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Capitalizing on mailing and fulfillment

Sep 1, 2003 12:00 AM


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As printers fight for customers in a crowded market, more are turning to mailing and fulfillment as a natural extension of their services. “Five years ago the average general commercial printer would simply have passed mailing jobs over to a mailing house and not given it much thought,” observes industry consultant Clint Bolte, principal, C. Clint Bolte & Associates (Chambersburg, PA). “It wasn't a big deal. But it's a big deal today.”

In a recent “State of the Industry” study conducted by NAPL (Paramus, NJ), 70 percent of respondents indicated they were adding mailing and fulfillment services to their mix.

Bolte notes it's an appropriate time for printers to take the plunge into this area, as new technologies from the late 1990s and early 2000s have moved downstream to the core demographic within the printing industry: the small to midsize printer. “These smaller companies are the ones dealing with the real mainstream of U.S. business,” says Bolte. “The ability to deliver true big-company capabilities in this market will create a huge opportunity [for printers].” He adds that more postpress functions are being brought inline with digital printing systems, once a roadblock to establishing a mailing and fulfillment operation.

To showcase this growing market, the Graphic Arts Show Co. (GASC) (Reston, VA) has dedicated a section of Graph Expo to mailing and fulfillment exhibitors. Free seminars will also be available within the Mailing & Fulfillment Center area (see box). For more information on Graph Expo, visit graphexpo.org.

We asked Bolte to tell us more about this new service opportunity.

Why are printers suddenly paying so much attention to mailing and fulfillment services?

A number of things have changed drastically in the past five years. First of all, the U.S. Postal Service (USPS) is being seriously challenged to reduce costs. It has lost a huge part of its cash cow, First Class mail, to the Internet. The USPS has responded by automating bulk-mail handling and providing mailers with financial incentives to do a great deal of the mailing preparation prior to turning them over to the postal service, and this has worked well so far.

Now, however, the USPS has reached the point where the 80/20 rule applies, where 20 percent of the mailings are generating 80 percent of the headaches. It has responded with much more stringent and more automated ways to require compliance with its specs, including precise measurement of the exact placement of addresses, bar codes and other elements. The penalties for not complying are significant.

With distribution costs now exceeding the combined cost of design and print for many projects, losing a postal discount through noncompliance can be a budget-destroyer. As a result, extraordinary pressure is being put on the printer, and in particular on printers who deal with the vast number of midsize and small corporate clients in this country.

The emphasis on mailing and fulfillment is not just a fashionable little trend or a spur-of-the-moment thing. This is very, very important.

Why aren't mailing houses taking the lead in delivering these services?

In fact, mailing houses are being very aggressive and entrepreneurial, and many of them are even expanding into printing. This trend will be accentuated as variable-data printing (VDP) comes into its own. VDP hasn't really been accepted in the marketplace because the databases aren't there yet to support it, but that will change.

What mailing houses aren't doing, and probably can't do, is deliver all of the value-added that clients get from printers. They're not doing design or process color, for instance. General commercial printers as a rule have better, closer relationships with their clients at higher organization levels. Clients are accustomed to turning to the printer to solve a wide range of communications challenges.

In an environment in which corporate buyers clearly want to reduce the number of suppliers they use, it's much more advantageous to them to get sophisticated mailing services from printers than to expect mailing houses to meet their printing requirements as well.

Mailing and fulfillment are often spoken of as though they are the same thing. Are they?

Not at all. Even the term “fulfillment” really embraces a wide range of functions. It can include pulling products from inventory and packaging them for shipment to customers. It can also include information-based fulfillment, such as printing rebate checks and assembling bundles of coupons and other envelope stuffers.

Many of these forms of fulfillment go hand in hand with a strong mailing program, and once again the printer is the natural supplier to deliver these services. The printer can also pick and choose which services fit best with existing capabilities and client needs.

How should the printer approach the addition of a mailing operation?

Software, equipment and other elements have become so capable, and costs have come down so dramatically, that it's now possible to put together a very good program very quickly. An initial investment of $100,000 or so, coupled with the dedication of perhaps 800 to 1,500 sq. ft. of shop floor and one full-time employee, can get you up and running.

