Sorting Out Distribution Costs

There is continued and growing pressure for the publication and catalog markets to reduce print distribution expenses. Competition from electronic delivery methods, along with rising energy, postal and paper prices, has increased the scrutiny of distribution efficiency. For products that mail, the focus is on improving the pre-sort for each piece as well as optimizing drop shipping opportunities to further reduce delivered cost.

There has been a notable shift in the willingness and desire to co-mail. Products can no longer afford not to take advantage of this cost-saving opportunity. Catalogs that previously required inside inkjet are quickly shifting to outside inkjet only. Publications that would not tolerate any time delay are now willing to wait. (In many cases, though, the increased demand has produced more frequent co-mail cycles and, therefore, reduced wait times.) All of this is driving a rapid growth in options for co-mailing for both Periodicals and Standard A mail.

The whole reason to co-mail is to improve the level of postal sortation in the ending mail stream. Lower-circulation titles see the most improvement because they end up in a co-mail pool that is much larger than their base circulation. The goal is to see three- and five-digit bundles move up to carrier-route bundles. The resultant discounts yield net savings to the publisher after paying a fee to co-mail.

Many major printers now have in-house co-mailing. The largest printers created co-mailing centers and ship products to that one central facility for co-mailing. Smaller printers, lacking the necessary volume, can enter a third-party co-mail pool.

Keep in mind that it doesn't make sense to co-mail every printed piece. The following six conditions detract from the viability of co-mailing:

No Inkjet Box.All co-mailed books require inkjet to manage the process. If an inkjet box is not provided, then a blank paper label needs to be applied to the book to receive the inkjet address. This is a more complicated process for which printers can normally charge.

Odd Sizes.Most co-mail pools limit the variation in product size. All of the books are merged into bundles, and bundle integrity must be maintained. For example, oblong or digest-size mail pieces typically will not fit into the pool.

Poly-wrapped Pieces.Not all co-mailer machines allow poly-wrapped pieces because the bag and, potentially the contents of the package, may make it difficult to feed the book. It may also affect the integrity of the bundle.

High Concentration of Carrier Route Mail.There is likely very little benefit to products that already have a high percentage of carrier route bundles, unless they can move up to a firm package. The chances of this are so slim, though, that the double- handling of the pieces at the binder and then again at the co-mailer will outweigh any postal savings.

Titles with “News” Classification.If a title has the news classification, it already gets preferential delivery treatment in the USPS. If the title becomes part of a co-mail pool, it is treated like a Periodical and will achieve those delivery standards, which are typically unacceptable.

Inside Inkjet Requirements.No offline co-mailer has solved this requirement yet. There is no way to open up a selected book to a specific page to address on the inside. Co-binding is the only method of improving sortation on titles that must have inside inkjet.

With today's USPS rate structure and the cost issues facing print buyers, there is no question that the demand for co-mail will increase.

Landwehr is a plant manager at web printer Fry Communications, Mechanicsburg, PA.

Local businesses can save up to 25% on direct-mail postage, according to Melissa Data, a developer of data quality and mailing preparation solutions. The “saturation mailing” strategy works by flooding a direct mail message within a localized area (i.e., a radius from your customer's business, a ZIP Code, city or county) by reaching the majority of households and/or businesses in a postal carrier's route.

Because saturation mailings are easier for the Post Office to process, the savings get passed along to the printer/mailer—20% to 25% off the cost of Standard Mail, or about 5¢ per mail piece delivered.

“An economic downturn like we are experiencing now actually provides an opportunity for businesses to build greater market share by taking advantage of new buying concerns, projecting a stable image and dominating the field when the competition is silent,” notes John Hull, VP of list sales for Melissa Data. “A saturation mailing is the perfect vehicle for local businesses. It's a very cost-effective way to market to your best customers: your neighbors.”

The key requirement to qualify for a saturation mail discount is that the mailing must be sorted in “Walk Sequence” order—the actual sequence the postal carrier will deliver the mail while walking his or her route. Sorting the mailing in walk sequence saves the USPS time and effort spent sorting, coding and processing.

“Many people assume a saturation mailing is complicated because of the Walk Sequence requirement and decide just to mail at the much higher First-Class or Standard rates,” Hull adds. “But it's really very easy to do a saturation mailing. Many list providers offer these mailing lists, called Saturation or Occupant lists, presorted in Walk Sequence order.”

ONLINE: Download a white paper on growing your business via saturation mail at melissadata.com/nosecret.