Question-and-Answer Session
Operator
(Operator Instructions)
Our first question comes from the line of Jamie Clement of Sidoti. You may proceed.
Jamie Clement - Sidoti & Company LLC
Lee, can you run us through some of the economics of the flat packaging? I think you laid out a timeline of other facilities where you would have that rolled out, and I know that cost you some money earlier this year. Are you still spending money on that, or from a savings perspective, are you in net positive territory now?
Lee Schram
We have started the complete automation of the process. It's an amazing thing to watch for having a company [during] this 90 plus years one way, it's amazing to watch this process, and it's just a very impressive technology. So we started it, and what we're doing, Jamie, is continuing to improve the amount of throughput literally every day at this point in time, and we're getting exactly what we're looking for at this point.
It's just real exciting for us. What we're then doing is beginning the build out of the other sites that we're going to be put in the flat packaging solution. So the answer is we're still investing in it. We're still building that out. The real benefits on this thing are going to become really as we, as I mentioned as we get this all in placement first half, you'll start to see a lot of nice improvements in terms of our cost structure as we get into the second half of next year.
Jamie Clement - Sidoti & Company LLC
Can you give us a sense historically, how much shipping has been sort of as a percentage of cost in the check business?
Lee Schram
What we like to say, and we've said this publicly many times, I mean, if you look at the cost structure, so the cost to get to the gross margin line, roughly a third of the cost is the material, the ink, printing the paper. About a third is the labor and the fulfillment we call imprinting here and the overhead, and then about a third is the delivery of a piece of it. What we also have been public about in the past is that because of the increasing rates in the postal service, the delivery portion of that is becoming a higher mix than even that third today.
So the opportunity for us to really get focused on. As you know, we've been taking down a number of our fulfillment plans and doing a good job on that. As this all comes in to play, the ability to get our cost structure down more in that delivery space with the automated flat packaging is a real positive opportunity for us.
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