In the three years to 2017, the price of managed print services has been rising at an estimated average annual rate of 1.3%. As the economy has grown, the number of businesses has increased and expanded the pool of businesses that use managed print services to limit printing costs and streamline print processes. Gains in government funding for primary and secondary education have also stimulated demand for market services. Elementary schools, high schools and colleges that rely on government funding are large buyers of managed print services due to their high levels of printing activity. Demand growth, however, has been tempered by the rising popularity of digital document services, which have been used as a direct alternative to managing documents in print form. Still, overall growth in demand has allowed suppliers to increase their service prices without risking significant losses in business.
Full-service managed print service suppliers provide buyers with ink and toner refills. The price of ink has been rising in the three years to 2017. Amidst growing demand, suppliers have passed higher ink and toner prices to buyers in the form of higher prices. Fortunately, however, falling wage costs for printer repair employees has exerted downward pressure on price.
In the three years to 2017, price volatility has been low, allowing buyers to better budget for purchases. Buyers are not advised to delay contractual decisions, however, because the price of managed print services is projected to continue rising through 2020. The longer buyers wait, the higher the price will be. However, buyers can seek to reduce costs by leveraging a large value over the contract period or by bundling other services or goods with managed print services.
The price of managed print services is forecast to grow at an average annual rate of 1.9% in the three years to 2020, harming buyer power. ProcurementIQ anticipates demand for managed printing services to continue growing during the period. For instance, the number of businesses is expected to increase. As the number of businesses continues to rise, more businesses will demand managed print services to streamline print processes and handle general printing needs. Gains in government expenditure on education will also propel demand for managed print services upward.
Meanwhile, however, the growing popularity of digital document services is forecast to limit growth in demand, and consequently prices, for managed print services. As some businesses transition to digital management systems, they will print fewer documents, somewhat tempering demand for services. Although this trend will curb price growth for managed print services, demand is still anticipated to rise overall and provide suppliers leeway to continue raising prices without risking significant losses in business. Moreover, continued gains in the price of ink will push prices upward. Suppliers will pass higher printing ink prices to buyers in the form of higher prices.
However, price volatility is anticipated to remain low during the three years to 2020. Low price volatility benefits buyers by allowing them to budget with more certainty for the procurement of services. Given that prices are forecast to rise, though, buyers should strive to enter a contract to lock in prices sooner than later.