Hall of Shame #5, S&H

How many times have you shopped online only to abandon your shopping cart when you see the shipping and handling charge?  I do it all the time.

When I talk to the packaging industry about changing packaging to improve postage rates, a common response I hear is, “That’s okay, the customer pays for it in shipping and handling?”  Wrong.  Here is why.

If I buy a small part like a data card for $45, I am charged $7.99 for shipping and handling.  Let’s do the math:
$0.30 for the box
$0.05 for the peanuts
$0.10 to print and apply the label
$5 for UPS shipping
Total packaging and postage is $5.45.
$7.99 – $5.45 = $2.54 profit.  Not bad.

Light box. What could it be?

Here is my data card, looking cozy on a bed of peanuts.

Now let’s make some smarter packaging choices.  Data cards are flat.  There is nothing to crush, and they are unlikely to be damaged.  If the data card were shipped in a flat paperboard mailer, the package would likely qualify as a first-class USPS flat.

Again, the math:
$0.25 for a paperboard mailer
no fill material
$0.10 to print and apply the label
$1.39 to mail a first-class flat by USPS
Total packaging and postage is $1.74
$7.99 – $1.74 = $6.25 profit.  Much better.

Better still, slash your shipping and handling, pass the savings on to your customers, and watch as your customers abandon shopping carts less frequently.

by Bob Makofsky bmakofsky@conformerinc.com

Conformer to Speak at Envelope Manufacturers Conference

The executive team here at Conformer, Marvin, Sari, and I will be participating in a presentation and panel discussion at the Envelope Manufacturers Association fall conference.  The topic of discussion is a core value of our organization — innovation.

The presentation will center on the book Blue Ocean Strategy.  The book provides a “systematic approach to making the competition irrelevant and creating uncontested market spaces.”  The Blue Ocean Strategy argues that corporations can either battle in the shark infested waters of red oceans where products and services are equal and price is the primary differentiator, or we can create blue oceans where innovation opens uncontested markets.

Product innovation is not foreign to the envelope industry, but what Blue Ocean Strategy suggests is that companies need to create dramatic changes in their product line up whereby new offerings create altogether new markets, not simply improvements on existing products.  For example, two years ago we introduced the Conformer Media Mailer, a radical shift in product packaging designed to mail CDs and DVDs at dramatically lower postage rates.  Until our innovation came along, the primary packaging available to the media fulfillment industry were ubiquitous bubble mailers and small cartons.  Our Conformer Media Mailer enables low cost envelopes to compete directly with higher cost product categories. When you factor in halving the postage rate, our Conformer solution makes our “competition irrelevant”.

We are in the process of writing our presentation for the October 29 event.  We will share it with you in the coming weeks.  To learn more about the Conformer Media Mailer, click here.

by Bob Makofsky bmakofsky@conformerinc.com

News from Postmaster General Jack Potter

Greetings from National Postal Customer Council Day, aka National PCC DAY. I attended this event in San Francisco while my colleagues Marv and Bob heard Jack Potter speak live to the NY chapter. My live televised version of this events happened to feature a close-up of Marv so I know he was paying close attention to the speech.

In past years, the Post Office has largely focused its priorities on operational issues — the roll-out of its Flat Sorting System (FSS) for example.  Conformer products have a lovely relationship with this automated processing equipment, but even so, I was excited this time when PMG Potter’s address made a distinct shift away from operations and to squarely address customer needs.  Doing business with the post office is not as easy as it could be for our customers, to paraphrase Mr. Potter, and that’s about to change.

We’ve spent enough time talking to the folks in Washington D.C. over the years to have already picked up on this sea change in attitude towards innovators like Conformer Inc. who have been working tirelessly to keep the U.S. Postal Service’s customers happy and “in the mail.”   We’ve been praised for our expertise in the USPS’s operational and pricing changes, and for our commitment to partnering with the post office to make sure that our new products are well tested and proven on USPS processing equipment and meet all requirements.  Conformer Inc. is reaping the rewards of playing by the rules and our work is being recognized as a very good thing for the U.S. Postal Service.  A happy USPS customer is a customer that stays “in the mail.”  And we all know that the USPS needs every customer it can get.

