One of my cockamamy schemes that I’ve been working on involves distributing lots of pre-paid envelopes to people who probably aren’t going to bother responding. Just out of curiosity, I thought it would be cool into getting some of those business reply envelopes so that I’d only have to pay for the ones that get sent back. The long and short if it is that the finances involved are a little nuts.

According to the USPS website, for a small-timer (under 887 replies/year) the annual permit fee is a quite-reasonable $175. Then it starts to get squirrely. You also have to pay $0.70 on top of the NORMAL postage for each returned item–so $0.96 per postcard and $1.11 per letter. Now, if you’re high-volume it gets more reasonable–only an $0.08 bounty per return, which makes it $0.34/$0.49 for postcards/envelopes, respectively. And you still pay the $175/year permit fee, but you also have to pay $550 for “volume” processing.

But back to the “little guy” BRM: ludicrous! Considering that (without the permit fee), every returned envelope costs ~2.7 times what a normally stamped envelope, the return rate would have to get REALLY REALLY bad before using BRM would seem like a worthwhile investment. Crunching the numbers…
Suppose I send out 400 SASE. I got 500 envelopes from Costco for $10.00, so add $0.02 per envelope. I found a site that’d give me 420 address labels for $5.99 (plus prob double that for shipping). So, figuring around $0.46 per envelope, 400 * $0.46 = $184.00. Doing the same thing with the BRM would cost $175 + $1.11/letter, which would mean that if less than 9/400 people responded, I would’ve saved money by using the business reply mail. That’s a 2.25% response rate.

There’s a chance I’m too naive, and the return rates really are that bad. And the BRM might not feel quite so much like throwing money out the window (in the form of stamps). But that initial $175… ouch. If I really do get less than 9 responses out of the first 400 envelopes… the cost for doing 400 more is completely negligible. I’d essentially be paying another $10 to double up. If the response rate is somewhere closer to 20%, though, the first batch will cost me $263.80 for 80 responses. Eighty responses is probably all I need, so it might be worthwhile…

I started this rant thinking about how ludicrous the USPS seemed, but I guess the numbers (assuming a cynical return rate) MIGHT make it worthwhile.