One interesting task that I recently undertook was preparing a comprehensive MS Excel sheet which would allow our clients to calculate the expected ROI time and Profit & Loss for their investment in a large format ChromaLuxe system. You start with the basics like hardware investment cost and compare it with material costs and selling prices. But that is just the start, there are many other factors to take into account.
The good news is that, in the end, you can only come to the conclusion that even a modest volume of work can generate some interesting profits.
Hardware and Software Investment
First you have to look at the hardware investment cost of a printer and heat press. The heat press is the largest cost element and will control the maximum size that you can print. It also needs to be top quality with very even heating and pressure. Some of the presses designed for textile simply do not meet this standard. Prices for a good larger format press vary from €6.000 to €45.000 depending on the size. €30.000 will provide a good press, delivered and installed, for printing 1.1m x 1.75m plates.
A 44inch (112cm) printer from Epson will cost around €5.000 including a RIP software, depending on local offers. The only other hardware cost may be some colour management hardware and software, if you don’t already have it, at about €2.000. A percentage should also be included for maintenance costs.
When we look at the investment costs, whilst they may seem quite high at first, they are much lower than costs associated with purchase of UV printers, CNC routers and wet chemical silver halide print processes. Given the high gross profit margins available, this is an excellent investment.
The next stage involves looking at the cost of the ChromaLuxe plates – easily calculated from our price list, less any applicable discount. In a ROI, I look for the total square metres per week and I have created a mix of standard product sizes in order to calculate this.
Paper and Ink – for printing hard metal substrates, this is a cost but not a high percentage of the total cost. We are looking at between €3.00 and €5.00 per square metre depending on the printer, ink used and most importantly the image. As with all inkjet printing, an image with a lot of white background will use much less ink than a full colour image. We use a medium-high level image for our estimates.
Next is your sales price. This has to reflect market prices, best assessed by checking competitors’ web sites! But also take into account your service level – do you offer a high end professional service with test prints, colour management, proofing etc? The prices that should be used here are without VAT tax.
Other factors to consider
Substrate, paper and ink wastage. If you print on a 112cm wide roll but the image is only 30x40cm, there is obviously a lot of waste. Print head cleaning cycles also use ink.
Then there is the electricity cost for the heat press which can be substantial if it is on all day but only limited production is done. Set this up efficiently.
Labour costs are another aspect. One of the great advantages of sublimating prints is the production process which, once a good workflow is set up, is very easy, very fast and very reliable. Calculating labour costs means making some accurate assumptions on print estimates.
But when you look at the ROI, all these extra items have less effect on the total costs than the investment cost and main consumable costs.
We offer our clients the opportunity to use our Excel ROI sheet that comes with full instructions. However, we recommend to complete it together so that each item can be confirmed and discussed if necessary. This is a major investment and it is important to be accurate.
One of the great things about owning a sublimation system and heat press, is the opportunities it opens up to create other products – we often say that your imagination is your limit! Gift items, kitchen interiors, tables, whiteboard products, textiles are all items that can be produced with the same equipment.
The Final Result
Our Excel sheet allows you to look at the expected ROI time. You can also choose the write down period.
A second step allows you to enter your own estimated weekly print run with a combination of sizes and to look at the full P&L calculations. Contribution to building and other overheads can be added.
Sublimation carries a healthy gross profit which at the end of the day can give a fast ROI from just a few prints per week.
Contact us to find out more!
Charles Henniker-Heaton has over 30 years experience in the imaging industry, first at Durst and then at Fujifilm as a senior manager involved in retail photo, chemicals and since 2006 as European Marketing Manager for large format printing. He joined ChromaLuxe EMEA in 2014 in charge of European Business Development for large format.