If you have not … within the last twelve months – undertaken a concerted effort to reduce your postage costs, you could be wasting big dollars.
Yes, yes, the U.S. Postal Service sets postal rates. We can’t change them. But you can squander hard earned cash when you:
Over-Post Letters and Packages: This occurs when you are unsure of the actual cost, so you just “guess high.”
Unnecessarily Use Higher Cost Postage Classes: There are many ways to send letters and packages. You should use the lowest cost method that gets the job done.
Have a Labor-Intensive Process: Time is money. For a business to succeed today, it must be efficient and productive in every phase and continually find ways to lower cost. Are you driving to the post office more than necessary? Using a labor-intensive system?
Have a Slow Outgoing Mail System: If your outgoing mail process causes delays in getting your correspondence into the mail delivery system, your entire business will slow down, including your cash flow.
Over-Spend on Purchases of Postage: If you have a postage meter or purchase your postage online, you are probably paying a fee each time you purchase postage, or a monthly fee. You need to get bids and reduce these costs. To get your lease business, some companies will waive the refill fees altogether.
Mail Unnecessarily: Don’t use snail mail when it does not offer advantages over the alternatives – phone, fax and email. Traditional mail is slow and expensive. Even contracts can be scanned or printed to pdf and emailed.
Theft: If you use stamps rather than a postage meter, the stamps are like cash. Meters can also be used by employees for personal mail. Make sure that you have a system for tracking pilferage.
Over-Spend on Postage Equipment: The U.S. Postal Service tightly governs postage meters. The only option is to lease them from one of the four sanctioned companies – Pitney Bowes (www.Pitneyworks.com), Neopost (www.Neopostinc.com), Hasler (Haslerinc.com) and Francotyp-Postalia (www.francotyp.com). The machines are commodities, for the most part. Get a bid from each company, work them against each other and get your cost down.
Pitney Bowes is the entrenched market leader, and they price accordingly. We recently re-bid our postage meter and scale contract and dropped our lease expense from $130 per month to $22, and our refill charge from $19 to $0 (yes, zero).
There are also print-on demand postage services (www.Stamps.com and www.Endicia.com) which allow you to, via a website, enter package weight, dimensions and desired mail class and print postage right on your desktop printer. This is a little less efficient than the postage meter with built-in scale, but allows you to avoid the lease cost of a postage machine. However, we found the print-on-demand services to cost about $20 per month … about the same as leasing equipment.
Get more information on postage meter systems at www.buyerzone.com/mailroom/postage_meters/buyers_guide1.html. You can also submit a request for bids at this site. To do so, you will need the following information:
Volume: What is the average number of letters and packages you send per day?
Class: To what degree do you use standard mail, bulk, priority, classified, etc.
Size and Weight: What is the range of size and weights of packages?
Features: What types of postage machine equipment might you desire? Envelope sealer? The ability to print advertising on the envelopes? Manual or automatic scale?
As you negotiate, watch out for the following:
- Don’t get sold on unnecessary bells and whistles.
- Avoid signing a non-cancelable long-term lease.
- When you have a problem, how soon will help arrive and how much will it cost? If you are leasing equipment, the vendor should make sure your equipment works properly.
- When postal rates change, how and when will your scale and meter be updated and what is the cost? There is a proposed 5.4 percent across the board mailing increase expected in early 2006, so this is important.
- How much do print cartridges cost and how many impressions will you get per?
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.
This publication is intended to provide general information on the subject matters covered. It is sold and distributed with the understanding that neither the publisher nor any distributor or advertiser is engaged in providing legal, tax, insurance, investment or other professional advice. The advice of a qualified professional should be sought before any reader applies a concept presented herein to his or her particular situation or business.
D.L. Perkins, LLC is solely responsible for this content.