-Conformer General Sari McConnell at smcconnell@conformerinc.com

Jack Potter, Postmaster General

Uncommon Economic Indicators, Post Office Sale?

National Public Radio in NYC has been running a series recently called Uncommon Economic Indicators. Here is an unfortunate sign of the times.

The USPS is currently running a summer sale for high volume, high saturation standard mail customers.  Now, the USPS has announced discounts for First Class mail.

You can find the details here.

I wonder if the USPS will offer a BOGO on Priority Mail come winter.

by Bob Makofsky bmakofsky@conformerinc.com

Girls Gone Wild, Hot For Conformer

I was up late last night watching an exciting stage of the Tour de France when a Girls Gone Wild infomercial came on.  Suddenly, I thought (as any man would), “Wow, these girls get great postage rates thanks to Conformer.”

Whether you love or hate their product, smart distribution companies are paying less to mail DVDs than others because they’re using the Conformer Media Mailer.  As I reported in our white paper a few weeks back, the Conformer Media Mailer ships DVDs as automated flats, reducing postage costs as much as 145%.  Girls Gone Wild is now realizing postage savings of roughly $0.43 per unit shipped, based on the current postal rate increase.

OFFER: To receive a free sample of the Conformer Media Mailer, send your contact information to support@conformerinc.com with the subject line: “Media mailer sample.”

by Bob Makofsky bmakofsky@conformerinc.com

Hall of Shame #2: Why creative folks should consult with postal folks

Last night I flipped through my mail to find an “Invitation” to a special event at a fancy shoe store on Madison Ave.  Okay, my wife received it, but I opened it…

Looks like a special invitation. I feel special now...

Error #1 – The fancy 6 x 8 linen envelope weighed in at 2.1 ounces. With a slightly lighter card stock, the mail piece would have weighed less than 2 ounces, and saving $0.17 in postage.

Rigid letter sized mail = USPS parcel. $0.78 postage premium. Oops.

Error #2 – The card stock was in fact so heavy, it made the envelope rigid.  The USPS requires that mail pieces be flexible.  If not, the mail piece is classified as a parcel, no matter the size or weight.  The USPS rate for parcels is $0.78 greater than that of flats.  That hurts.

$2.00 for postage! That makes an already pricey campaign that much more expensive.

Error #3 – To make maters worse, they simply put too much postage on the envelope!  If this mailing was in fact a parcel at 2.1 ounces, the postage should have been $1.56, not $2 as posted.  The USPS certainly appreciates the $0.44 charitable contribution.

All told, the mailing is quite catchy, but the postal errors add up fast.   With a slightly lighter weight card stock, this mailing should have been sent as a 2.0 ounce letter for $0.61.  A $1.39 savings.  That’s $1390 savings for every 1000 cards sent.

And here I thought companies were trying to stretch their marketing dollars to the limit.

by Bob Makofsky bmakofsky@conformerinc.com

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.

Standard Mail Price Up 14% from 2008

New Standard Mail pricing implemented today, May 11th, 2009 show significant increases on flats, NFMs, and Parcels.  Hardest hit are customers shipping light weight packages like CDs, DVDs, and video games.

Under last years rates, shipping a 4 ounce DVD in a bubble mailer or corrugate box via standard mail would have cost $1.11.  Today that same parcel would cost $1.27.  The real shocker comes when you look back a few years.  That same package in 2006 cost $0.42.  Today’s rate is 205% higher.

There is hope however.  Conformer released the Conformer Media Mailer, capable of shipping CDs, DVDs, Blu-ray, videos, and other small light weight objects as flats.  Under new rates implemented today, a 4 ounce flat would cost $0.52, saving $0.75 per unit.  For further details, click here and here.

