Mailing Services -- Check's in the Mail(ing)

It's surprising, sometimes, how misleading a simple piece of punctuation can be.

Consider the ampersand that's so routinely tossed in between the words "mailing" and "fulfillment." One might almost think the two specialties went together like Ham and Eggs.

In fact, mailing and fulfillment are dramatically different propositions, and printers considering diversifying into mailing services need to keep the distinction clearly in mind. This September's PRINT 05 & CONVERTING 05 aims to support these diversification strategies with a special exhibit section whose title uses the ampersand, but whose content will highlight the diverse demands of the two fields. (See sidebar.)

The striking growth of this section—from 1,500 square feet just two years ago to more than 33,000 square feet in 2005—reflects how enthusiastically printers have been moving into the mailing and/or fulfillment businesses recently.

Partly, this surge is driven by a desire to avoid driving a job through prepress and production at warp speed only to have it languish on the loading dock waiting for the mailing house to pick it up...or sitting at the mailer's in a queue.

With about half of all printed matter being distributed by mail, getting jobs into the hands of the ultimate customers has often meant that the printer, like it or not, was being held responsible for the performance of the mailing house.

"We got into the business because our competitors were not doing a very good job," reveals Tonya Spiers, vice president of sales at Knight Abbey Printing & Direct Mail in Biloxi, MS. "Our customers came to us and said, 'you could do this.' It has opened up a lot of doors for us."

Spiers says the mailing business at Knight Abbey has gone from $4 million to $8 million annually in the past five years.

At CRW Graphics, in Pennsauken, NJ, President Mark Weiss reports that his company moved into the mailing business about six years ago with "a very, very small capital investment." It was such a small investment, in fact, that some clients were reluctant to give the printer mailing work, thinking it was under-equipped.

But beginning with smaller jobs, CRW soon proved itself. "Within the first year, up to 30 percent of the jobs running across our presses were also going through our mail shop, and it has done nothing but grow since then," Weiss says. He adds that CRW's interest in variable data digital printing naturally reinforced the move into mailing. "One of the reasons for us to get into mailing was to learn how to manage variable data," he reports.

So much of the work involved in variable data output involved addressing and working with customer databases that it made no sense for customers to split the job among vendors, according to Weiss. "If we were going to image something digitally, we might as well mail it," he explains.

As Weiss' experience indicates, moving into mailing services isn't that big a jump for most printers. "Mailing is fairly simple to get into, with simple software," agrees Frank McPherson, president of Custom Data Imaging in Markham, Ontario. His company made the move about six years ago and did $60,000 in business the first year. That volume is now approaching $400,000 per year. It's vital, though, to invest the time in learning some fundamentals.

"The first thing you need to have is a person willing to learn the postal regulations," advises Emile Vaughan, president of Davis Printing in Montgomery, AL. "Then, spend a few thousand dollars on some basic mailing equipment and you're in the mailing business."

Fundamental knowledge can also help printers meet one of the customer's main beefs about mailing—its high cost. Printers, in fact, are in an ideal position to help them save money and avoid mistakes.

"We've saved clients some serious money on postage," says Weiss. "We have a big advantage over mail shops. At a mail shop, whatever the printer produces, they have to mail." In contrast, printers get to see jobs far upstream, where small design changes or error detection can have a huge impact.

Making Things Right

Weiss tells of one client who was inadvertently mailing his pieces upside down, so that the return addresses couldn't be read by the USPS' automated systems. A third or more of every mailing was vanishing without a trace. Simply by knowing the regulations and examining a job early, CRW helped the buyer cut both postal and production costs and get more pieces into its customers' hands more quickly.

Spiers agrees, noting that Knight Abbey takes every piece to the postmaster at the very beginning of production. "There are so many things people design wrong," she says. In addition, the shop has produced a "cheat sheet of common problems" that's given to customers. "We have the post office people come in annually," Spiers says, "even if they're reviewing the same information every year."

What does it take to get into mailing?

Consultant Clint Bolte says a startup package can be less than $40,000 to twice that amount for mailing list maintenance software, equipment to ink-jet addresses, and equipment for inserting and tabbing. "The lower value is for slower, tabletop units that are intended for shorter run quantities. Many in-house mailing enterprises have found these to be quite satisfactory. Most printers will prefer more heavy-duty, standalone equipment that operates at higher, more sustained rates. That's where the higher investment figures come in," according to Bolte.

