Soften the Impact of Paper Cost Increases

Ed Warren, Mattern Consultant

While the need for copy paper has drastically dropped at most firms during the last 24 months, the cost of copy paper is about to go up.

Paper mills are alerting their wholesale customers (office supplies companies) of price increases beginning as early as mid-February 2022, and will be raising their prices as much as 9 to 11% for private label and branded office papers. Your supplier will be passing the cost increases onto you.

A favorable office supply purchasing agreement will have a cap on price increases; however suppliers are stating there are extraordinary market factors affecting business with product shortages and higher operating costs.

Key drivers of price increases include:

  • Pulp prices are 25-42% higher 2021 vs. 2020
  • Fuel cost – rapid and significant increases in inbound/outbound freight
  • Demand as many offices return to work
  • 7% CPI increase in 2021

Here are a few suggestions on how to “soften the blow” on paper price increases, at least in the short term, that may work for your firm:

  • Inventory all paper currently onsite.  Many times, paper is stored away and forgotten.  Deplete your current inventory before purchasing more.
  • Most agreements require a 30-day written notice before any price increases are applied.  Order and stockpile paper before increases are implemented.
  • Request your supplier provide a lower cost option to the current paper you purchase (non-recycled standard versus recycled copy paper or brand name versus generic brand.)
  • If you have the space to store paper and your facility can accommodate larger deliveries, order by the pallet.  Request a lower cost for purchasing a pallet of paper versus a few cases at a time.  Delivery costs are lower on a pallet (40 cases) than smaller quantities.

While the increase in paper prices cannot be avoided, knowing your supply and timing your spend will help alleviate future sticker shock.