Together, paper and postage account for about a quarter of the average cataloger's production costs. Still, there is good news: Catalog Age's managing editor, Harry Chevan, says the rise in paper prices is tapering off. The bad news is that the postal-rate reclassification scheduled for July 1 will hit small catalogers the hardest. "Smaller companies are going to see their postal rates go up by 10% or more," Chevan estimates.

* * *

Average production costs and earnings as a percentage of revenues
Cost of goods in the catalog 50%

General and administrative costs 17%

Paper 13%

Postage 12%

Earnings before interest, taxes, depreciation, and amortization 4%

Marketing and creative expenses 4%

* * *

Source: A Catalog Age internal survey of 115 catalogers ranging in size from $1 million to more than $100 million, Stamford, Conn., August 1995.

* * *