Postage Rates Are Increasing—What You Need to Know to Lower Costs

10 January 2018 / By Mike Gunderson
Here’s a great overview of a process many of us aren’t clear on—special thanks to United Printing and Mailing for sharing!

With postal rates going up on January 21, it’s important to find ways to save money on your mailing campaign budget. You can optimize your data by practicing good list hygiene via CASS and NCOA, or slim your mailing’s physical dimensions.

At the same time, though, it’s probably not smart to drastically scale back how many pieces you mail to prospects and current customers.

Fortunately, two good workshare methods approved by the USPS can help meet your cost challenge: commingling and co-palletization. Mail that gets prepared by either program gets processed more quickly by the USPS, which means that it arrives in-home sooner. And in the long run, they can achieve operational savings in addition to the immediate postal discounts.

But how do they compare?

Here’s some background on both to help you decide which option is right for you.

Commingling

The concept here is simple: save money by combining your mail with that of other marketers. Letters and flats (self-mailers and postcards) can be organized in trays and tubs by zip code. The more digits that are matched in the sort, the greater the discount that is applied.

The cost benefits to large volume mailers are obvious, but for small volume mailers, the postage savings can be even more of a make-or-break factor in a given campaign.

Commingled mail can bypass the usual intermediate processing facilities by going directly to the right Sectional Center Facility (SCF) or Network Distribution Center (NDC) nearest its destination.

Some mail is not time-sensitive. It can wait for mail from other participants to show up. So commingling may make more sense. But if timing is critical—think retail promotions—that mail should leave your vendor’s doors sooner, not later.

Co-Palletization

CoPal combines addressed and sorted mail trays from different marketers or providers, separated by zip code, on the same pallet. This way, each full pallet is completely prepared, then trucked for an easy passage to its destination SCF. Again, USPS discounts apply to mail that is dropped deeper into the system thanks to avoiding several steps.

Ideas In Action

  • Be sure to take other factors—like your campaign’s format, or your list composition—into consideration. Talk with your vendor to figure out how specific mailings may benefit from either practice.
  • Using either program may require more lead time and upfront costs. These expenditures can be offset by the savings you can achieve via the USPS discounts. You may also be able to negotiate your transportation costs for more savings. Bottom line: Know (and present) the big picture when getting buy-in from all of the stakeholders when planning a campaign.
  • The savings from either process can be plowed back into the bottom line. But think of ways to apply them toward future growth. They can pay for testing offers and formats, greater personalized efforts, or follow-up and reactivation mailings.

Contact Gunderson Direct today to learn more about how we can help you save money. We put our postal expertise to work for your business so you can save money on postage and spend more on what really counts.

About The Author

Mike Gunderson

Mike Gunderson is the founder of Gunderson Direct, Inc., a direct marketing agency that helps businesses drive new leads and close more sales through traditional offline channels, especially direct mail.

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