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Tue Oct 16 2012 20:03:40

New 2013 Postage Rates Include Some Whoppers

By: Reader

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Dear Ina,
I reviewed the U.S.P.S. Board of Governors (BOG) PDF file link you included in your recent posting, Merchants to Be Squeezed by Postage Rate Increase in January.

Ebay sellers now revising listings for the Fall and beyond listings etc. again, should take a close, scary, wide-open mouth stare at what shipping products of the USPS have already changed and are now poised to skyrocket in price: Parcel Post (renamed Standard Post) and International First Class International Package.

These services are now in new classifications allowing pricing to be more flexible, and less regulated. The Board of Governors call it competitive. I assume the Postal Regulatory Commission (PRC) will adopt most of the BOG recommendations. We will likely only hear in the press those domestic price changes (i.e. First Class Mail (letters), and Priority Mail (domestic).)

And with eBay's push to International shipping, this could affect eBay sellers, and those on other venues, negatively.  

If I interpret this proposal/document correctly:

Examples:  1 oz - 2 oz  International First Class Package: Current $3.00 across all country zones. (Note: the last postal competitive re-classification for these packages last year increased rates from $1.77 to the present $3.00.)

New 2013 prices if adopted: $6.03 - $6.55 for 1 oz - 2 oz packages. Page 86.  That is 100% plus increase!

Prices vary based on whether an online service is used for labels, or payment is done at retail location, the latter being the most expensive. This is a huge increase causing sellers to reconsider selling international, especially with the lack of tracking in most International First Class Mail Packages, requirement to stand in line for presenting package to a retail clerk (you cannot drop off), higher PayPal acceptance cost, increased risk of mysterious non-delivery, etc. 

And currently, I don't see eBay passing through to TRS any Commercial or Commercial Plus savings, unless, or course these sellers individually qualify for the USPS savings for TRS.

Parcel Post now appears to have to cover costs, and as such a 20%+ increase is required across the weights and zones to achieve this 100% cost coverage requirement.

The 'good news' is that the domestic First Class Mail Pkgs in 1 - 3 oz. appear to have relatively small changes of 5 cents for 1 oz to 3 oz weights for online purchases. Currently it is $1.95 + $0.85 for at retail purchases, and  $1.64 in postage (including free Delivery Confirmation) when printed online.  The new prices are proposed to be $1.69 as I interpret their recommendations.

And, one entertaining passage in the document from the Governors:  (page 3)

"Retail prices will increase an average of 9.0 percent. However, approximately three percent of the increase is for free tracking visibility which will now be included at no charge." They raise prices 9% and state it really isn't 9% since 3% in the increase includes "free delivery confirmation." Sounds like eBay speak.

I do ship 99% of my items 1 oz First Class Pkg  for no additional shipping charge both domestically, and to most international Western countries with less mysterious non-delivery issues. My international exposure by eBay (both UK paid), and other organically displayed listings in AU, etc.  have been slowly crawling up. I suspect it will come to a stall with these price changes and I start charging full or subsidized shipping rates. Even with the FVF savings for International shipments, this will not cover it.
Colin (eBay seller)

P.S. Separately, a PayPal service rep informed me that PayPal shipping will be folded in to eBay shipping, and will then allow sellers to print labels even for shipments that do not originate on eBay. If sellers are using the limited PayPal shipping options to create and ship directly to create labels, that option may be disappearing soon.

 



Comments (24) | Permalink

Readers Comments

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This user has validated their user name. by: iheartjacksparrow

Tue Oct 16 23:02:14 2012

Thanks, Colin, for the clear explanation of the changes. Since 99% of what I ship is via First Class Package I'm glad to know that that will be a relatively small increase. I no longer ship outside the U.S., unless the buyer wants to pay for Express Mail, as the tracking just isn't there otherwise.

I'm not happy to hear that PayPal shipping is being folded into eBay shipping since I've been using PayPal MultiOrder shipping. I guess it's time to move over to the USPS Click-N-Ship for Business.