It's possible to turn mailing into a modestly profitable operation even at small volumes. We recommend the printer try to achieve about 10 cents per unit in value-add, although this dime will be subdivided across a variety of line-item charges rendered to the client. With this level of value-added, mailing 50,000 units per month — a modest operation — can generate $5,000 per month in revenue. Salary can be paid and equipment cost recovered fairly quickly at this level. But the next 50,000 units monthly will be much more profitable. At 250,000 pieces per month, mailing could easily be 10 percent to 15 percent of total business for a small to midsize commercial printer.

Are there additional payoffs?

The great underappreciated payoff of mailing is that all of these added services actually drive press cylinders. We've heard that repeatedly from printers who have expanded into mailing and fulfillment. Once the client realizes the printer can deliver such a sound, comprehensive solution to this critical need, often a 50,000 press run will become three more 30,000 runs, or a twice-a-year job turns into a monthly project.

So not only is the mailing operation profitable on its own within a reasonably short time, but it builds business for the printer's core operation as well. And, it solidifies the printer's relationship with the client as an indispensable provider of valuable services, not merely a commodity.

Mailing and fulfillment products

Vacuum transport line

Videojet Technologies' (Wood Dale, IL) Videojet Endurance vacuum transport line offers high-speed vacuum conveyance up to 700 ft. per minute. Built on a rugged frame, Videojet Endurance offers design versatility to add various material-handling modules. Standard beds are available in four-, six- and eight-ft. lengths. Symmetrical layout of the system leads to multiple configurations that are unique to each user's needs.

Mail-management software

Mail Manager 2010 mail-management software system from BCC Software (Rochester, NY) reportedly allows users to optimize postal presorts and use streamlined database-maintenance functions that help reduce mailroom production costs. Features include multithreaded background processing, address encoding, expression building, Web updates, multiprint capability, and packaging or moving lists. The software supports all Windows-compatible printers, as well as most non-Windows printers. Premium options include TaskMaster, Delivery Point Validation and Package Services.

Mid- and high-volume inserters

Inscerco Manufacturing (Crestwood, IL) introduces enhanced versions of the Mailcrafters Edge and Edge II inserters: models 9800 and 9800L, and 1200 and 1200X. The models are available with four or six insert stations, and may further be expanded using four- or six-station gripper arm trailers. The 9800 can handle inserts up to 6 × 9 inches at a ⅜-inch thickness, and envelopes from 3½ × 5½ inches to 6½ × 9½ inches. Maximum insert size on the 9800L is 6 × 11¼ inches. Envelopes on the 9800L must measure between 3½ × 7 inches and 7 × 12 inches.

The large-format 1200 and 1200X inserters use a conjugated or parallel cam index drive, and can operate in heavy-production mode, 24 hours a day, seven days a week. The 1200 accommodates inserts up to 8⅝ × 11¼ inches at a ¼-inch thickness. It can handle envelopes from 4 × 7½ inches to 9 × 12 inches. The 1200X configuration handles inserts up to 9⅝ × 13¼ inches at a ¼-inch thickness. Envelope specifications are 10 × 14 inches maximum.

Inscerco also offers the ProMailer 6.0, a new entry-level, mid-volume-production inserter. The small-footprint, floor-model machine features autoset detection on the gripper arms to ensure accurate insert pulls, PLC controls with self-diagnostic components, and sequential startup and shut-down features to facilitate use for less-experienced operators. To ensure safety, the ProMailer 6.0 requires two-hand startup.

Pressure sealer with folding capabilities

The PS800 pressure sealer from GBR Systems (Chester, CT) processes up to 40,000 8½ × 11-inch forms per hour. Modular in design with a Mathias Bäuerle CAS computer-controlled folding system, the PS800 can run as a pressure-seal unit or as a conventional folder. The system seals C-, V- and Z-folded pressure-seal stock. It features automatic fold-plate setup, 60-fold job memory for quick changeovers, and is available with a variety of feeding choices, including a pile feeder, continuous cutsheet loader or an inline cutter.

MEK-based inkjet printer

Scitex Digital Printing (Dayton, OH) offers the 7122 Dijit Liberty MEK-based inkjet printer, as well as the water-based 5000 and 6000 series. The 2⅛-inch printhead offers resolutions of 120 × 240 dpi, and operates at 500 fpm to 1,000 fpm. One-button startup reportedly allows the machine to be ready to print within five minutes. A single-vent design minimizes MEK odor; the equipment also features a dedicated waste-sump in the fluid system to facilitate collecting and measuring of unused solvent.

