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Catalogs realize significant savings from using co mail. In fact, almost all catalogs participate in co mail pools. Co mailing is a win / win situation for both the catalog and the printer. The printer keeps some of the postage savings and the catalog realizes significantly lower postage costs.
It is straightforward to get to your co mail savings and to your bottom line catalog cost. You need three numbers:
Your catalog printing cost consisting of printing, paper, bindery and prepress. All your catalog costs up to freight, co mailing and postage should be included in your “printing cost.”
The co mail cost you pay to the printer. The printer typically charges a percentage of postal savings, freight and administrative costs. Each printer format is different. Simplify the discussion by asking for the total cost for co mail from the printer or “what is the total invoice cost paid to the printer.”
The cost paid to the USPS, the post office, for postage.
Printing Cost + Co Mail costs + Postage = Total catalog cost.
Co mail should reduce the net postage cost significantly. For example a catalog with a circulation of 200,000 copies could realize a net savings of $.06 to $.04 per catalog. $.06 translates into a $12,000 cost savings.
Co mail pools are of two types. Large printers run their own pools and Consolidators run pools that collect catalog from medium and smaller printers. Printers have both in-line pools where a limited number of catalogs are bound and ink jet together on the same bindery line. Off line pools are where bound catalogs are send through a second process where they are ink jet along with up to 24 catalogs.
While there are some differences in how co mail pools are organized, the real factor of interest to the cataloger is the bottom line cost. Getting comparable costs is straightforward:
Category Printer A Printer B
Cost per catalog
While you have actual costs from the incumbent printer, it is important to know that competitive bids are truly comparable. For a printer to compare their mail pools, they need an actual mail tape to see how they would have done for the same time period with the printer’s actual mailings for that week. Printers will provide a pretty solid cost estimate based on the analysis of the actual mail files. Printers don’t typically guarantee costs savings but the printer is your source for a good reliable estimate of their co mail pools bottom line costs.
Both your own incumbent printer needs to outline how much mail will actually go in the mail pool versus how much mail is already carrier route qualified and to be mailed outside the mail pool.
In addition to pure cost considerations are their service components to evaluate in comparing co mail costs? The primary service components are the delivery windows that are guaranteed and how well the delivery windows are met. One service advantage of printer supplied co mail versus consolidators is it takes less time because the logistical step of having to truck catalogs from the printer to the consolidator’s facility is eliminated. Outbound freight time from the printer to the consolidator can add 3 to 7 days to the time to mail a catalog.
Of course the biggest printers claim that their service is best because they are the biggest and that their prices are the best because they are the biggest. Most catalogers find that the biggest printer’s co mail pools are similar in size to other printer’s co mail pools because the biggest printers run multiple pools out of multiple locations so they are running more co mail pools but not necessarily larger co mail pools.
Co mail pricing is well understood by the competitive printers as well as by catalogers so the tendency is to find comparable prices between printers without the very biggest printers having a cost advantage.
But it can be difficult to get to your co mail costs. Some printer’s spreadsheets explaining co mail would take a Ph.D. to decipher. The answer to understanding the costs is to “dumb it down” and ask for two simple numbers—The check that I write to the printer for co mail (or the invoice costs of everything that’s not included in the basic costs for printing, paper and bindery,) and the check I write to the post office. Those two costs are your net postage costs and the numbers you need to compare costs.
Capturing co mail savings is an area of significant cost savings. Understanding the cost structure of co mail and getting comparable quotes is an important part of the management of a catalog’s financials.