To this hardware investment, Bolte suggests another $5,000 could be spent on mail processing software and perhaps $20,000 on programs to compile business data and costing information for a mailing operation. Higher budgets might be necessary if the printer wants to integrate the mailing operations with an enterprise-wide MIS network.

Low entry costs, the opportunity to cut time and expense out of marketing programs, and the chance to get a firmer grasp of more of the customer's business all argue for mailing as a logical diversification path for printers. Fulfillment services can be a different animal, however.

For a printer, direct mail is low-hanging fruit, contends Al Kennickell of Kennickell Print, Direct Mail and Fulfillment in Savannah, GA. "If you're printing something anyway, the client is likely to say go ahead and mail it. Fulfillment is more difficult. It's easy to make mistakes in that business."

Fulfillment can be as simple as responding to Web-generated requests for brochures and other print materials. Or, the printer may find itself warehousing many thousands of dollars worth of merchandise, and responsible for a precise accounting of every unit. Such an operation may require additional insurance, video surveillance, closer staff screening, restricted facility access and other measures that will be new to most print managers.

"In mailing, the key is data, data, data," says McPherson. "In fulfillment, it's organize, organize, organize. It's a lot harder and riskier. I've been arguing for years that these are two different things."

CRW Graphics has built up both a fulfillment business and a mailing specialty, and Weiss notes some critical differences. "As a printer you really need to know how much of everybody's materials you've got, and you have to go periodically and physically check it, and keep track of what's becoming obsolete."

McPherson also says printers must maintain tight inventory control right from the beginning of a fulfillment job. "You have to hand count material as you receive it and, if it's short, you have to report that at once," he explains. Otherwise, the printer may find itself liable for any inventory that "shrinks" in the course of distribution.

One speaker at the recent VUE/Point Conference in Florida related a story of a print shop assigned to package and distribute $5,000 worth of gourmet brownies during a night shift. The shift supervisor casually commented that there would probably be some extra brownies when the job was done. Anyone who knows human nature won't be surprised learning that the printer ended up buying thousands of dollars worth of brownies to complete the job.

That kind of exposure won't appeal to everyone, yet many printers are in fact building thriving businesses in both print and merchandise fulfillment.

Spotlight on An Emerging Specialty

Two years ago, the Graphic Arts Show Co. (GASC) launched a special exhibit section at its annual GRAPH EXPO and CONVERTING EXPO trade show devoted to mailing and fulfillment technologies. That pavilion offered about 1,500 square feet of displays, mostly modest presentations.

This year, the Mailing & Fulfillment Center at PRINT 05 & CONVERTING 05 will be larger than the mailing industry's annual dedicated trade show. That's clear proof of the importance printers and package printing specialists attach to postal issues.

Some 70,000 people are expected to gather in Chicago from September 9-15 for the latest edition of the international exhibition, which is staged every four years. More than 800 companies will exhibit, filling about 750,000 net square feet (nearly 20 acres) of booth space.

The Mailing & Fulfillment Center will be located in the giant South Hall of the McCormick Place complex, sharing space with the year's most complete exhibition of printing, finishing and converting systems.

The 33,000+-square-foot pavilion area will include a "Mailing & Fulfillment Theater" in which free technical and business presentations will be offered throughout the show days. In addition, several sessions of the show's seminar program will address the specialty, including:

* How Fulfillment Services Drive Print Volume

* VDP Mailing Issues and How to Deal With Them

* Database Basics for Printers

* Value-Added Mailing 101

Among the exhibitors scheduled to mount major displays at the show are Bowe Bell & Howell, Buhrs, FASTechnology Group, GBR Systems, Kepes, Kern International, Kodak Versamark, Pitney-Bowes, Sitma USA and many others.

Online registration for PRINT 05 & CONVERTING 05 is now available at www.print05.com, along with hotel bookings and complete information about the show. GASC suggests that hotel reservations, in particular, should be made as early as possible, since accommodations typically become very scarce in downtown Chicago as the show approaches.