Setting the Best Postage Rates for Catalogs and Direct Mail
Second, the Post Office needs to examine ways to increase the proportion of carrier route mail because that's the easiest and most profitable mail for it to handle. Offering sortation discounts for carrier route mail has revolutionized the relationship between mailers, printers and the Post Office, and created an entire industry around the use of co-mail — allowing mailers to combine their mail with other mailers to achieve savings from maximizing carrier route and other sortation discounts. The Post Office should look to set rates that continue to push mailers to use co-mail and incentivize carrier route discounts.
Lastly, the Post Office needs to not only push existing mailers to take advantage of co-mail technology and delivery, but also find ways to bring in new mailers, especially web-only retailers. It must find ways to provide affordable postage for merchants who are using the web exclusively to engage customers and prospects.
The best way to build profitable bulk mail volume is to reduce rather than increase the postage for carrier route mail. If the Post Office sets the rates for carrier route mail lower and increases the incentive for mailers to join co-mail pools, the entire industry will push toward co-mail and the portion of the most profitable mail — carrier route, sorted mail — will increase.
How will the co-mail industry evolve? Co-mail really didn’t exist a decade ago. At first, mailers sought to find individual partners who had common sizes and mail schedules. Today, both printers and third-party consolidators offer regular co-mail pools.
The next step for co-mail is a bit of an unknown. Opportunities exist to grow co-mail by combining periodicals and catalogs in common pools, increasing the savings available to larger mailers. But if it makes economic sense to find more ways to bundle mail and achieve carrier-route discounts, printers and mailers will find ways to capture those savings.