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Piece Together a Direct Mail Campaign

Step 4: Mail the Mailer

With drop shipping, distributors and printers can help customers reduce their mailing costs and create a potential revenue stream for themselves. To use drop shipping successfully, it helps to understand how both the U.S. Postal Service and the trucking industry work.

Delivering mail is a complex process. The U.S. Postal Service operates 21 bulk mailing centers (BMC) that sort and prepare mail for shipping throughout the country. The mail is processed further at regional sectional center facilities (SCF) and then distributed to local post offices, called direct delivery units (DDUs), where it’s sorted by carrier routes.

The USPS offers discounts to mailers who presort their mail ahead of time and deliver it to the BMC or SCF closest to its final destination. In other words, printers and mail houses do some of the USPS’ work for it and share in the savings. “If you have mail that goes to California, and you drop it in Maryland, they’ll charge you 21 cents. If you ship it to California, they’ll charge you 18 cents,” says John Kennedy, president, Direct Mail Logistics, Baltimore.

However, the discounts offered by the USPS are fixed at a certain point. “The post office gives you a flat rate discount. It’s X dollars per thousand. It doesn’t matter if it’s from Maryland to Philadelphia or Maryland to Seattle,” Kennedy says. On the other hand, shipping costs will vary. The trucking industry’s goal is to fill the truck, so it may offer what seem like inexpensive shipping rates, but your mail might sit in a warehouse for weeks until the truck is filled with orders. On the other hand, trucks will ship less-than-full-loads (LTL) quicker, but the rates will go up. “There is a world of difference between an LTL and mail consolidation. True mail consolidators aggregate mail to achieve the lowest possible transit cost. The trade off is time: Mail can sit at multiple facilities for days (or weeks) until the consolidator has enough matching mail to warrant moving to the next point. With LTL drop-shipping, your mail moves directly through a delivery network, saving time and wear-and-tear on the mail, while still creating positive net savings,” says Kevin Lynam, vice president of business integration, Direct Logistics, DFW Airport, Texas.

In the end, it only makes sense to drop ship if the cost to truck the mail is less than the savings realized from the USPS discounts. The difference is potential profit for printers and distributors.

Drop shipping can be a hassle logistically, particularly when negotiating with trucking companies. A number of third-party providers such as Direct Logistics and Direct Mail Logistics exist as a result. They work with printers, distributors and mail houses to facilitate drop shipping. Under the right circumstances, the savings realized are still great enough that everyone makes money and the end user is happy.

Evaluating a third-party provider means doing some research. One thing to look out for is how they deal with the trucking industry. Typically, asset-based companies that own their own trucks are less flexible than providers that have an established network of shipping partners. Distributors and printers should also look at when the shipment will be made. “Two important items to consider when looking at quotes and the bottom line are transit days and fuel costs,” says Mack Kelsey, executive vice president of sales at Direct Logistics. “If the transits aren’t listed on your quote, ask for a list of destination service standards from your provider. Transit days are a critical component when in-home date planning for a mailing promotion.” Also beware of how the provider addresses fuel charges. “They’re generally listed in the fine print at the bottom of the quote and expressed as a percentage, but not always,” Kelsey says. “Surprises at the point the invoice is received can be avoided and profit margin protected if you know the fuel costs on the front end.

—Andy Brown