Bulk mail regulations to change on July 1 New rules may cost small businesses more

June 23, 1996|By KANSAS CITY STAR

Once again, says Marcus Smith, publisher of Postal World, the U.S. Postal Service is holding out a helping hand to big business while slapping small business with the other.

It all has to do with new postal regulations that take effect July 1 to make bulk mailings more efficient. Although it takes an almost-200-page tome to detail the changes, the bottom line is that mailers that can jump through the new hoops will likely get better rates. And smaller companies that can't clear those hurdles will probably pay more.

"Smaller businesses have effectively been shut out," said Smith, whose publication tracks postal changes. "It's the old 80/20 principle -- make it easy for the 20 percent of companies that give you 80 percent of your business."

Despite such protests, the controversy seems to have caused barely a blip on the small-business radar screen.

Officials contacted at the Small Business Administration in Washington and Kansas City were only vaguely aware of the issue. Ditto for the Federation of Independent Business.

Changes coming

That may be because the Postal Service has at times been lackadaisical about enforcing rule changes, critics say.

In any case, the changes are coming. Many of them have to do with the accuracy of mailing lists, presorting, and putting 11-digit bar codes on mailings. The 11-digit bar code is an electronic version of the printed address.

Currently, only 85 percent of a bulk mailing needs to have the 11-digit bar codes to qualify for the best bulk rate. After July 1, that requirement jumps to 100 percent.

Also, new rules will require that addresses be updated and certified as accurate every six months. And while it now takes only 10 pieces in a single ZIP code to qualify for the best automated rates, that bar increases 15-fold to 150 pieces as of July 1.

These changes can cost more money for a small business, and may push many businesses that now handle their own mailings to mailing houses -- companies that handle bulk mailings for other companies.

That was the avenue traveled several years ago by Brenda Youness, owner of Heart's Designs.

The Kansas City children's apparel manufacturer and retailer sends about 100,000 pieces of mail each year, including catalogs.

"If you make one little mistake in your bulk mailings, the post office sends the whole thing back," Youness said. "You just can't keep up with all the changes and how they impact you."

Same for the upscale Kansas City retailer Halls, which has been outsourcing mailing duties for a number of years.

Debbie Robinson, direct mail manager for Halls, estimated per-piece costs will go up by about 3 cents. For Halls, that might mean about $10,000 more in mailing costs a year.

Mailing smarter

"We do everything we can to take advantage of discounts," Robinson said. "It's our mailing houses that help us identify the ways to do that."

John Miller, the owner of one such firm, Quality Mail Marketing Inc., said that although figuring out the details of the coming changes has been tedious and time consuming, in the end it will cause everyone to mail smarter.

"Sometimes it's hard to see," Miller said, "but this really is beneficial."

Meanwhile, the Postal Service promises patience during the learning curve.

"Change comes hard," said Barry Evans, business mail entry analyst at the Main Post Office in Kansas City. "The bottom line is when everybody gets up to speed, what everyone benefits from is more efficient mail service."

Evans concedes some smaller companies will end up paying more. "But there are things they can do to keep their costs down," he added.

Evans said that for the Postal Service to be what it should be -- an inexpensive and fast way to send information -- it must make changes.

"For us to be a viable company, it is really about efficiency," Evans said. "Keeping costs down and utilizing automated equipment is what will help us get there."

Pub Date: 6/23/96

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