Top 10 Questions to Ask Your Mailing Equipment Vendor

My firm manages over 50,000 pieces of mailing equipment for the largest companies in the US. What is always surprising when we take on new clients is the lack of information they have about their mailing spends. This lack of information can lead to bad decisions and higher prices. We want to arm you with the tools to know what to look for, and what questions to ask, to reduce costs. Here are the 10 essential questions you should ask your mailing equipment vendors to manage this category more effectively and save money:

1. When does my lease expire?

We estimate that 80-90% of all mailing equipment (excluding the smallest postage meters) is leased. The typical terms range from 3 to 5.5 years. You might try to dig up your original contract and assume you can calculate the end date based on when you signed the agreement, but this is often not the case. There could have been time remaining on your old lease or other processing delays that altered the start date. Knowing the end-of-lease date is crucial because most agreements have evergreen clauses that extend the lease by one year or more if you don’t notify the company of changes 90 days prior to the end of the term. To complicate things further, the end-of-lease date is typically not visible on your invoices.

2. What are my current costs?

Mailing equipment costs are broken down into various categories that must all be considered:

• Lease
• Meter Rental
• Maintenance
• Scale Rate Changes

All of these costs may be included in your equipment lease, but you should verify this in case you are receiving separate bills for these services. If you have other equipment from your vendor such as folder inserters, letter openers, envelope printers, or tracking systems, ensure you get these costs quantified as well.

3. How much postage have we run over the last year?

Your mailing vendor should provide details on the amount of postage added to your mailing equipment. We often find that the cost of the equipment is frequently out of proportion to the postage used. You should never be paying more than half as much for the equipment as the postage being used. For medium to larger mailing systems, this should be less than one quarter.

4. Can you explain the fees we are paying on our bills and how we can avoid these in the future?

This industry has many fees that most customers do not fully understand. Validate if you are paying any of these common fees and ask for advice on how to eliminate them in the future.

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5. How do we get access to our data? (Inventory, Invoices, Postage Activity)

Your mailing equipment account manager should be able to provide some of this data. However, the real question is whether you can get set up to access this information on the vendor's website. Find out if they can set this up for you or at least provide you with core data (Account Numbers, model and serial numbers) and instructions to get started. Most vendors offer robust online tools that allow you to see:

• Inventory - Listing of equipment with models, serial numbers, descriptions, and installation dates.
• Invoices - Lease, meter, maintenance, and supply invoices.
• Postage activity - Refill dates and amounts with associated meter and account numbers.

6. What equipment models do you have that fit our application?

On average, we save our clients 63% by ensuring they choose the right equipment levels. It's important to get at least 2-3 machine choices from your mailing vendor and push them to explain the differences. There is very little information available outside the vendor's websites on the cost and volume capabilities of this equipment. Ensure you have as many options as possible to make the best decision.

7. What is included in the new agreement?

When acquiring new equipment, confirm that the following items are included or that the pricing is itemized to understand the charges:

• Leases - We recommend all-inclusive agreements that include equipment, meter rental, meter resets, postage advances, maintenance, and scale rate changes.
• Purchases and Rentals - Confirm the amounts for all these items mentioned above with leases, as most will be charged individually.

8. Which items on the equipment description are chargeable?

Mailing equipment lease agreements often list multiple line items that collectively make up the mailing system. The issue is that the price of each line isn’t broken out, leaving you uncertain which items are chargeable or included. Validate each line item with the vendor to understand what it is, its incremental cost, and whether it's necessary. This can help reduce agreement costs.

9. Can you provide purchase prices and 2-3 lease terms?

Most mailing equipment transactions are renewals of current agreements. Vendors may try to renew your current or new equipment on similar terms. We recommend doing a cost comparison between leasing and purchasing and looking at 2-3 lease terms. Ask your vendor to provide purchase pricing as well as 36, 48, and 60-month lease terms so you can make the best decision.

10. What can we do to get the price reduced?

It never hurts to ask how to get lower pricing. Consider asking your vendor:

• Are there any special programs running?
• Do you have any remanufactured or demo versions?
• What if we waited until the end of the month or quarter?
• Are you adding any remaining balance from our current agreement, and what would be the cost if we waited until the end of our current lease to renew?
• What if we had a quote from another vendor?
• What would be the cost if we kept what we have today?
• Can we set up national pricing that includes multiple sites?