Multilevel fulfillment software

Integrated with the Hagen OA management-information system (MIS) or as a standalone application to complement Logic and PSI MISs, Printcafe (Pittsburgh) Fulfillment allows printers to produce, track and maintain their finished-goods inventory. The software allows users to maintain quantity pricing with up to 10 break levels; track individual and kit products, including multilevel kitting; check product availability at order entry; employ multiple ship-to locations per order; and generate pull tickets by shipping location. A browser-based catalog front-end allows clients access to inventory information, order status and job history.

Variable-data printhead

Buskro's (Pickering, Ontario) Apollo high-speed, variable-data printhead offers one-, two- or three-inch printing in a rainbow of colors. Designed as a modular, easy-to-use printer, the Apollo can print graphics, bar codes, and fixed or variable text using any True Type font, at resolutions up to 66 dpi. The system includes Buskro's Compose Windows-based software to import any database, create layouts on screen and manage print jobs in minutes.

Note applicator

Asmarc's (Troy, NY) Accufast Note System automatically applies and prints repositionable notes to a wide variety of products. At the system's core is the Accufast VL labeler and HDF heavy-duty feeder, which supply product to the Accufast P6 inkjet address printer and out onto a conveyor or the Accufast CS3D drying conveyor. These functions in combination allow the repositionable note to be applied and personalized.

The NoteSystem can also print address and postal bar codes on each piece. The indicia, other bar codes, spot messages and graphics can be printed in a single pass.

Package-production system

Ga-Vehren (St. Louis, MO), manufacturer of specialty finishing machinery for promotional print, direct-mail, media, contract and pharmaceutical packaging, is now the U.S. distributor for Pack-Smart's (Toronto) affixing, folding, packaging and inline personalization systems. One model is a 30-inch, fully servo-driven system with electronic makeready; height adjust; front, back and plow folds; document insertion and inline personalization capability.

Crocodile feeder

The Croc, a crocodile-type, easy-access exit system from Longford (Toronto), is specifically made for the company's C350, C700, GF700 and B855 friction feeders. The hinged exit system allows the top portion to be lifted at anytime to clear any jams that may occur. This minimizes feeder downtime, since jammed products can be removed quickly.

The Croc can be mounted inline with a conveyor inline, or side-mounted. It additionally can be integrated with scanners, vision systems and printers.

Horizontal wrapping system

Streamfeeder (Minneapolis) has released its QuickWrap H-50 horizontal wrapping system, a turnkey automated system designed for direct-mail and product-literature fulfillment applications. Automated with Streamfeeder's Universal friction feeders, the H-50 is said to be ideal for short-run jobs that are not cost-effective to run on large systems. Applications include magazines, mailing publications, product literature, brochures, books and catalogs.

The QuickWrap H-50 comes standard with the Universal friction feeder. It is available with multiple Universal friction feeders and an infeed conveyor for processing multiple documents.

Mailing & fulfillment sessions at Graph Expo

Check out these free sessions, which will be held at the M & F Center Theater at booth 3468.

Date Time Seminar
Sunday, Sept. 28 10 - 11 a.m. Beyond Basic Addressing
11:30 a.m. - 12:30 p.m. Kit Fulfillment and Universal Collating — Increase Profits Through Automation
1 - 2 p.m. Everything You Always Wanted to Know About Mailing Software (But Were Afraid to Ask)
2:30 - 3:30 p.m. Re-engineering Print-Ready Documents for Efficient Mailings
Monday, Sept. 29 10 - 11 a.m. Bringing Addressing to Your Print Shop
11:30 a.m. - 12:30 p.m. Getting Started in Mailing
1 - 2 p.m. Improved Profitability Through Systems Integration
2:30 - 3:30 p.m. Postal Sealing — Wafer vs. Glue
Tuesday, Sept. 30 10 - 11 a.m. Selecting the Inkjet Printer That's Right for You
11:30 a.m. - 12:30 p.m. Repositionable Notes — The Greatest Thing to Hit Direct Mail Since the Stamp
1 - 2 p.m. Creating Enterprise Value with Intelligent Mail

Fulfillment resource

Industry consultant Clint Bolte is the author of “How Fulfillment Services Drive Print Volume,”published by NAPL. To order, call (800) 642-6275.