In January, we had an across the board rate increase on all USPS classes. This article is designed to be a high level resource guide where you can get links to more in-depth information on different ways to save money around mail to offset this increase. With all of the programs offered by the USPS, it can be daunting to know if you are capturing the most savings available. This guide will give you a simple way to know what is out there and where you can go to get more information. We are going to focus on the most applicable domestic savings applications that should be easy to implement in your organization.
Barcoding your Mailings – (Up to 83% Savings!)
Postage savings is the main reason most companies barcode their mailings. (See the chart below) As the pieces get larger, the savings can increase dramatically. Also, with the new January 22, 2012 rates, the second ounce is free with all First-Class Mail® – Automation. This can allow mailers to add extra marketing information at no additional postage costs!
Mailers who are sending similar, non-personalized pieces, can get bigger discounts using Standard Mail®. This is designed for a newsletter or a solicitation where every piece is the same and the customer can live with a slightly slower delivery. Things like invoices, statements and checks have to go First-Class Mail® because every piece is slightly different or has personal information. Check out the Standard Mail® Eligibility test provided by the USPS to see what class your mailing qualifies.
Pros to barcoding: It saves you postage, cleans addresses prior to sending, keeps track of customer moves, and processes mailings with automatic sorting and forms creation, not to mention faster delivery.
Cons to Barcoding – Software and hardware costs, there are many steps to barcoding that require resources, taking mail to the USPS, and keeping software up to date.
Additional Ways to Reduce Costs with Barcoding:
- Density – The more pieces you have going to a specific area, the better the rates.
- Destination Entry Discounts – For Standard Mail®, you can get deeper discounts (Up to $.043 per piece) by delivering it to the destination post office, sectional center or auxiliary service facility. This is great for mailers with a local mail list. Services are also available that can transport mail throughout the country to help you qualify.
- Intelligent Mail Barcodes – For mailers using this new barcode, there is an additional $.001 (Standard Mail®) and $.003 (First-Class Mail®) discount that can be applied.
- Presort Services – Many companies want the benefits of automation and barcodes but cannot cost effectively manage it inside their operation. These providers have one or several sorters that are similar to what the USPS uses in their facilities. Presort providers work on a revenue split arrangement with the customer and USPS.
Here are the minimum requirements to barcode your mailings:
- Pieces – At least 500 pieces for First-Class Mail® or 200 pieces for Standard Mail®.
- Software – Need software that meets all USPS certifications.
- Permits – Need to have at least one permit from the USPS
- Preparation – All mailings must have barcodes on each piece, be sorted, placed in trays with tray tags, have reports attached and brought to the USPS for processing.
Commercial Base™ and Commercial Plus™ – (Up to 32% Savings!)
There are additional discounts from 2-32% off the retail rates, for mailers who submit their pieces through an IBI meter (Most mailing systems from the last 5 years), PC Postage, Click-N-Ship (USPS.com) or a permit imprint. These rates are available for Priority Mail®, Express Mail®, and First-Class Mail® Package Service.
There are two different tiers of savings:
Commercial Base™ – 2-21% discount for single piece rates that you can get for all of your packages.
Commercial Plus™– This is an additional 1-15% discount if specific volumes below are met.
Express Mail® – 5,000 pieces in the previous four quarters or who have a customer commitment agreement with the USPS.
Priority Mail® – 5,000 at one time or 75,000 total pieces in the previous calendar year, or who have a customer commitment agreement with USPS.
First-Class Mail® Package Services –There is a Plus service but the rates can be higher than the Base rates.
Note: To reach the Commercial Plus™ volumes, it can be for your combined usage across multiple locations. Also, most postage meters do not have Commercial Plus™ rates and can only do the Base pricing. You may want to contact your vendor for different options.
Additional Savings – Commercial Plus has a rate for .5 lbs for Priority Mail® starting at $4.39 compared to Retail and Base pricing which starts at 1 LB at $5.20 and 4.90.
Electronic Confirmation Services – Up to 100% Savings!
The USPS has different levels of tracking available with prices based on service levels. The three that we will discuss are Return Receipt used for Certified Mail, Delivery and Signature Confirmation. Inside each of these categories they have a Retail and Electronic rates.
- The retail fee can be purchased at your local Post Office™ or you can get supplies that can be used in your office through a postage meter.
- The electronic fee is for mailers who purchase postage online (for example, using Click-N-Ship®) or are capable of sending and receiving electronic files of their shipments. Postage Meter vendors will typically offer this function as an optional item at an additional fee. PC Postage providers can also provide this service.
The savings for Electronic Confirmation can be significant as you will see below. A Certified Mail™ with Electronic Return Receipt will cost $4.10 instead of $5.30 ($1.20 Savings!). Also, every Priority Mail® and First-Class® Package Service can have Electronic Delivery Confirmation for Free!
Additional Savings Ideas
Here are some additional strategies for you to consider helping lower postage and shipping costs.
- Compare USPS Rates to FedEx and UPS– USPS can provide faster delivery (To specific zones) at lower costs for light weight items (Less than 10 LB’s) and should be shopped regardless of your discount. Here are the main reasons why:
- Regardless of your discount with the private carriers, they typically have a base rate that they do not go below. When you take this rate, plus the additional fees for residential, delivery area surcharge, fuel surcharge, address corrections and Saturday delivery, USPS may be a bargain.
- The USPS has amazing rates on light weight packages less than 13 ounces ($1.64-3.28 vs most private carriers that start over $5.00). No one can typically come close to these rates, which is why the main E-Tailors will typically send these items through the Post Office. This is especially now that Delivery Confirmation can be added for free!
- When comparing Ground Service to USPS Priority Mail®, many areas will get faster delivery.
- Packaging is Free for Priority Mail® and Express Mail® with special rates for flat rate boxes.
- Consider Media Mail®, Library Rate® and Bound Printed Matter® for printed material and DVDs – If you can live with the 3-8 day expected delivery time, these services may be a huge win. You can ship 1 LB starting at $1.86 and 10 LBs starting at 3.39! You need to pay special attention to the type of material you are sending (As well as where it is going with Library Rate) to make sure it qualifies.
- Folding your Flats– If you are sending out light weight items in flat sized envelopes (9X12 or 10X13) you may be able to save by folding them in half into 6X9 envelopes. The savings is significant in two ways.
- The postage savings is huge because you are changing from a Flat to a Letter category.
- The envelope costs are much less expensive.
The goal of this article was to give you either some direction or review of the different savings available. Hopefully with this overview and the links provided with deeper detail, you can find strategies to lower your mailing and shipping costs and offset this year’s rate increase.