The bleed is the margin extending beyond the final format of the print product and will be trimmed by the cutting machine.
If not specified otherwise, add 0.1 inch of circumferential bleed to your print files.
Why is the bleed necessary?
When cutting to final format, there can be deviations by up to 0.04 inch.
The bleed thus serves as tolerance for possible trimming differences.
Safety margin for important design elements
Important graphic and textual information which must not be cut should be located at least 0.2 inch from the final format if not specified otherwise.
If you include the bleed, these elements should hence keep a distance of at least 0.24 inch from the edge of the print file.
Markers & reference lines
Feel free to use appropriate markers and reference lines (e.g. cutting, folding or register marks) to design your product in your layout software. However, these must not be included in the export of the print files.
If this is impossible for program reasons, only include cut marks when creating print files.