Distributors can still find success with mailers despite the technology and competition that's eating into the business.
With more than 20 years of experience in the mailer business, Tim Goodwin, president of Goodwin Graphics, Carrollton, Texas, knows a thing or two about the sale of mailers. He can spout price quotes off the top of his head and discuss design elements like he's reciting the alphabet.
He can also give you a good history of how successful mailers have been. And, according to him, they are still fairly successful, except for one little thing—e-commerce. "If one were to go back 10 years and try to get an invoice in the mail efficiently, he would find that the mailer was the perfect fit," he said. "But the story today is a bit different. Nowadays people are sending e-file invoices as a fulfillment service, or they fax the invoices—a not-so-friendly service forcing invoice recipients to pay for the fax paper on which they print."
"All of this," he continued, " is eating into the mailer business."
To overcome this dilemma, Goodwin Graphics has ventured into pressure seal mailers, which can be used for applications such as invoices and report cards.
Distributors wishing to sell the mailers can probably find success through municipalities, utility companies and electric co-ops which, he added, "are printing a lot of past-due notices as opposed to regular invoices these days."
Another optimum target for mailer sales is hospitals, which buy about 75 percent of Goodwin's stock mailers.
Under Pressure
For the past five years, Goodwin has been trying to build up the pressure-sealed mailer market, but said, "It is so erratic and so many people are getting into it that it has almost become a commodity product."
In fact, Goodwin has noticed that with the increased competition, some manufacturers are price cutting, possibly as a way to service company debt.
He explained that manufacturers typically have to run mailers using carbonizing bond paper, which only two mills produce. "We've checked the prices for them and we are buying from the same people and paying the same amounts for base materials as other manufacturers, but somehow other manufacturers are selling mailers a lot cheaper—sometimes several thousands of dollars below my cost," he said. "They are either buying materials extremely cheap, their labor costs are extremely low or, as I stated before, they are trying to get work to service debt."
Some of the competition has been a direct result of newcomers to the mailer industry who were able to jump in after the 2001 closing of Transkrit, Roanoke, Va. Transkit, a manufacturer with a specialty products portfolio including custom and stock mailers, sold its mailer equipment to several other manufacturers.
Atlanta-based PRINTSouth is one of the manufacturers that benefited from Transkrit's demise. According to Mark Clabaugh, vice president of sales and marketing, "Since the closing of Transkrit we have developed several new and very valuable distributor customers and, as a result, we are producing more mailers."
Some of the end-users PRINTSouth's distributors service with mailers include hotels, universities, fund-raiser associations, manufacturing companies, state government agencies, utility companies, magazines, medical labs, doctors and hospitals and fuel oil companies.
Applications for mailers consist of everything from reservation confirmations and class schedules to pledge requests, vehicle renewal notices, tax liens, shut-off notices, subscription renewals and fuel meter tickets.
What has added to PRINTSouth's mailer success is its equipment. "Many large manufacturers who have been producing mailers for 30 years or more, have developed means of retooling existing presses and collators to produce these products," Clabaugh said.
"Simply stated, it incorporates cross-web gluing and a means of reducing glue build-up and tenting. Those would include intermittent gluing, knurled wheels, and colorful inserts as invoice stuffers."
Addressing the cost issue of this product, Clabaugh said, "There are too many variables to determine that, but this is definitely a value-added product, and an opportunity for the alert distributor to add to his customer base."
As far as how well mailers fit into most customers' budgets, Clabaugh reported that the money for mailers is either in their budgets specifically, or is being buried in conventional forms, and in the wages for employees to print, fold, insert and mail them—a very time-consuming monthly task.
Goodwin, on the other hand, said that as of a few years ago one could put together a six-part mailer with a return envelope for 8 to 11 cents each. "All in all, if one were to do a long-run, sort zip codes and get postage discounts, he could do a complete mail piece for about 28 cents," he said.
Offering advice to distributors with clients deciding between mailers and conventional products Clabaugh suggested asking specific questions. "When comparing mailers to conventional products, insertion methods and solutions to cash flow problems, look at all the individual components," he said. "What do they cost to buy? What do they cost to complete, to fold and insert? To insert a reply envelope? You do supply a return envelope, don't you?"
When all is said and done, manufacturers indicated that mailers are still a strong product. It just may take a little effort on the distributor's end to keep them going. "Distributors need to ask manufacturers for samples," advised Clabaugh. "There is no more effective way to create interest than to show a sample of what similar businesses are using. After all, why reinvent the wheel?"
By Sharon R. Cole