Strategy: It’s All About Co-Mailing

Co-mailing has become an extremely important way to reduce postage costs. This is the process of combining catalogs with other catalogs to create a bigger mail pool that yields greater discounts for the companies that participate. It’s a complicated topic to comprehend. So first I’ll discuss what co-mailing is and how to do it, then get into its advantages and disadvantages, and lastly what you can expect in terms of net savings.

Ways to Co-Mail
There are two ways to commingle publications for co-mailing.

In-line co-mailing occurs when multiple catalog titles are combined into one mailstream during the stitching and ink-jetting stage on the bindery line.

Off-line co-mailing involves combining bundles from different catalog titles to create more mail that can be sorted at the sectional center facility (SCF) level and put on carrier route pallets — both of which will gain better discounts.

The number of catalogs you mail at one time determines which method is right for you in the course of your mailing schedules. Both techniques have their advantages and disadvantages, but the postal savings realized from co-mailing more than offset the disadvantages.

In-Line Co-Mailing
Advantages
4 Quantity Mailed: At least 300M and up.
4 Postal Savings: This is gained from better presort levels and possibly better drop-ship discounts. Also, more mail qualifies at the carrier route level.
4 Better Deliverability: More carrier route or five-digit pallets result, enabling the catalogs to penetrate the postal system deeper. This helps increase the overall catalog production flow through the postal system, from start to finish.
4 Ink-Jetting: You can ink-jet the order form at the centerfold of your catalog, as well as on the back cover.

Disadvantages
8 One of your competitors could be a co-mail partner arriving in-home on the same day. This obviously could occur without co-mailing, too.
8 A co-mailing partner might decide to drop out at the last minute. If so, you’re stuck without a partner, which eliminates the savings you might have been counting on.
8 Your mail date might have to be adjusted by a day or two in order to participate. In-home dates can be longer as a result.
8 If the company you’re co-mailing with is late on its creative files and misses the press date, it could be forced out of the co-mailing program, which is worse for the remaining participants.
8 Co-mailing can drive up manufacturing costs, which could potentially eliminate some of the resulting postal savings.
8 Catalogers with large mailstreams 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.
8 The printer rather than the service bureau must do the presort, which requires more coordination on your part.
8 You may have to redesign your back cover and order form to accommodate your co-mail partner

Off-Line Co-Mailing
Advantages
4 Quantity Mailed: Starting as low as 50M.
4 Postal Savings: Larger gross postal savings, as catalogs participating are generally shorter runs that start with higher postage rates.
4 Better Deliverability: More catalogs are delivered to SCFs rather than bulk mail centers, penetrating the USPS deeper. There’s a larger discount to deliver to an SCF.

Disadvantages
8 Like in-line, one of your competitors could be a co-mail partner.
8 A co-mail partner could still drop out.
8 The mail date may still need to be adjusted.
8 A co-mail partner could still miss the press date.
8 Increased manufacturing cost: Off-line is more equipment- and labor-intense.
8 The size of the mailstream can be a factor with off-line. This depends on the printer’s pricing structure.
8 Your printer must do the presort, just like in-line.
8 A redesign may be required to accommodate co-mail partners.
8 Ink-Jetting: Only the back cover can be ink-jet imaged.

In-Line Requirements
While in-line co-mailing offers greater benefits, not every cataloger is in a position to co-mail. There are certain requirements for the mailer:

1. The catalogs must all be the same trim size.
2. The ink-jet areas also must be the same on both the order form or order form page and on the back cover.
3. Partners generally need to be within 32 pages of each other in total page count.
4. 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 order flow).
5. Your printer must do the ink-jet formatting and list sorting since its machinery does the coding. This work can’t be done by your service bureau.

Most printers charge by splitting the postage savings equally with the mailer on a proportional basis. The savings are generally proportional to the number of names you contribute: If you supply 75 percent of the names, you’ll get 75 percent of the savings.

The chart below is a typical co-mailing cost analysis. The company with the lower quantity (Mailer C) is charged more since Mailer A is having a greater direct impact on the savings. Mailer A will save $22,500, Mailer B will save $15,000 and Mailer C will save $9,000 before paying the printer.

The Dingley Press is the only printer I know of that charges its customers on a per/M basis for the actual service it performs for in-line co-mailing: The cataloger receives 100 percent of the postal savings, and it pays Dingley a set fee per thousand catalogs. Other printers approach their charges differently, but the savings are similar.

In-line co-mail partners generally number two to four. The number of off-line participates is almost unlimited — 12 is not uncommon — but off-line co-mail partners are mostly smaller mailers. While printers may approach their charges differently, the end results in terms of the potential savings are similar. The typical result is higher gross savings, but the fee is also higher because the off-line process is totally separate from the binding and requires capital investment for the machinery and labor to run it.

If you don’t co-mail your catalog with other catalogs, you should. The savings can be significant, and the advantages far offset the disadvantages.

Stephen R. Lett is the president of Lett Direct, a catalog consulting firm specializing in circulation planning and forecasting. He can be reached at (302) 539-7257 or by e-mail at steve@lettdirect.com.