Co-Mailing Strategy... Is it Right for You?

by Stephen Lett

There is a great deal of talk these days about co-mingling (also referred to as co-mailing) catalogs together with other catalog titles in order to create a greater postal discount for the participating catalog companies. On the surface, co-mailing sounds like a great idea! Why would any catalog company be opposed to co-mailing if it resulted in a greater postage discount? Sounds like a no-brainer. But wait a minute. Co-mailing is not without some challenges and possible disadvantages. And, it may not be right for you.

WHAT IS CO-MAILING?

 

Co-mingling or mailing is the process of combining
different catalog titles into one mail stream in order
to generate more carrier route discount mail.

 

WHAT ARE THE REQUIRMENTS TO CO-MAIL?

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 can not be done by your service bureau.

HOW DOES THE PROCESS WORK?

The process occurs during the binding/ink-jetting phase of catalog production. During the binding/ink-jetting stage the process is essentially the same as selective binding but instead of combining multiple mailing versions of the same catalog, the printer combines multiple catalog titles into one mail stream. This causes more of the mail to qualify for the carrier route rate. For example, the piece rate for 3/5 digit mail is $261 per M and the carrier route is $194 per M. Catalogs that fall into the carrier route rate structure save $67 per M (the difference between $261 and $194).

AN EXAMPLE OF THE POTENTIAL SAVINGS

The following chart provides an example of a typical co-mailing cost analysis. 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 “B” 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 $4,200 and Mailer “B” will save $2,800 after paying the printer to provide this service. The printer’s charges will vary. The allocation between the larger and smaller mailers is somewhat arbitrary.  Most printers do try to pass the savings onto the large mailer on a proportional basis. That’s why Mailer “A” was charged $5 per M while Mailer “B” the smaller mailer was charged $16 per M.

CO-MAIL.xls
LETT Direct, Inc.
Date: 10-11-05
CO-MAIL ANALYSIS
  WITHOUT
CO-MAIL
WITH
CO-MAIL
Mailer "A"    
Quantity Mailed 600,000 600,000
Postage Cost per M $250 $238
Printer Charges per M $0 $5
Total Cost Per M $250 $243
     
Mailer "B"    
Quantity Mailed 400,000 400,000
Postage Cost per M $261 $238
Printer Charges per M $0 $16
Total Cost Per M $261 $254
     
Mailer "A" saves $7 per M X 600M = $4,200
Mailer "B" saves $7 per M X 400M = $2,800

 

 

 

 

 

 

 

 

 

 

ADVANTAGES AND DISADVANTAGES OF CO-MAILING

There are issues you will face if you co-mail. It is not without risk. Mailing schedule changes, a co-mailing partner could drop out, etc., are all factors to consider. Here are some of more obvious advantages and disadvantage of co-mailing:

ADVANTAGES

  • Postal Savings – This is due to better presort levels and possibly better drop-ship discounts. More mail will qualify at the carrier route level.
  • Better Deliverability – More carrier route or 5 digit pallets will result enabling the catalogs to penetrate the postal system deeper (which could generate additional savings by going to more SCF’s). This will increase production flow through the postal system.

DISADVANTAGES

  • One of your competitors could be a co-mailing partner arriving in-home on the same day (this could occur without co-mailing, however).
  • 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.
  • 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.
  • 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.
  • Increased manufacturing cost to co-mail which could eliminate most of the resulting postal savings.
  • Catalogers with large mail streams might not allow a smaller mailing to co-mail with them. The advantage is clearly with the smaller mailer.
  • The printer (not the service bureau) must do the pre-sort which requires additional coordination on your part.
  • You may have to re-design your back cover and order form to accommodate your co-mail partner.

OUR CO-MAILING CHECKLIST

We have developed a co-mailing checklist. Before you decide to co-mail, be sure to ask your printer the following questions:

  1. Do we keep our same original mail date?
  2. Who is our co-mailing partner(s)?
  3. What guarantee do we have that the production of their catalog will be on time?
  4. What guarantee do we have that they will be able to advance their postage check on time?
  5. What guarantee do we have that they will not drop out at the last minute?
  6. What does the printer charge for this service and can the potential postage savings be cost justified for me?
  7. What is the size of the mailing and benefit to each partner?

Ask your printer if they can identify any co-mailing opportunities for you. And, when approached by your printer to co-mail with another company, be sure to ask the right questions (use our checklist). Don’t just look at the potential savings. Co-mailing with another reputable cataloger is a good thing to do. Just be certain you evaluate the true potential savings. Be sure to consider the potential risk too. If you can find the right partner, this can make a great deal of sense. And, as long as your printer can provide satisfactory answers to your questions, go for it. The savings from co-mailing can add up!