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I recently had the opportunity to talk with two companies about their document workflows. In each of these cases, the companies were looking for more ways to cut the cost of producing mail for their organizations. No big surprise there, almost everyone I talk to has that goal.
Outsource providers need to trim costs in order to be competitive. And in-house operations are looking for ways to keep mail from being a communication channel that dwindles away to the point where sustaining the mail department becomes too expensive. Everyone is looking for ways to save money and all the easy steps have already been taken.
The interesting thing about these two companies is that they were both considering a plan to migrate away from postage meters. I couldn't agree with them more.
Consider how you pay for postage
Metering is an expensive way to pay for postage. Factoring in what it costs to apply postage is often overlooked but it is a cost factor. And the costs can be reduced.
Here are some of the expenses associated with metered mail:
1. Meter head rental - It is unlawful to own a meter. You have to rent or lease them.
2. Meter bases - These are the units that transport the envelopes under the meters. Most shops buy these inserting machine components. Note that some companies meter separately from inserting, making the operation even more expensive!
3. Ink and print heads - The ink cartridges for the digital meters are a lot more expensive than the old mechanical meters where you just bought a can of fluorescent ink and refilled the reservoirs. And the print heads have to be replaced every once in a while too.
4. Paying for postage in advance - Postage meters have to be loaded up with money that can sit on the meters for long periods of time, earning no interest.
5. Phone lines or internet connections - Required to reload the meters.
6. Lost productivity - While changing ink cartridges and downloading funds to the meters no mail is running on the inserters. Meters can also be a source for jams and can be the slowest component of the inserting system, preventing you from running at full speed. This limitation can also reduce the benefit you might get from installing faster inserting equipment.
7. Difficult postage recovery - Once an envelope is metered, the money is spent. If a job is pulled after metering, mail center employees have to remove the contents from the envelopes, sort and count envelopes, fill out forms, and take it all the Post Office. Eventually you'll get back 90% of your postage in the form of a money order. Getting the postage credited back to the original cost centers rarely happens.
8. Multiple meters - One of the companies I spoke with had two meters per inserter - one for 1-ounce mail and the other for 2-ounce mail. The other company had installed more expensive resettable meters.
Converting to permit mail may be worth a look
If you are looking for more ways to cut costs in mail operations, take a look at permit mail as an alternative to metering. None of the drawbacks listed above apply to postage paid by permit. This makes it an attractive option for companies who are currently using meters to pay for postage.
If you are running mixed weight mail then you'll need to look into a manifesting solution or splitting your mail into one, two, and three-ounce mailings. Compare the cost of making those software investments or procedural changes against your costs of maintaining your current metering capabilities. You might find that there is an untapped source of savings you can use to lower the overall cost of producing mail.
Mike Porter is an expert in Print and Mail operations and President of Print/Mail Consultants, an independent consulting firm that helps companies nationwide be more productive, adapt to changing requirements, and lower costs in their document operations. For more ideas about trimming mailing costs visit www.printmailconsultants.com or email Mike directly at mporter@printmailconsultants.com.
Outsource providers need to trim costs in order to be competitive. And in-house operations are looking for ways to keep mail from being a communication channel that dwindles away to the point where sustaining the mail department becomes too expensive. Everyone is looking for ways to save money and all the easy steps have already been taken.
The interesting thing about these two companies is that they were both considering a plan to migrate away from postage meters. I couldn't agree with them more.
Consider how you pay for postage
Metering is an expensive way to pay for postage. Factoring in what it costs to apply postage is often overlooked but it is a cost factor. And the costs can be reduced.
Here are some of the expenses associated with metered mail:
1. Meter head rental - It is unlawful to own a meter. You have to rent or lease them.
2. Meter bases - These are the units that transport the envelopes under the meters. Most shops buy these inserting machine components. Note that some companies meter separately from inserting, making the operation even more expensive!
3. Ink and print heads - The ink cartridges for the digital meters are a lot more expensive than the old mechanical meters where you just bought a can of fluorescent ink and refilled the reservoirs. And the print heads have to be replaced every once in a while too.
4. Paying for postage in advance - Postage meters have to be loaded up with money that can sit on the meters for long periods of time, earning no interest.
5. Phone lines or internet connections - Required to reload the meters.
6. Lost productivity - While changing ink cartridges and downloading funds to the meters no mail is running on the inserters. Meters can also be a source for jams and can be the slowest component of the inserting system, preventing you from running at full speed. This limitation can also reduce the benefit you might get from installing faster inserting equipment.
7. Difficult postage recovery - Once an envelope is metered, the money is spent. If a job is pulled after metering, mail center employees have to remove the contents from the envelopes, sort and count envelopes, fill out forms, and take it all the Post Office. Eventually you'll get back 90% of your postage in the form of a money order. Getting the postage credited back to the original cost centers rarely happens.
8. Multiple meters - One of the companies I spoke with had two meters per inserter - one for 1-ounce mail and the other for 2-ounce mail. The other company had installed more expensive resettable meters.
Converting to permit mail may be worth a look
If you are looking for more ways to cut costs in mail operations, take a look at permit mail as an alternative to metering. None of the drawbacks listed above apply to postage paid by permit. This makes it an attractive option for companies who are currently using meters to pay for postage.
If you are running mixed weight mail then you'll need to look into a manifesting solution or splitting your mail into one, two, and three-ounce mailings. Compare the cost of making those software investments or procedural changes against your costs of maintaining your current metering capabilities. You might find that there is an untapped source of savings you can use to lower the overall cost of producing mail.
Mike Porter is an expert in Print and Mail operations and President of Print/Mail Consultants, an independent consulting firm that helps companies nationwide be more productive, adapt to changing requirements, and lower costs in their document operations. For more ideas about trimming mailing costs visit www.printmailconsultants.com or email Mike directly at mporter@printmailconsultants.com.
