November 22, 2014

USPS Rate Increases Could Lead to Changes for Small Businesses

USPS2The United States Postal Service recently enacted higher shipping rates for both domestic and international mail. The rate changes went into effect January 27, 2013. The USPS also implemented new rules and shipping options that might have an impact on the way small businesses send mail and shipments.

First class stamps now cost 46 cents, up one cent from the rate that went into effect in January 2012, and each additional ounce will cost an extra 20 cents. International 1 ounce envelopes now cost $1.10, and postcards have increased by 1 cent to 33 cents.

There is also new pricing in place for Priority Mail Flat Rate products, ranging from $5.60 for a regular envelope to $16.85 for a large box. In addition, free tracking services will now be offered with all competitive packages, including Priority Mail and Standard Post, which has replaced Parcel Post.

Businesses that send higher volumes of mail may also want to look into the Intelligent Mail barcode, a barcode that helps track and process mail. This barcode is now mandatory for mail to qualify for automation pricing, which can be up to 47% less than retail rates. Shippers can print their own barcodes for outgoing mail or have the USPS add it. And on top of the lower rates, the Intelligent Mail barcode lets you monitor your mail as it makes its way through the postal system, so that you can respond accurately to customer inquiries.

Clearly these rate hikes, which went into effect on January 27, can have a large impact on certain types of small businesses that ship products or use postage as part of a marketing strategy.

Justin Amendola, VP of Global SMB Digital Strategy at Pitney Bowes, a company that provides customer communication technologies to businesses, said there are a few things businesses can do to minimize the impact of additional shipping costs.

First, businesses can use online postage solutions for shipping so that they’ll qualify for commercial-based rates from the USPS. Amendola also said that using flat rate shipping options can help businesses save between 19% and 36%. And he suggested that businesses should sort through their mailing lists and remove outdated addresses or customers so that money isn’t wasted sending items to customers who aren’t even there.

Lastly, he suggested that businesses switch from the new Standard Post option to Parcel Select, a commercial option that offers savings on ground delivery and convenient pickup options.

“Standard Post is only available over-the-counter at USPS retail locations, so you’ll lose out on the efficiencies gained by printing your own postage.  Instead, switch to Parcel Select and save on every shipment.”

FedEx and UPS have also recently announced increased rates for the new year. None of these announcements are uncommon, as both companies along with the USPS have announced increased prices for each of the last several years, in an effort to make up for inflation and other added costs.

The USPS has also recently added some  innovative technology options for small businesses, such as Every Door Direct Mail and a redesigned Click N ship site.

USPS Photo via Shutterstock

7 Comments ▼

Annie Pilon - Staff Writer


Annie Pilon Annie Pilon is a staff writer for Small Business Trends, covering entrepreneur profiles and feature stories. She is a freelance writer specializing in marketing, social media, and creative topics. When she’s not writing for her various freelance projects or her personal blog Wattlebird, she can be found exploring all that her home state of Michigan has to offer.

7 Reactions

  1. Ouch. Everything just keeps getting more expensive. I use UPS about 20 times a year so the cost increase will not kill me, but it still hurts.

    “free tracking services” – about time.

    And yes, thanks for the money saving tips and the nod to online postage solutions.

  2. The postal service has been government subsidized for too long and has been losing money. Just like any business, you either cut costs or increase revenue to get profitable. I know it hurts, but if the postal service stops losing money I’m all for the increases.

  3. Great info here, Annie. This is sad to hear but I hope it all balances out in the end. Thanks for the tips too.

    Ti

  4. The postal service has been losing business for years and years, not only to the internet, but also to companies like DHL and Fedex, which offer the same services. I think that the government has had to help them financially far too many times already, but they are losing money and cuts need to be made. No one likes the price increases and no delivery on saturday but I think at this point this needs to be done. Hope their do not lay off employees, that would be terrible.

  5. I’ve certainly felt the increase. I mail mostly small packages overseas, and the shipping charges have literally doubled (or more). A small bubble mailer that used to go to the UK for just over $6 is now costing me almost $13 to ship?!! I’m in big trouble with this. When my International customers see my new shipping rates (will be updating my website over the next few days), I will simply lose a lot of their business. I’m banking on 10 years of good business to hang on to as many International customers as possible, but not too sure.

  6. Geo above is correct, most americans are probably not aware of the increase in shipping outside the…….it has Increased DRAMATICALLY!!!!!!! And will hurt a lot of us small business owners. In some cases (i.e. canada) – the cost has tripled for small packages.

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