There are only about two dozen Bulk Mail Centers in the United States, and to qualify for the lowest rates, commercial mail—including parcel post, media mail, Standard mail and periodicals in bulk form—must travel through one of these centers before delivery.
To penetrate deeper into the postal system and thus achieve faster turnaround and lower rates, direct mail printers and fulfillment houses have developed successful commingling and copalletization practices. The tips from postal experts below illustrate the benefits of each program and best practices for participation.
1. Learn the Benefits of Each Program
First, vendors commingle, or merge solo mailings, to achieve a minimum density of 150 pieces per five-digit ZIP code. Then the mailings are palletized and drop-shipped as close to a Bulk Mail Center as possible, so they can be processed more quickly and at the lowest cost.
In copalletization, the vendor takes mail that already has been prepared (addressed, sorted and sometimes even palletized) and then breaks that mail up and rebuilds it into pallets representing a greater density per five-digit ZIP code. Participation in each program varies according to the mailer's needs and vendor's capabilities.
2. Know Which Mailings Might Benefit
According to Charley Howard, vice president of postal affairs for Harte-Hanks, a direct and targeted marketing solutions provider, commingling works better for First Class and non-time-sensitive Standard mail. "Time-sensitive mail ... tends to not lend itself to commingling because it can't sit around waiting for other participants," he explains. He says copalletization is used more for flats and periodicals to alleviate the May 2007 spike in flats postage. In copalletization, it is more likely to mix non-time-critical mail with more time-critical mail when opportunistic. "A lot of printers may be doing catalog mailings where the catalog has a longer shelf life and there may be some retail pieces that have a very short shelf life ... that are coming through at the same time, and they can pack the two together and get better discounts," Howard describes.
3. Remember Every Drop Is Unique
Which program you use depends on the mail format, service type, list composition and time requirements, and varies for every mailing. Randy Stumbo, director of distribution and postal affairs for Meredith Corp., a media and marketing company involved in publishing, points out that smaller, sparser lists stand to gain the most in postal savings, and there is a point where a list becomes too large to really benefit from these programs. Conversely, he says a small, regionalized list already can achieve enough penetration on its own without a program. Stumbo suggests asking a vendor to determine if working with all or part of your list is more cost-effective. "It's more difficult for the vendors to execute, but there are situations where it does make sense just to do certain parts of [the list]," he says.
4. Become an Expert and Negotiate
The added costs for commingling and copalletization are transportation and administrative fees like list processing. "The vendors have different ways of charging for these services. Sometimes it's a cost per thousand, like any other type of machine you use; other times, it's more of a shared benefit type of arrangement," Stumbo says. He advises obtaining a detailed analysis of your true costs of the mailing going out alone versus participating in the program. He also warns not to rely too heavily on your vendor for guidance. "Make sure you understand the analysis. You need to ask good questions ... It's important that you acquire the knowledge rather than just accept what you hear," he advises. As far as transportation rates go, Stumbo notes that mailers should try to negotiate the best possible line haul freight rates. "The lower the rates, the better the economics for the buyer as far as return on investment," he says.
5. Forecast Costs Against Savings to Win Buy-In
Getting organizationwide buy-in can be a hurdle, as commingling and copalletization mean more lead time, new up-front costs and a later mail date (although hopefully a sooner in-home date). Stumbo knows how difficult it can be to get buy-in. "It requires a bit of a leap of faith on the part of the businesspeople involved. When you coordinate these things, you need to convince them that they're not going to be negatively impacted," he says. "Savings is going to be in postage, so take those additional forecasted costs against postage, at least until you build up some history over a year's time. And eventually your postage cost is going to keep going down and down, and eventually you have to start forecasting those costs separately," he advises.
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