• by Tom Siebert , September 19, 2006

With a proposed price increase for postal service looming next spring, one savvy company has devised a way to take advantage of the U.S. Postal Service's complex pricing structure to save direct-marketers money.

The latest intended price increase is markedly different from last January's across-the-board 5.4 percent bump. For the first time, the USPS' price structure will rely on shape as well as rate. In other words, the proposed increase includes costing incentives that the Postal Service hopes will encourage mailing efficiency. That's important for direct marketers, since direct mail is the No. 1 ad medium, per the latest Veronis Suhler Stevenson report.

Under the new system, flats and parcels face higher increases due to higher handling costs. Currently, consumers can mail a three-ounce letter, flat or parcel for $0.87. The new, shape-based rates will lower mailing costs for the same three-ounce letter to $0.82. However, postage rates for the three-ounce flat will increase to $1.02, and the rate for the three-ounce parcel will jump 61 percent to $1.40.

"The proposed pricing structure encourages the use of flat and letter mailings whenever possible to take advantage of automated processing," says Marvin Makofsky, president of Conformer Expansion Products, a Great Neck, NY company that has a patented line of envelopes that do just that. "Organizations that rely heavily on mass mailings can save thousands of dollars by converting flat mailings to letter mailings and parcel mailings to flat mailings."

DVDs, for instance, typically ship in padded mailers as parcels. Products like the Conformer Expansion Envelope enable the post office to process DVDs as flats.