We're Back! 2014 is bound to be a great year for your business with the economy chugging on ahead.
As you plan for 2014, keep in mind our tips in this newsletter on embracing the mobile web space. Google thinks that mobile is key for 2014 and so you should too.
President, Medallion Fulfillment & Logistics
Does it seem like USPS rate increases are an annual occurrence? Judging by the last few years, you wouldn’t be too far off. Even though you may have resigned yourself to these regular changes, this year’s increases are still likely to give you a case of sticker shock.
Effective January 26, 2014, a first-class stamp has risen from 46 cents to 49 cents. While three cents may not seem like much, it represents a six percent increase over last year’s rate. It’s also three times the one-cent increases in both 2012 and 2013. Each additional ounce will cost 21 cents, up one cent from 2012, while postcards have seen the same increase for a cost of 34 cents. Bulk mail and periodical rates have gone up another six percent.
These increases have also extended to several package rates as well. First class package rate, which covers parcels up to 13 ounces, has gone up an average of 5 percent. Media mail, used for books, CDs and DVDs, has seen an even larger jump of 6.3 percent. Priority Express has shown a relatively modest average increase of 3 percent, while instituting a $5 fee for guaranteed 10:30 am delivery.
If you think these increases are more substantial than usual, you’d be right. USPS is under a mandate that caps any increase at the rate of inflation as reported by the Consumer Price Index. Since the Service was created in 1971, postage rates have indeed kept pace with the 4.2 percent average inflation rate. Requests for greater increases must be officially filed with the Postal Regulatory Commission.
One such request was submitted in 2010 and denied. However, the Commission did approve this latest request which was filed in September 2013. USPS sought the increases in an attempt to mitigate losses suffered during the country’s economic downturn beginning in 2009. It was originally hoped that the difference could be made up by cost-cutting, but Congress has refused to pass legislation to allow such measures as discontinuing Saturday mail delivery.
While the actual price of a postage stamp has risen sharply over recent years, it’s still a relative bargain when compared to those in foreign countries. A study conducted by the Institute for Research on the Economics of Taxation reviewed postage rates of the United States along with 40 other major countries such as Mexico, Japan and South Africa. The average rate to mail a regular domestic letter was more than 60 cents, with more than three-quarters of the countries charging more than the U.S. Some of the higher rates included Denmark at $1.02, Norway at $0.99 and France and Great Britain both at $0.69.
Some of the difficulties faced by the USPS have been attributed to decreasing use by individual consumers who are choosing to use electronic mail and fax. But there is still a core of users who prefer sending letters, greeting cards and other items traditionally sent via the post office. The increase will certainly affect them, but they can guard against it with the use of Forever Stamps, which remain valid regardless of the original purchase price.
If you have a business, particularly one that relies on shipping to fulfill customer orders, it’s another story. These increases can make a significant difference in your overhead. Raising your prices to cover the added expense is the obvious answer, but do so carefully. Since the postage increases are greater than the inflation rate, you don’t want your prices to appear to jump too high and too quickly.
One way to save is to use a postage meter or online postage. The changes include a new category called “First-Class Meter” that provides a one-cent discount off all single-piece mail up to 3.5 ounces. This rate is good only with a postage meter, online postage or commercial mailing permit. You should also make sure any shipping calculators you use are reset to account for the new rates to prevent any losses.
About the Writer Jan Stewart
Jan Stewart is a professional writer for Medallion Fulfillment & Logistics, a family owned Los Angeles based fulfillment firm. She writes exclusively for Strategies for Success on topics of business tips, how to promote your business online, and establishing your brand in the marketplace.
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