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04.01.14

How Much Are You Really Saving With Co-mailing?

 

How Much Are You Really Saving With Co-mailing?Let’s start at the beginning: Exactly what is co-mailing and how is it beneficial to you? It’s a process of combining and sorting multiple titles into a single mail-stream that’s done in advance of joining the USPS mail-stream. This benefits the post office and in turn, they provide you with postage savings. As a byproduct of co-mailing, your publication arrives in better condition because it bypasses several USPS distribution centers. The mail will go directly from the co-mail facility to the last USPS Distribution Center that delivers the publications to all the local post offices. Plus, you also achieve in-home dates in about the same time frame.

There are basically two types of co-mail categories you may fit into:

  • Off-line co-mailing: Combining of multiple mail lists from multiple publishers into a single pool after the publications have been printed and labeled. Up to 34 different titles can be co-mailed together from a central facility.
  • Inline co-mailing: This is done right on the binding equipment at the printer and is normally limited to the number of equipment pockets available.

All of this sounds great, of course, but there’s one problem: Determining how much you’re really saving with co-mailing can be challenging.

Co-mail pricing and savings

This is where you really need to put on your detective hat: It can be difficult to figure out true savings when comparing printing companies. This is because every printer shows its savings and fees in different ways.

Here are a few ways printers will present your savings:

  • Guaranteed savings from local postage — Local postage is the highest amount for postage, or what you’d pay if you didn’t co-mail. Normally you’ll receive a discount between 10% and 13% from local postage.
  • Fee-based savings — You are charged a set fee based on your local postage (typically 5-8% depending on the quantity of the mailing). After paying the fee you get to keep the savings minus any fees.
  • 50/50 split — You keep 50% of the postage savings minus any fees.

Leveling the playing field

When comparing co-mailing services from different printing companies, the best way to make a direct comparison is to start with a checklist to see which savings are the best and which service meets your needs.

Be sure to provide each printer with the same mailing list, piece weight, and mail class (profit or nonprofit). If you are sending periodicals, you’ll also need to supply them with your advertising percentage. It’s very important that the information is identical for each printer — you want to be sure to get an apples to apples comparison.

When you’re comparing their responses, look at the following information:

  • Local postage — Is this number the same from each printer? Most likely it’s not.
  • Co-mail postage — This number will be significantly lower than local postage.
  • Difference between the two — This is the gross amount of savings that is on the table.

Identifying additional charges

Now you need to find out how much of those savings you’re really getting — your net savings. To do this, identify the assessorial charges that could come out of your side of the savings. You may see fees or charges listed different ways. Here are some examples:

  • A freight charge to get your publication to the co-mail facility, with the fuel surcharge
  • A freight charge from the co-mail facility to postal destinations, with the fuel surcharge
  • Cost for pallets/packing
  • Handling charge
  • Co-mail fee
  • Cost per pocket occupied on the co-mail equipment
  • Setup fees
  • Co-mail processing charge
  • Miscellaneous

You might also see fees for list processing, ink jetting addresses, and labels. These fees can really add up. Look at this example of an off-line co-mail savings template in which you split the savings 50/50 with the vendor:

  • Local Postage: $10,000.00
  • Co-mail postage: $7,000.00
  • Co-mail savings: $3,000.00
  • 50% split: your cut of the savings is $1,500

Now, add up the fees:

  • Freight to co-mail plant: $250.00 with fuel surcharge included
  • Freight to postal destination: no cost
  • Co-mail pallets: 5 @ $10 each = $50.00
  • Handling charge 1% of local postage = $100.00
  • Co-mail fee: N/A
  • Cost per pocket: 1 pocket @ $100.00
  • Setup fee: N/A
  • Co-mail processing charge: N/A
  • Miscellaneous: None

Your net savings after the fees:

  • $1,500 minus $500 = $1,000.00 savings or 10%

There are many different scenarios to see charges affecting your savings. However, the process to calculate your savings remains the same. The most important factor is to find your local postage and subtract co-mail postage to find your savings. Then make two columns: one for local entry costs and the other for co-mail costs. The difference between the two columns is your true savings.

Get a co-mail analysis

Just because printers organize co-mailing charges in different ways doesn’t mean you shouldn’t take the time to compare savings and find the perfect fit. If you’d like to see how much you’re spending and what you could be saving with your current co-mailing program, contact us. Our Administrator of Postal Affairs can provide you with a co-mail analysis that identifiest what your true savings are — and how they could be improved.

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