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Is Label Printing Profitable? A Deep Dive for Print Shop Owners

Updated: Jan 8, 2024

Professional Labels Printers

As a print shop owner, diversifying your services to include label printing can be a game-

changer for your business. But the big question remains: Is label printing profitable? With over

20 years of experience in label printing equipment, we'll explore the factors that impact the

profitability of label printing, including technology choices, operational efficiency, market

demand, and strategic implementation to help you determine the best label printer for small

businesses.


Are Label Printers Worth it?

In today's market, label printing is not just a service; it's an essential component of product

branding and logistics for countless industries. The demand for custom-printed labels is driven

by the need for companies to differentiate their products, comply with regulations, and

connect with consumers.


Here's how the demand shapes up across various sectors:

Food and Beverage: This industry is a massive consumer of printed labels, with every product

requiring specific information like ingredients, nutritional facts, and expiration dates. Beyond

compliance, labels serve to attract consumers and convey brand identity. As dietary trends and food safety regulations evolve, companies frequently update their labels, creating a steady demand for new, high-quality label printing services.


Cosmetics and Personal Care: In this highly competitive market, custom-printed labels are

crucial for branding, with premium finishes and custom shapes often used to convey luxury or

organic quality. Labels also need to withstand certain conditions like moisture and handling,

demanding high durability and print quality.


Healthcare and Pharmaceuticals: Labels in this sector are critical for safety and compliance,

containing vital information about drug interactions, dosage, and ingredients. The need for

accuracy and legibility in print, often at small sizes, requires precision printing technology.


Chemicals and Industrials: Labels in these sectors often need to adhere to strict regulatory

standards, including durability in harsh conditions and clarity of safety instructions. Specialty

labels, resistant to chemicals, heat, or cold, are often in demand.


Understanding this demand is crucial for print shop owners. Each industry presents unique

needs and opportunities. For instance, offering water resistant labels from the Neuralabel

Callisto could attract businesses in the cosmetics sector, or being able to provide small, detailed prints could appeal to pharmaceutical companies. Staying familiar to the specific demands of these sectors, and how they change over time, can guide print shops in acquiring the best label printer for small business, the best label materials, and expertise to serve these markets effectively and profitably. Yes, label printing is worth it.


Trends and Opportunities

The label printing industry is not static; its shaped by evolving technologies, changing

consumer behaviours, and broader economic trends. For print shop owners, staying ahead of

these trends isn't just about survival—its about seizing opportunities for growth and profit.


Here are some of the key trends and opportunities:

Personalization and Customization:

Short-Run Printing: Theres growing demand for short-run, customized labels, driven by small businesses, boutique products, and special editions. This trend is particularly strong in

industries like craft beverages, artisanal foods, and cosmetics. Print shops that offer flexible,

cost-effective short-run printing can capture this market. Variable Data Printing: Advanced label printers can change elements like text and images from one print to the next without slowing down the printing process, enabling personalized labels for events, personalized marketing, or individualized product information.


Regulatory Compliance:

As regulations change, businesses must update their labels. Print shops that stay informed

about regulatory changes and offer quick turnaround can become indispensable partners to

their clients. This is a major driving factor as to why the cannabis industry needs label printers.

International Markets: Companies selling internationally may need labels in multiple languages and formats to comply with local regulations. Print shops offering translation services and understanding international labeling requirements can capture this broader market.


Digital Printing Advancements:

Quality and Speed: Digital printing technology continues to advance, offering higher quality

prints at faster speeds. Investing in the latest technology can significantly increase a print

shops capacity and profit margin.


Customization and Flexibility:

With Digital Label Finishers, like the Scorpio, print shop owners printers can easily make updates and changes to designs, making them ideal for clients who need frequent label updates or who want to test different designs. Understanding and leveraging these trends can position print shops as forward-thinking, innovative, and essential partners to businesses across a wide range of industries. By offering the latest in label printing technology and services, print shops can not only attract new clients but also build deeper, more profitable relationships with existing ones.


Maximizing Profitability with the Right Technology

Inkjet vs. Toner-Based Printers:

Inkjet Printers (e.g., NeuraLabel Callisto): Ideal for short to medium runs, inkjet printers offer

vibrant colour and high resolution at a lower initial print cost. They're particularly suited for

customized, high-detail labels and can print on a variety of materials. However, material costs

can be higher than toner-based label printers.


Toner-Based Printers (e.g., Konica Minolta AL 230):

These printers are generally faster and more suitable for longer runs. They offer excellent print quality and durability, with lower per-page costs, especially at higher volumes. The Konica Minolta AL230 can handle a wide range of materials and are known for their sharp text and image quality. We do not need ink jet coated materials.


Cost Analysis:

Is label printing profitable? Well, lets break down the two most common scenarios when

customers are considering purchasing a professional label printer:


Scenario 1. Konica Minolta (13" wide) - Single Job of 20,000 Labels

Label Size: 4x6 inches

Total Labels: 20,000

Fixed Cost: $0.26 per meter

Cost Calculation: approximately $264 or $0.013/label

Selling Price: $0.17/ Label

Total Profit: $3136


Scenario 2. Callisto (8.5" wide) - Four Orders of 5,000 Labels Each

Label Size: 4x6 inches

Total Labels per Order: 5,000

Number of Orders: 4

Print Cost: $1400 or $0.07 per label

Print Cost per 5000: $350

Selling Price: $0.23/ Label

Total Profit:$3200


Cost-Efficiency:

The Konica Minolta is more cost-effective in terms of fixed costs due to fitting

more labels across the material width, reducing the cost per label significantly.

Profitability: While the Konica Minolta has a lower selling price per label, its much lower cost

results in a high profit. The Callisto, despite a higher selling price and profit per label, has a

higher cost, reducing its overall profit margin compared to the Konica Minolta.

Flexibility and Market Positioning: The Callisto printer seems to be positioned for smaller,

more frequent orders, allowing for a higher selling price per label. In contrast, the Konica

Minolta is more suited for larger, single-run jobs due to its efficiency.

Total Revenue vs. Total Profit: The Callisto generates more revenue due to the higher selling

price per label but doesn't necessarily translate to higher profit due to its higher costs. The

Konica Minolta, with its efficiency and lower cost, ends up with a higher profit despite lower

total revenue.


In conclusion, the Konica Minolta printer is more cost-effective and profitable for a single large

run of 20,000 labels due to its ability to maximize material use and lower cost per label. The

Callisto, while it can charge more per label for smaller orders, has a higher cost which reduces

its profit margin, making it potentially more suitable for businesses focusing on smaller,

premium-priced orders.


For more information, please contact seb@admaco.com

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