Rate Comparison 2006 2007 2008 2009 Standard Mail Parcel – 4 Ounces $ 0.42 $ 0.95 $ 1.11 $ 1.27 $ Increase from previous year na $ 0.53 $ 0.16 $ 0.16 % Increase from previous year na 128% 17% 14% % Increase VS. 2006 Rate na 128% 167% 205% NFM – 4 Ounces na $ 0.80 $ 0.90 $ 1.04 $ Increase from previous year na na $ 0.10 $ 0.14 % Increase from previous year na na 13% 15% % Increase VS. 2006 Rate na na na na Flat – 4 Ounces $ 0.35 $ 0.46 $ 0.47 $ 0.52 $ Increase from previous year na $ 0.11 $ 0.01 $ 0.05 % Increase from previous year na 32% 2% 10% % Increase VS. 2006 Rate na 32% 34% 48% 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

Mail DVDs, CDs, and Now Blu-ray as USPS Flat

We had reported back in April of 2008 that under USPS pricing, mailing a 4-ounce CD in a jewel case by standard mail cost $1.36 in traditional packaging. Packed in a Conformer media mailer, postage drops to $0.52 as an automated flat. You can read more about our USPS approval and product launch here – Conformer Media Mailer First to Get USPS Green Light.

Nothing beats face time. As a result of standing side by side with operations folks and packaging engineers, we have developed a series of enhancements. Our in plant process is now largely automated utilizing our Conformer Media Tray along with an Auto Poly Bagger.

But our biggest success has been our ability to simplify the solution. We are now working to redesign our trays to fit CDs, DVDs, as well as Blu-ray. With the redesign, we can use one tray size and one polybag size to streamline the process.

Conformer Media Tray

by Bob Makofsky

www.conformerinc.com

Conformer Media Mailer First to Get USPS Green Light

The Conformer Media Mailer is the first to get the USPS ‘green light’ to ship as an automated flat. It’s quite an accomplishment – given the strict requirements imposed by the postal service – and one that only Conformer Products can claim. Saving $0.84 in postage per package is virtually unheard of, and the direct mail industry is responding.

Under the upcoming rate increase, mailing a 4-ounce CD by standard mail will cost $1.36 in traditional packaging. Packed in a Conformer media mailer, postage will drop to $0.52 as an automated flat.

Last year, direct-mail marketing companies faced huge challenges, not the least of which was finding solutions to escape escalating mail costs under the new shape-based postal system enacted by the U.S. Postal Service (USPS).

Now, another price hike is slated for May 8, 2008, which will further widen the cost gap between automated mail, like letters and flats, and non-automated parcels. The latest move is intended to motivate companies to shift mailing practices toward more automation-friendly options.

It’s no surprise Conformer was the first to receive the USPS stamp of approval since the company is known for rigorous research and development to ensure products meet the demands of both customers and the postal service.

“We invested an enormous amount of time and attention to make sure these mailers would pass all kinds of tests,” said Marvin Makofsky, president of Conformer Products. “Our products work with the machinery at the post office and in just about any mailroom business environment: high-speed automation, semi-automated and manual. Absorbing the higher postage is tough enough; we didn’t want our solution to require an equipment upgrade.”

Businesses that haven’t already changed the way they send out media, like DVDs and CDs, have seen postage costs escalate more than 300%, according to Makofsky. Companies that mail large volumes of lightweight objects were among the hardest hit under the new USPS system.

According to Makofsky, “The best way for fulfillment companies to sidestep the steep cost of mailing a parcel is by moving toward automated flat packages, which can cut postage costs in half.”

Conformer Products are designed to solve problems, and the Conformer Media Mailer addresses two challenges: It allows organizations to take advantage of pricing incentives for automation-friendly mail – saving up to 62% in postal costs – and companies can continue to use equipment and processes as they did prior to shape-based postage.

About Conformer Products is a leading innovator of envelopes, mailers, presentation folders and portfolios. Founded in 1972, the company’s product line uses no more material than is absolutely necessary, dramatically reducing mailing costs under the new USPS rate restructure. By “pushing the envelope,” CEP’s award-winning products have been credited as among the biggest office product breakthroughs in decades. For more information contact us or visit www.conformerinc.com.