Mail Call

This story appears in the February 1997 issue of Entrepreneur. Subscribe »

Mail is one of the lifelines of a business, but if you're still licking and sticking envelopes and stamps, spending precious time at the post office to reset your postage meter, and struggling with skyrocketing costs, it's time to invest in one of the laBODY electronic mailing machines that can save you time and money.

These electronic mailing machines consist of a base through which envelopes are guided for stamping, which can be rented, leased, or bought from a mailing equipment manufacturer, and a meter which must be rented from the United States Postal Service (USPS). The more automated and faster the machine, and the more features it incorporates, the more it costs to rent, lease or own.

Before you rush out to shop, however, there are two new government regulations you should know about: reclassification and decertification.

The USPS recently introduced Classification Reform, a new concept that mutually benefits the Postal
Service and its customers. Reclassification changes the rates of postal discounts to various customers, depending on how intricate your automation is. If your mail is bar-coded, metered with an "indicia" (the red stamp imprinted by the meter's tiny printer), or sorted and bundled in quantities, you probably qualify for significant discounts.

Under decertification, the USPS is calling in all its mechanical meters, declaring them obsolete by 1999, and requiring electronic metering. If you use a mechanical postage meter system with a meter and a mailing machine base, you must return it to the post office by December 1997.

While decertification necessitates re-evaluating your mailing equipment, there is a huge plus: Electronic postage meters can be reset either with a phone call or via computer instead of visiting the post office. Mailing equipment manufacturers offer this service free or for a nominal fee.

Even the smallest office can benefit from a meter to determine exact postage and print out a stamp, and a scale to weigh mail. The USPS estimates accurate weighing can save customers up to 20 percent on mailings.

An efficient, automated mailing machine can also save hours of time if you handle direct mail or large mailings. Mail that's presorted and bar-coded bypasses many of the post office handling steps and is delivered 24 hours sooner than mail lacking automated preparation, according to the USPS. (And if you don't think a day makes a difference, consider the results of a study by market research firm The Gallup Organization Inc. and mailing equipment manufacturer Pitney Bowes Mailing Systems. Their study found that 11 percent of executives surveyed at large and midsized companies said the net income of their businesses would jump 5 percent if they received payments one day sooner!)

If you're not familiar with the new regulations and postal rates, a call to a mailing equipment manufacturer or distributor (look in the Business-to-Business Yellow Pages under "Mailing Equipment") or a post office can set you straight and give you some money-saving tips.

"We hold regular seminars for our salespeople and customers so they can keep up to date on the laBODY government edicts and plan for future needs and budgeting," says Ed Lomasney, a Fountain Valley, California, sales manager for Hayward, California-based Neopost, one of the four leading national mailing equipment manufacturers. The other three mailing equipment manufacturers are Pitney Bowes, which has an 85 percent share of the market; Ascom Hasler; and Francotyp-Postalia. All design and develop a variety of machines and add-on modules for various-sized businesses.

A few smaller companies sell machines that prepare your documents for mailing, such as inserters for putting letters into envelopes, extractors for removing mail from envelopes, and bursters for stripping the sides off tractor-feed computer paper forms. The four major manufacturers offer full lines of equipment.

All In One

The laBODY mailing systems are multifunctional, handling everything from printing, folding, stapling, inserting, sealing, labeling, weighing and stamping to sorting, stacking and putting on a wrapper or binder. Many interact with a computer so you can track exactly how, when and to whom orders are sent out. Some PC-based systems can be programmed to simultaneously handle different sized paper--checks, invoices, brochures--without stopping the machine to reset the equipment.

Besides postage meters, the second crucial piece of mailing equipment most businesses need is a postal scale. Scales are sold in 5-, 10-, 30-, 100- and 200-pound capacities and can be purchased as stand-alone units or combined with a postage meter. Most electronic scales digitally display the weight of your mail piece and the postage needed. Some scales allow users to comparison shop for postal rates.

The most popular mailing equipment combines meters with electronic scales; other machines have additional capabilities such as automatic feed and envelope-sealing functions. Speeds can vary from 25 to 200 envelopes a minute.

Besides faster delivery time and the ease of resetting by telephone or computer, metered mail machines offer other benefits:

*Postal accounting. Tracking and controlling money spent on direct mail, letters, parcel post, priority and express mail is easier. Because there is one dispenser with precise postage, accounting is streamlined and you know exactly how much postage remains in the meter.

*Parcel post dating. If your third-class letters and packages are metered, the stamp date requires the post office to expedite those items on the date received, thereby providing better service on less expensive classes of mail.

*Postmark ads. Postage meters not only print stamps on your mail, they can print an advertising message, too. Postmark ads can include your company logo and name, giving your company extra advertising exposure. Pitney Bowes' PostPerfect Mailer, for example, has an ad cartridge that stores four different messages.

Know Your Options

Mailing equipment can either be rented, leased or purchased outright. You may prefer to lease to con-
serve working capital, then upgrade equipment as your business grows. Renting is the easiest method because if you need to cut costs at any time, you simply hand the equipment back and walk away. If you are leasing, you are obligated to make all the payments specified in the lease. However, leasing offers advantages including lower rates than renting and the ability to roll the lease over for upgraded equipment.

If a mailing equipment salesperson sells you on leased equipment that ends up being too sophisticated for your needs, some suppliers will purchase the competitor's lease and put in their own equipment. When shopping around for equipment, ask if there are any special promotions available before you sign.

Basic machines lease from about $25 to $35 per month; more sophisticated machines for $60 and up. Anything more expensive than that is usually best suited to large corporations. The average lease is for five years and can include maintenance and free postage refills; the average rental agreement is for one year.

Carefully read the contracts you are offered, and, if renting, make sure there is no mention of the word "lease." Also, always ask what options you have if you need to get out of a lease.

Make sure the company is postal-certified with the USPS. Salespeople should be knowledgeable about their industry, the laBODY USPS regulations and rates, and ask you questions about your mailing process--how many boxes, how frequently you ship--so the equipment they recommend fits both your business and your budget.

When shopping for mailing equipment, allow the salespeople enough time to make their pitch. The right mailing equipment can save you money, but only if you give the salesperson enough time to analyze your needs.

Jill Amadio is a writer in Newport Beach, California.

Scales

Ascom Hasler Mailing Systems

Smart Series Scales, (800) 243-6275

Weight Limit: 10-30 pounds

Volume: Light to medium

Display: Backlit LCD graphics with glare-adjustment and two alphanumeric lines

Features: Electronic, adjustable audio signal confirms keystrokes, programmable memory key, optional accounting function for separate accounts, interfaces with PC, data storage.

Price: $995-$3,495; monthly leases start at $31

Ascom Hasler Mailing Systems MP10, (800) 243-6275

Weight Limit: 10 pounds

Volume: Light to medium

Display: Digital, two lines

Features: Electronic, portable, compact, postal rate comparison-shopping feature, automatically converts ZIP code to postal zone.

Price: $695; monthly leases start at $21

Neopost SE Series Rate Calculating Scales, (800) 624-7892

Weight Limit: 5-100 pounds

Volume: Light to medium

Display: Illuminated, one alphanumeric line

Features: Electronic, upgradable in weight capacity, all carrier rates display,
4 programmable option keys.

Price: $595-$1,595; monthly leases start at $15-$41