Master Manufacturer: How to Do a Co-Mail Analysis
The Shared Savings Method (SSM) requires an education in postage and co-mailing technologies, as each element in the process is broken out and billed for individually. The mailer then splits the savings with you.
Here’s where it gets a bit more complicated. Each billable cost item is itemized; however, each mailer may or may not charge for different items in the equation. The best way to account for these items is to list them all, and use their quoted rate or label as “included.”
The difference-as-compared-to-what may vary from mailer to mailer. Some mailers will, again, use the direct-entry method, whereas others may use the presort costs. The presort costs are lower than direct entry; therefore, the split savings comes from a lower number.
However, presort costs provide for two advantages. First, any additional drop-ship savings you reap through the co-mail process are generally not included in this co-mail cost model. Therefore, you retain 100 percent of any additional drop-ship discounts. Secondly, this method will directly reflect your mail list’s participation in that co-mail pool, so you will not be as susceptible to the vendor’s co-mail volume fluctuations, which tend to have regular ups and downs.
If using SSM, the following items must be accounted for:
• co-mail/pal fee;
• percent of presort savings;
• admin/setup fee;
• estimated freight;
• fuel surcharge; and
• fuel surcharge percent.
Here’s what you’re looking at:
• The co-mail fee is the mailer’s cost for providing the service, determined by applying the discount percent to the appropriate figure. This is the mailer’s “cut” of the savings it captures for you.
• The percent of presort savings is the percentage mailers use to determine the co-mail fee. This percent, as mentioned earlier, may be off of direct entry or the presort amount. It is important to know which figure is being discounted.