All About Co-Mailing V4
by Stephen Lett
Co-mingling (referred to as co-mailing) has become extremely important to catalogers as a way to reduce postage costs. This is the process of “co-mingling” catalogs together with other catalogs in order to create more discounts for the catalog companies who participate. It is a complicated topic to comprehend. This month, I want to discuss what co-mingling is, the advantages as well as the disadvantages and what you can expect in terms of net savings.
Ways To Co-Mingle
There are two ways to co-mingle. In-line is one method which occurs during the stitching and ink-jetting stage on the bindery line. This is where multiple catalog titles are combined into one mail stream. The other way to co-mingle is off-line after the catalogs have been bound. This involves combining bundles from different catalog titles and creating more SCF, carrier route pallets that have a better discount. The number of catalogs you mail at one time will determine which method is right for you.
Advantages and Disavantages
I want to review both the positive and negative points with regard to co-mingling your catalog with other catalogs. The chart below provides a comparison of in-line vs. off-line co-mingling. In most cases, the postal savings from co-mingling will more than off-set the disadvantages.
|1. Quantity Mailed – 300M and up.||1. Quantity Mailed – Starting as low as 50M.|
|2. Postal Savings – This is due to better presort levels and possibly better drop-ship discounts. More mail will qualify at the carrier route level.||2. Postal Savings – Larger gross postal savings because catalogs participating are generally shorter runs which start with higher postage rates.|
|3. Better Deliverability – More carrier route or 5-digit pallets will result enabling the catalogs to penetrate the postal system deeper. This will increase the production flow through the postal system.||3. Better Deliverability – More catalogs will be delivered to SCF’s (Sectional Center Facilities) rather than to BMC’s (Bulk Mail Centers) thus penetrating the USPS deeper. There is a larger discount to deliver to a SCF.|
|4. Ink-Jetting – Can ink-jet the order form at centerfold and the back cover.||4. Ink-Jetting – Only the back cover can be ink-jet imaged.|
|1. One of your competitors could be a co-mailing partner arriving in-home on the same day (this could occur without co-mailing, however).||1. Same as in-line.|
|2. A co-mailing partner might decide to drop out at the last minute and if so, you are stuck without a partner which would eliminate the savings you might have counted on.||2. Same as in-line.|
|3. Your mail date might have to be adjusted a day or two either way in order to participate. In-home dates can be longer as a result.||3. Same as in-line.|
|4. If the company you are co-mailing with is late on their creative files and misses their press date, they could be forced out of the co-mailing program which is worse for the remaining participants.||4. Same as in-line.|
|5. Increased manufacturing cost to co-mail which could eliminate some of the resulting postal savings.||5. Same as in-line. Off-line co-mingling is more equipment and labor intense.|
|6. Catalogers with large mail streams might not allow a smaller mailing to co-mail with them. The advantage is clearly with the smaller mailer. However, this varies printer-to-printer. At one printer I know, the in-line tends to favor the larger mailer because if they are 70%, for example, of the total quantity, they received 70% of the savings.||6. Not a factor with off-line. However, this does depend on the individual printer’s pricing structure.|
|7. The printer (not the service bureau) must do the pre-sort which requires additional
coordination on your part.
|7. Same as in-line.|
|8. You may have to re-design your back cover and order form to accommodate your co-
|8. Same as in-line.|
Requirements for In-Line Co-Mingling
Not every cataloger is in a position to co-mail their catalog with another company. There are certain requirements for the mailer which are as follows:
- The catalogs must all be the exact same trim size.
- The ink-jet areas also must be the same on both the order form or order form page and on the back cover.
- Generally need to be within 32 pages of each other in total.
- Both must have the same distribution pattern, i.e., the same in-home dates or mail dates (which some catalogers want for fulfillment purposes since this method tends to level out the order flow).
- Printer must do the ink jet formatting and list sortation since their machinery will do the coding etc. This work cannot be done by your service bureau.
Net Savings You Can Expect
How printers charge for the co-mingling service varies. And, there is a price differential for in-line vs. off-line co-mingling (off –line is more expensive) however, the initial savings are generally greater. The amount you pay your printer to perform this service must be subtracted from the postal savings in order to get a true “net” savings. The chart below provides an example of a typical co-mailing cost analysis. Most printers charge by splitting the postage savings equally with the mailer on a proportional basis. For example, the savings is generally proportional to the number of names you contribute, i.e., if you supply 75% of the names, you’ll get 75% of the total savings. The Dingley Press is the only printer we know who charges their customer on a per M basis for the actual service they perform for in-line co-mingling. The cataloger receives 100% of the postal savings due them and they pay Dingley a set fee per thousand catalogs.
While printers may approach their charges differently, the end result in terms of the potential savings will be similar. The company with the lower quantity, i.e., Mailer “C” is charged more since the larger mailing Mailer “A” is having a greater direct impact with regard to the savings. In our example, Mailer “A” will save $22,500 while Mailer “B” will save $15,000 and Mailer “C” will save $9,000 before paying the printer.
In-line co-mail partners generally number two to four. The number of off-line participates is almost unlimited; 12 partners is not uncommon. Off-line co-mingling are mostly smaller mailers. Printers split the savings. The typical result is a higher gross savings but the fee is also higher because the off-line process is a totally separate manufacturing process from the binding. The "drivers" of the higher charges for off-line co-mailing are the capital investment for the machinery and the labor cost to run it.
|LETT Direct, Inc.
|CO-MAIL ANALYSIS EXAMPLE
(Size of Pool 1,550,000)
|Less Printer Charge||-$11,250|
|Less Printer Charge||-$7,500|
|Less Printer Charge||-$4,500|
|Less Printer Charge||-$23,250|
|Net Postage Savings||$23,250|
We have developed a co-mailing checklist. Before you decide to co-mail, be sure to ask your printer the following questions:
- Do we keep our same original mail date?
- Who is our co-mailing partner(s)?
- What guarantee do we have that the production of their catalog will be on time?
- What guarantee do we have that they will be able to advance their postage check on time?
- What guarantee do we have that they will not drop out at the last minute?
- What does the printer charge for this service and can the potential postage savings be cost justified for me?
- What is the size of the mailing and benefit to each partner?
If you currently don’t co-mingle your catalog with other catalogs, you should. The savings can be significant and the advantages far off-set the disadvantages. Hats-off to the catalog printers who have made this technically possible and affordable for catalog companies. Co-mingling is not just for the larger mailers anymore. Now, with off-line technology, you can participate and take advantage of any postal savings if you mail at least 50,000 catalogs at a time. To co-mail, you must print with a known catalog printer, something we always recommend. Challenge your printer to find suitable co-mail partners for you.