By asking these questions, you can ensure you are maximizing your relationship with your mailing equipment vendor. With this information, you are better positioned to manage your current account and future renewals, ultimately saving money.

Adam Lewenberg, CMDSS, MDC, President of Postal Advocate Inc., runs the largest Mail Audit and Recover firm in the United States. Their mission is to help entities with numerous locations reduce mail-related expenses, recover lost postage funds, and simplify visibility and oversight. Over the last year, they have helped their clients save an average of 63% and over $3 million on equipment, fees, and lost postage. He can be reached at (617) 372-6853 or adam.lewenberg@postaladvocate.com.

Your business will likely need to purchase equipment at some point. Whether it's time to replace an old printer, get a new company truck, or install an air conditioner, the following considerations will help you make the best purchasing decision.

1. What is the nature of your relationship with the OEM?

The basis of business transactions lies in relationships. Will this be a one-off purchase or a long-term project with multiple components? Maintaining a mutually beneficial relationship is essential for long-term success. Even if your purchase is an "off the shelf" standardized piece of equipment, it may require service at some point. Will the OEM provide replacement parts, answer technical questions, or service calls for repairs? Knowing an OEM strives to maintain positive, long-term relationships adds value and peace of mind.

2. Does the OEM understand your industry and specific needs?

Working with a manufacturer with expertise in your specific niche is crucial. For example, a metal fabrication shop can produce an inspection table, but if they haven't built one for a food production facility, it may not meet food safety standards. Ensure the OEM understands and can meet your specific needs.

3. How is their communication and customer service?

Excellent customer service includes open and honest communication among all parties involved. Are they upfront about their capabilities? Can they meet proposed timelines? Be mindful of OEMs that promise something too good to be true. The true test of customer service is how a company responds when unforeseen issues arise. A healthy collaboration often produces better results.

4. Does the OEM sell directly, or through a 3rd party vendor/distributor?

There are pros and cons to both methods. Distributors offer convenience, the ability to purchase in smaller quantities, reduced lead times, and possible cost savings. However, working directly with a manufacturer generally means lower costs, complete control over the sales process, and access to those who design and build the equipment.

5. Where is the OEM located?

Rising fuel prices make components from far away less economical. Quality issues, time zone challenges, and a lack of support are additional headaches. Working with local manufacturers benefits all parties involved and makes good business sense, especially when issues arise.

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6. What are the OEM's capabilities and certifications?

Verify the OEM's capabilities by checking their equipment, past projects, and qualifications. This is crucial to ensure they can handle your project. Ask for a full list of capabilities, as the OEM may offer additional services you are unaware of.

7. What value-added services does the OEM provide?

Sourcing equipment is just part of the picture. What if modifications are needed? How will the equipment be transported? What if it needs integration with existing equipment? OEMs that provide additional services can add significant value to your project. Consider total costs of acquisition, including logistics, integration, and future support, when making decisions.

8. What is their capacity and lead times?

Finding the right equipment is exhilarating, but long lead times can be a roadblock. Probe for realistic lead times and ask for testimonials. Global supply chain issues continue to impact operations, so ensure the OEM can meet your deadline before committing.

9. Can the OEM be flexible and scalable to your project needs?

Find an OEM that is the right fit for your project size. Smaller OEMs are often more responsive but may lack the capacity for large projects. Larger OEMs can handle big projects but may offer less personalized attention. Ideally, your OEM should be scalable and flexible enough to meet your needs.

10. Is the OEM able to customize their equipment to fit your needs?

Larger OEMs may be less willing to customize equipment, while smaller OEMs are often more flexible. If your project has unique requirements, an OEM might work with you on a completely custom build.

11. Is the OEM able to provide examples of their work?

Request examples of the OEM's work or a site visit. Satisfied customers willing to share their experiences indicate strong performance. An inability to provide examples may signal potential issues.

OEMs come in all shapes and sizes, and not every one is the best fit for every application. Asking questions and performing due diligence will help you determine if they are the right fit for your business. Do you have an application? Get in touch with us to see if we're the right fit for you!

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