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How do Mailing List Brokers structure their fees?
Home » Advertising & Marketing » Mailing List Brokers » How do Mailing List Brokers structure their fees?Posted by Your Guide on November 16, 2005 1:38 PM
Mailing list brokers will not charge you for the list you’re renting. Sound too good to be true? Well, it isn’t. Mailing list brokers are paid a commission by the list owner or manager. In many cases, utilizing a mailing list broker will not cost you an additional cent, but will end up saving you in the long run. If you went directly to a list owner to rent their list, the list owner would charge you the full list price (or cost per thousand, as it is called).
The broker’s commission, which fluctuates between 15 and 20 percent, is fairly industry standard. This means that list owners who are actively selling their lists are accustomed to paying this fee. The more targeted a campaign, the more likely the list broker will use mailing lists with several specific selections. This means more cost. Take, for example, a home decorating company who wants to mail their catalog to only females from a particular list. Since surcharges are often associated with selecting by sex, an additional cost per thousand on top of the base cost per thousand would be added.
To continue this example, the home decorating company has rented a list for prospecting that costs $200 per thousand. If the list broker wants three-month “hotline buyers” (or people who have purchased within the last three months of the database update), the surcharge is $25 per thousand. As mentioned above, the company is also only interested in female buyers. Therefore they are willing to pay another $10 per thousand to receive just female names. With just these two selects, the cost of the list is now at $235 per thousand. For a test mailing of 10,000 names, that’s ([10,000 x 235]/1,000) = $2,350. This comes to $350 in select charges above the base price of the list. Assuming a standard 20% commission, the list broker would make $470 of this transaction.
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