Co-Mailing: The Biggest Controllable Variable in Your Catalog’s Printing and Postage Costs, Part 2 of 2
Do printers offer different levels of service or all printers’ co-mail capabilities essentially the same? Actually, there’s a wide variety of capabilities and potential cost savings. The big three printers — RR Donnelley, Quebecor World and Quad/Graphics — have big, established co-mail programs that work with catalogs with circulations of all sizes. The second-tier printers, like Arandell, Catalogs America, Brown Printing and The Dingley Press, are getting into co-mail in a big way. They’re using in-house co-mail pools or consolidators, or a combination of the two. The smaller third-tier printers are the ones really suffering, because if they don’t have mail pools they tend to lose out based on price.
What are the deal points when negotiating a contract with your printer? Make sure to ask the following:
* Do they offer a guaranteed savings? Some printers offer guaranteed postage savings.
* Do they guarantee freight prices? Freight guarantees are common and are typically based on a cost per cwt.
* What are the administrative costs for each mail drop? Is there a fixed cost for each mail drop?
* How are the savings split between printer and cataloger? Savings split 50/50 is common, but greater savings are possible from some printers.
As catalog costs spiral upward and break-even costs threaten profitability, catalogers must understand the potential savings from co-mail programs. Co-mailing should save between $.02 and $.04 per catalog mailed, which translates into a savings of $200,000 to $400,000 over a circulation base of 10,000,000 catalogs. That savings can represent the difference between a profit and a loss in 2009. So take a deep dive into your co-mail costs and savings to maximize your bottom line.
Jim Coogan is president of Catalog Marketing Economics, a Santa Fe, N.M.-based consulting firm focused on catalog circulation planning. You can reach him at (505) 986-9902 or firstname.lastname@example.org.