White Paper: Infinity Resources Cuts DVD Postage 145%

Easing Postage Pressures

How to Get in Shape and Optimize Savings

Executive Summary

●      After the U.S. Postal Service (USPS) restructured rates in May 2007, Chicago fulfillment company Infinity Resources, Inc. saw its postage costs increase 166% for media mailed in jewel cases, Amaray cases and Digipaks.

●      The Conformer Media Mailer, the only known solution capable of mailing these items as automated flats, reduces postage costs as much as 145%.

●      Combined with the Tension AutoPack solution, the patented system allows businesses to realize greater savings through improved labor productivity.

●      Infinity adopted this joint solution and is realizing postage savings of $0.43 per unit shipped, based on the May 2009 postal rate increase.

●      The Tension-Conformer solution is a viable alternative for companies mailing 10,000 units or more per year.

First Class Mail Holds Steady

My quick analysis below shows that the Postal Regulatory Commission has held steady to their word of increasing postage rates in line with the Consumer Price Index.  Rates for 2009, implemented today show a 3% increase over 2008.

Interesting to note the rate of change vs. 2006 rates.  Due to the implementation of shape based postage in 2007, parcel rates have jumped 56%.

More than ever before, increasing postal rates mean companies should take a close look at their packaging choices.   Designing packaging to downgrade from parcels to flats saves money.  Starting today, a 4 ounce parcel costs $1.73.  Reconfigured as a flat the rate is $1.39, saving  $0.34.

Rate Comparison	2006	2007	2008	2009
First Class Mail
Parcel – 4 Ounces	$ 1.11	$ 1.64	$ 1.68	$ 1.73
$ Increase from previous year	na	$ 0.53	$ 0.04	$ 0.05
% Increase from previous year	na	48%	2%	3%
% Increase VS. 2006 Rate	na	48%	51%	56%
Flat – 4 Ounces	$ 1.11	$ 1.31	$ 1.34	$ 1.39
$ Increase from previous year	na	$ 0.20	$ 0.03	$ 0.05
% Increase from previous year	na	18%	2%	4%
% Increase VS. 2006 Rate	na	18%	21%	25%

The above table is an excerpt from a broad analysis of the rate increases.  For a full report, send me an email.

by Bob Makofsky bmakofsky@conformerinc.com

Rate Increases Target Small Parcel Shippers

This past week, Patrick Barnard wrote an interesting piece in Multichannel Merchant about how small parcel shippers are taking the brunt of USPS price increases. The USPS introduced shaped based postage back in May of 2007. In May of 2008, the post office increased prices again with another dramatic increase for parcel shippers. Once again, the May 2009 price increases target companies mailing small, light weight packages. Standard mail parcels will increase roughly 16%. When will the rates stabilize for small parcel shippers? Good question.

Coming off a dismal first quarterly (Oct – Dec) earnings report where losses exceeded $380 million, should the USPS focus on maintaining revenue or maintaining mail volume, or is there a balance?

by Bob Makofsky

www.conformerinc.com