an arrangement with Lightning Source or Createspace is the way to go, unless the title is already in an ARP.

Long Runs and Digital Printing

While I have identified long-run printing with offset printing, new high speed digital printing presses based on inkjet technologies are gathering momentum to replace offset presses for all but the very longest runs. It is early yet: inkjet has pretty severe limitations in terms of the paper on which it can print, and quality does not yet match either offset printing or the toner-based digital printing technology. But companies like Kodak, HP, Xerox, and Canon are all investing heavily in solving these issues in attempt to own the market formerly dominated by the offset press manufacturers Heidelberg, Komori, Timsons, and others. When the technical problems are solved, inkjet promises to offer the benefits of offset (speed and low running cost) along with the benefits of digital (fast setup and binding-ready books coming off the end of the press).

Printing Model Selection Guidelines for Publishers

Projected sales, 1 year: 1-50
copies
51-1,000
copies
1,001-2,000
copies
2,001-100,000
copies
Standard page size,
moderate quality requirements,
no print options
POD ARP or SRDP Offset,
SRDP, or
ARP
Offset
Custom page size,
high quality requirements,
any print options
ARP or SRDP ARP or SRDP Offset,
SRDP, or
ARP
Offset

Important Notes
1. Use conservative sales estimates: most titles do not reward overoptimism!
2. These are guidelines only: selection for any actual run should be based on actual quotes from printers. Page count and other factors may skew the advantage either to SRDP/ARP or to offset.
3. In general, SRDP/ARP will have much faster turnaround than offset, which can be a factor for titles with sudden high demand.
4. These guidelines apply both to first print runs and reprints.

Need a quote or more information?

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