Co-Mailing: The Biggest Controllable Variable in Your Catalog’s Printing and Postage Costs, Part 1 of 2
Catalog printers are running full-page ads touting their co-mail capabilities. Why has co-mailing become such a hot topic in the dialog between catalogers and their printers? Simply put, co-mailing represents the potential for very significant savings in postage costs. The variation in savings between printers, based on the size of co-mail pools, in-line co-mail and off-line co-mail, means choosing the right co-mail partner can be the most significant factor in selecting your printer!
The majority of a catalog’s publishing costs are contained in the three P’s: printing, paper and postage. The cost of creative, list rentals and merge/purge is small compared to these three cost categories. And catalogers have little control over these costs. Postage isn’t negotiable, paper costs are increasingly mandated by the paper companies and printing margins are razor thin. This means printers can’t cut their manufacturing costs, leading to very similar prices because competition between printers dictates virtual price parity.
But, printers can offer significant cost savings to catalogers via co-mailing. Co-mailing involves binding your catalog along with a pool of other catalogs so your carrier route or tier qualification discounts are combined. The post office offers significant discounts for breaking the mail into tiers, rewarding mailers who prepare their mail so it’s efficient for the post office to handle.
The most efficient mail gets discounted at the highest tier, and the less efficient mail is classified in lower tiers with higher postage. The postal tiers range from carrier route (with a postage rate of $.249) down to Mixed ADC PRST (with a postage rate of $.515). The May 2007 postal increase not only sharply increased catalog postage, but also the spread in postage costs between efficient mail, like carrier route bundles, and the least efficient mail, such as the residual bundles. With a 25 cent difference in postage for mailing the same catalog based on whether it qualifies for carrier route or the least efficient tier, printers have developed programs to combine mail and capture enough savings to make it profitable for printers to co-mail catalogs.