The last 15 years have been a difficult time of industry consolidation for printers and mail shops. You have no doubt seen friends and competitors acquired or shut their doors as it has become ever more difficult to thrive in an era of declining print and mail volumes. But some companies are still thriving. We've noticed that the most profitable mail houses tend to use the following strategies for success:
Focus on a Competitive Niche: The printers and mail shops thriving in today's market are those which have selected a few market niches to focus on where they can be particularly competitive, and then have matched the technology they use to their chosen market. For example, if your specialty is large production runs for the financial services market, being competitive may require investing in a state-of-the-art digital printer and a continuous flow operation. If your specialty is quick-turn solicitations for the nonprofit industry, a high-speed laser printer combined with decades-old inserting equipment may work perfectly well.
Use Postal Logistics to Minimize Mailing Costs: The USPS reduces what it charges to deliver a piece of mail commensurate with the work you save them. If your mailing is large enough, you can save money by drop shipping trays of mail to the Network Distribution Centers (NDCs) and Sectional Center Facilities (SCFs) closest to the mail's ultimate destination. However, all mail being drop shipped needs to be sorted, sleeved, tagged and strapped according to stringent postal service regulations to ensure its acceptance at the final destination point.
Another alternative is to work with a commingling company who will pick up your unsorted mail, combine it with mail from other sources to meet minimum quantities, and ship it to the mail facility closest to its destination. Using a major commingling company provides a multitude of advantages for a mail house because it handles all of the sorting, sleeving, tagging, strapping, paperwork and shipping, while customers benefit from our substantial volume discounts.
Decrease Direct Labor Costs: Mail houses focusing on maximizing profit should look seriously at options to decrease their labor costs, such as outsourcing labor-intensive operations and developing a flexible workforce. Additionally, focus on reducing profit-killing down-time by investing in continuous processing equipment and avoiding having jobs lined up on your press waiting for client approval.
Expand into New Value-Added Services: Unfortunately, the price erosion surrounding commodity mailing services is likely to continue. While you should build your business by becoming increasingly competitive handling certain types of mailings, you should also seriously consider what additional services you could offer that provide higher profit margins. Some fields that could allow you to build upon your existing expertise and interests include digital marketing, data analytics and fulfillment operations.
Debbie Sylvester, VP of Sales at MailSmart Logistics, has been helping businesses and nonprofits save money on direct mail for 19 years. She can be reached at 302.545.1629. If you're interested in exploring ways to maximize your profits in more depth, we've developed a 17-page eBook titled "Maximizing Your Mail House's Profits" with more learnings from the front lines. Download your free eBook at www.MailHouseProfits.com.