How to Calculate Thermal Paper Roll Price?

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How to Calculate Thermal Paper Roll Price?

Whether you are preparing to enter into the thermal paper business or you have a few years’ experience in importing thermal rolls from China, do you know how the thermal paper roll price is calculated? In this article, we will explain how to calculate the cost for each roll. First, though, you need to have a full understanding of the basic knowledge below:

Understand these basics? Great! Here we go.

From the above pictures, we can easily conclude that thermal paper roll price consists of 5 components:

Let’s look closer at these components that make up a thermal paper roll price.

1. Paper Cost.

thermal paper cost

Paper cost is the major component of thermal roll price. From this article, we know thermal roll is produced from the jumbo paper roll, so the jumbo roll price directly affects the thermal roll price. The supply chain for thermal jumbo rolls is very long, and it changes nearly every month. It is affected by many factors such as paper pulp supply, governmental or environmental policy, supply of coating chemicals, etc. For example, since January of 2017, the jumbo roll price has increased over 20% because of a short supply of paper pulp. Be careful not to offer a fixed price to your customer; instead, quote them an updated price every month. Currently, the jumbo roll price ranges from $1500/ton to $1800/ton.

For 80mm x 80mm 60gsm thermal roll, its length is around 60meters, so we can easily get the paper cost:

Paper cost = 0.080m x 60mts x 0.060kg/m2 x $1500/ton x 1/1000 = $0.430 per roll 

2. Core Cost.

Cores for thermal paper roll

 

As you can see in the above picture, there are many different core types & sizes (length, color, smooth or honeycomb). Be sure you have a dependable core supplier so you can buy whatever type of core meets your customer’s needs. (If you also want to enter into the core manufacturing industry, that is not advisable in my opinion, because it is a totally different industry and requires more energy and cash flow.)

Different core types and sizes have different prices, but most are around $0.018 per piece of core.

3. Packing cost.

paper roll packing

To protect the thermal paper from being damaged by sunlight, heat, humidity and long distance transport, good packing is crucial for thermal paper rolls. The materials we usually use are: wrapping film, plastic bags, labels, cartons and pallets. From above pictures, we can see that there are many different packing types. Actually, in most cases customers would bring up their unique packing requirements, for example, some customizing on the cartons (print their Logo and other brand awareness items), so it’s extremely important to work with a dependable, long term packing material supplier.

For a carton of 50rolls 80mm x 80mm thermal paper, the carton size is 41cm x 41cm x 17cm. The carton cost is around $1.0/PCs plus the wrapping film, giving a total cost of around $1.10 per carton. So that would be a $0.022 cost for each individual 80mm x 80mm thermal roll.

4. Labor Cost.

Labor Cost

Labor cost is another major component of thermal roll price. A thermal paper manufacturing company requires a large variety of employees, including sales personnel, accountants, slitting machine operating workers, printing machine workers, warehouse management staff, and many others. Additionally, different countries and regions have different salary standards. One one hand, you must obey the laws setting minimum wages for your employees, but on the other hand, you need to think out ways to motivate them to work more for you to earn a higher salary (yes, this is called “capitalism”). Actually, there are many other hidden costs in a company, such as costs for electricity, maintaining machinery and equipment, gasoline, office supplies, marketing and advertising, etc. One thing that’s trending these days: more and more industries are reducing costs by using robots to replace humans. I think that will be a trend in paper roll manufacturing.

In China, the labor cost for each 80mm x 80mm thermal paper roll is around $0.02 per roll.

5. Profit.

Profit

After those costs, it is time to calculate the profit. The profit margin is determined by many factors, such as competitors’ quantity, market volume, customers’ quality requirements, order quantity, etc. If you are located in a country with very few thermal paper manufacturing factories but with big market volume, then you can set the profit margin at a high rate, such as 25%. However, if you are located in a country (like China) with many thermal paper manufacturing factories, it is not possible to set a high profit margin, since customers would simply buy from your competitors rather than you, if you are quoting them a higher price.

The proper profit margin for 80mm x 80mm thermal roll is around 10% ~ 20%.

Conclusion:

From all above costs, we can easily get the 80mm x 80mm thermal paper price:

The thermal paper manufacturing business is small, but it is not easy, and you should not try to enter into the thermal paper manufacturing business by yourself. Instead, import the products from a dependable supplier (like our company, Panda Paper Roll). It will save you much cost and time and will help you avoid more obstacles than you can possibly imagine. If you want to know more about thermal paper roll prices or have any other questions, freely email us: support@pandapaperroll.com. We look forward to sharing more information with you.

2017-11-01T16:07:15+00:00 By |Marketing Strategy|

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