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.
Bargaining Power
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 jcoogan@earthlink.net.
