The best way to save money on mailing is lowering your postage costs. Mailers realize savings by taking advantage of workshare postage discounts offered by the US Postal Service. As the name suggests, it involves work. You can outsource the task to a service provider or do the work yourself. How do you know which is the best approach?
Mailers who present barcoded and sorted mail packaged for efficient distribution pay lower postage rates. The US Postal Service can efficiently transport properly prepared trays, sacks, or pallets of mail to USPS hubs and distribution centers without further handling. This saves the USPS money and they pass some of the savings along to the mailers in the form of postage discounts.
The Outsourcing Model
Many mailers earn postage discounts by contracting with a mail presort service provider. Outsourcing is a good choice for organizations with low or inconsistent mail volumes. Mailers address their envelopes, insert the contents, and add postage before turning their mail over to the service provider for barcoding and sorting. Presort service providers will dictate the postage rate at which mailers should meter their mail. The presort company will collect client mail every day according to an established schedule and transport it to their sorting facilities.
Several factors determine the fees mail service providers charge their customers, including the volume and makeup of the mail. Low volume mailers, or those with low zip code density may pay a monthly or per-piece service charge to the presort vendors. Troublesome mail that causes sorting equipment to reject the mail because of data capture problems may trigger upcharge fees.
If they don’t charge a handling fee, the presort service providers make money in rebates from the US Postal Service. Rebates depend on the difference in the rate applied by the mailers and the rate at which the presorter can qualify the mail by sorting, drop-shipping, or co-mingling mail from multiple mailers.
Presort vendors may impose afternoon cutoff times to allow them time to pick up mail according to their established routes and return to their processing centers in time to comingle and sort the day’s mail. Any mail generated after the cutoff time must wait until the next mailing day or be deposited at the local post office at full postage rates by the mailers themselves.
Delays can also occur after presort mailing vendors have mail in their possession. They may hold mail for a day to accumulate more volume and greater discounts. Some presort companies maintain multiple locations and ship their client’s mailpieces from one facility to another depending on the zip code distribution for the day’s mail. Extra transportation can cause pieces to enter the mailstream a day later than planned. Ideally vendors will notify clients when such delays occur.
Outsourcing mail to a presort service provider isn’t always the best solution, however. An organization may have security concerns. They don’t want the mail to flow through the hands of a third party before being entrusted to the Postal Service. Or, they want to run mail later into the day, beyond a deadline set by an outside presort company. Cost may also be a factor. With enough mail volume, a mailer may qualify for the lowest postage savings on their own, with no need to share the discount with a presort mail vendor.
How do you know if in-house mail sorting is the right solution for you? That takes some careful research, analysis, and number-crunching.
When weighing the decision about outsourcing or insourcing mail presort, it is critical to know your own mail. The best candidates for in-house mail sorting:
Which is Better-In-House or Outsource?
Everyone wants to save money on outgoing mail. Barcoding and pre-sorting not only lowers postage costs, these steps can result in speedier and more predictable delivery times. Mail featuring Intelligent Mail barcodes (IMb’s) also allows mailers to track their mail and take advantage of other US Postal Service features and promotions. With the plethora of benefits associated with mail presorting, the only question for mailers is how to best qualify for the workshare discounts.
Fortunately, Tritek Technologies builds a variety of equipment that helps organizations handle their own outbound (and inbound) mail. We offer machines that operate in small spaces. Our reading technology is the best in the business, allowing us to read, barcode, and sort mail other equipment will reject.
Many of our customers leverage their machines for double-duty, acting as inbound mail sorters in the mornings and outbound sorters in the afternoons. The savings organizations realize by processing incoming mail more efficiently can help establish the ROI necessary for investing in an outbound mail sorting solution.
Every operation is different. Contact the professionals at TriTek Technologies for an honest assessment of your mail sorting needs. We’ll analyze your mailings and tell you if an in-house sorting solution is the best way to achieve postage savings for your organization.