Live from NEMOA: Catalogers Need to Pass Costs on to Consumers

Mar 24, 2007 1:27 AM  By

Cambridge, MA—Attendees here at the spring NEMOA conference have discussed such tactics as improving list hygiene, reducing circulation and trim size, and comailing as ways to minimize the effect of the May 14 postal rate hike. But Michael Grant, managing director of New York-based consultancy Winterberry Group, noted that no one has brought up—at least publicly—passing the costs on to the consumer.

“It may not have entered their consciousness level yet, but I think that it’s something catalogers will need to do,” Grant said. “They can absorb [a] 5%-10% [increase] because that’s the increase they’d expected, but they need to figure out how to absorb the rest of it.”

Grant said an increase in price points may be one way to help cover costs, and increasing shipping and handling charges may be another.

“I believe that every avenue for cost savings needs to be investigated. You need to take every line on your profit-and-loss statement and go through it and see where there are opportunities,” Grant said between sessions on Friday. “One of the things that does not appear on the P&L is passing the increase on to the consumer or the purchaser, and I think that’s one of the key things.”

Grant did add that there are some small, quick fixes for catalogers, beyond decreasing page counts and indiscriminately slashing circ. “I think you need to do some basic blocking and tackling,” he said. “You should be mailing to an optimized circulation to take advantage of carrier rate discounts, for example.”