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Everyone into the Pool - 11/2/2010 -

The practice of co-mailing is "growing like wildfire,” says one major printer. Here’s how you, too, can reduce postage costs with co-mailing.

By Jennifer J. Salopek

Even as associations continue to explore electronic publications and iPad apps, print is still our primary way of reaching our members. And for every print magazine or newsletter, paper and postage are significant cost centers. Association Media & Publishing’s October Lunch & Learn at the American Bankers Association highlighted opportunities for savings.

Watkins Hunt of New York-based paper company Lindenmeyr Central opened the session with a detailed overview of the paper market and potential pricing throughout 2011. He noted that demand for coated paper thus far in 2010 shows a 10 to 20 percent increase over 2009 and added that expected price increases are causing major publishers to build inventory at current favorable prices. Increases have been announced each quarter in 2010. Even so, Hunt doesn’t expect that pattern to continue into 2011.

"The industry has drastically curtailed supply over the past five years, as the Internet and the economic downturn have combined to reduce print publishing,” he said. "Suppliers have been chasing the demand curve with the supply curve.”

However, Hunt noted, the supply line is now intersecting the demand line, and warehouses are filling up with paper inventory. "I don’t see how the industry can sustain current prices unless there is a dramatic upturn in demand, and folks should probably expect some relaxing in 2011,” he said.

Next, Steve Jost, manager of co-mail solutions at Quad Graphics, gave an overview of co-mail basics and how getting into a co-mail pool can save publications money. This happens in several ways:
 

·         Mail can be sorted down to carrier route.

·         Mail can be drop shipped to targeted facilities, down to neighborhood postal facilities.

·         Multiple publishers share costs of bundle and container fees.

·         The USPS offers rewards for efficient mail in the form of discounts.

A publication must meet specific requirements to enter a co-mail pool, including minimum circulation (overall and regional versions); minimum deflection or droop (allowing books to pass through the machinery); and timely mail dates. In addition, new regulations on address placement for flat mailing pieces have created more opportunities for in-line addressing, bigger co-mail pools, and more cost savings for pool participants.

The downside to co-mailing, as Jost put it, is that it’s extremely interdependent: When one mailer fails, the entire pool fails. This can occur with failed move updates, excessive deflection or droop rate, and missed deadlines that can result in significant penalties. Jost assured attendees that Quad Graphics and other suppliers continue to seek creative solutions for high-circulation publications, to push down minimums, and to build solutions for unique sizes.

"Everybody has heard about co-mailing and many association publishers have experienced cost savings,” he said. "It’s growing like wildfire.”

An early passenger on the bandwagon was Rhoda Geasland, production and circulation director for the National Association of Insurance and Financial Advisers. Geasland has been co-mailing the association’s flagship publication, Advisor Today, for more than three years. She had some concrete advice for association publishers considering jumping into the co-mailing pool:

 

·         Keep co-mail minimum quantities in mind. Although these vary depending on supplier, they’re a factor to consider with mail splits such as advertising regionals.

·         Keep your CAPS account current.

·         Apply for all applicable entry permits.

·         Plan and forecast for such additional costs, such as freight from the printing plant to the co-mail facility, fuel surcharges, line fees, list processing, and so forth.

Despite the additional costs, Geasland said the postage savings resulting from co-mailing can make for an improved bottom line. She saves an average of $5,000 per month over local entry, an average of 17 percent that results in a total savings of more than $64,000 annually.

Geasland also emphasized that co-mailing must be taken into account up front; participating in a co-mail pool can drive design, trim size, binding, and mail dates. "You need to impress upon your editorial and art staff the importance of keeping the production schedule on track,” she said.

Jennifer J. Salopek is a freelance writer in McLean, Va., who writes regularly for the association world. Association Media & Publishing thanks her for volunteering to cover this event for our members who were unable to attend.


 

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