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This user has validated their user name. by: Rexford

Wed Oct 17 07:28:10 2012

What really gets my goat is that every time USPS has a rate increase the ONLY thing that the mainstream media cover is the increase in the stamp prices.  They NEVER cover these much larger increases for packaging.  Therefore, unless the public ships packages, they are clueless about what it actually costs to ship a package.  With eBay's ill conceived DSR rating system, eBay sellers get slammed even when they are shipping at the lowest price they can.   And don't EVEN say free shipping to me.  There is no such thing as free shipping no matter how much that phrase is used. Staying that it is free doesn't make it so.

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This user has validated their user name. by: Rexford

Wed Oct 17 07:30:37 2012

ooppppps, meant "saying that it is free doesn't make it so".

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by: mylifeisgood This user has validated their user name.

Wed Oct 17 07:39:01 2012

Better question is " How long will it take Fleabay and Pigpay to update their shipping this time"?

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This user has validated their user name. by: Basset

Wed Oct 17 07:48:27 2012

Thanks Colin - for sharing your USPS homework with us!
The increases are of significance for those who offer eBay's ''free'' or my preferred name for it: ''Shipping included in price''. Item prices will most likely be going up a bit more, especially for over 13 oz items. I've been giving eBay's ''free'' shipping a test drive but I worry that when buyers look at the shipping included price for items that have to go Priority, it can be off-putting. I do think it makes a difference on an unconscious level for some buyers to see the one higher combined price figure as opposed to a separated smaller price that needs to be added together with shipping. Even if the separated pricing figure adds up to a higher number.

One thing besides increased postage costs that concerns me. If an internet sales tax passes - and I believe eventually something will come about - How will buyers feel about being taxed on the higher ''free'' shipping price where shipping cost has been added. Will they then start flocking to the price & shipping separate items? Even big name retailers that offer ''free'' shipping still charge buyers sales tax when applicable.

Back to USPS - everything in the news about these guys would make you think they are going down the tubes, yet I have seen NO drop off in service on a personal level or for my business. Regardless of what is going on behind the scenes - I have to give them good marks!

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This user has validated their user name. by: Marie

Wed Oct 17 11:35:40 2012

@mylifeisgood

That is a good question.  When PP handled labels, it has been my experience that they were on top of rate changes and it was never an issue.  But who knows with Ebay.  They have had many problems with this label program.

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by: Wire This user has validated their user name.

Wed Oct 17 13:08:54 2012

guess it might be time to go to stamps or something like them.

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This user has validated their user name. by: Marie

Wed Oct 17 13:14:41 2012

@wire

How would that help?  

Some stamps will cost you more if you go to the post office to purchase them verses doing your labels on the internet.  Electronic labels can and do save money, not to mention the ease of it.  And with stamps you aren't going to get DC unless you go to the post office and pay extra that you wouldn't have to pay if you did your label on line.

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by: AC_in_Mich This user has validated their user name.

Wed Oct 17 14:05:37 2012

@marie I think wire might have been thinking stamps.com service, not physical stamps

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This user has validated their user name. by: Marie

Wed Oct 17 14:30:14 2012

OH, dang I need more coffee.  Of course they do.

That however won't avoid the price increases.  But they are a good alternative to Ebay labels if the monthly fees is cost effective for you.

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This user has validated their user name. by: Tula

Wed Oct 17 20:44:04 2012

"requirement to stand in line for presenting package to a retail clerk (you cannot drop off)"

I'm a little confused on this one. Are you implying that this may be a new requirement or that it is already required? I regularly drop my international packages in the mailbox. Most of what I send out is under 5 ounces and is in padded envelopes. I print my postage with Endicia, then drop them in the mailbox. I only have to use the counter if it won't fit in the box or exceeds the weight specified on the mailbox (some of them say you can't drop in anything over 13 ounces).

I agree, though, that doubling the international postage is going to be a hardship for many of us. I offer free shipping domestically, and offer partially-subsidized rates for international sales, so I may have to raise my prices a bit to compensate.

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by: mindelec This user has validated their user name.

Thu Oct 18 00:18:19 2012

""requirement to stand in line for presenting package to a retail clerk (you cannot drop off)""

i'm confused about that statement too.  i print out the labels at home and drop the boxes (usually weighing in the 1-3 lb range) in the bin at the post office along with my media mail packages.  i haven't talked to a postal clerk in years, lol.

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This user has validated their user name. by: elpereles
Web Site

Thu Oct 18 00:34:14 2012

The 1st Class International packages increase was too much. The USPS technically is punishing people that ship low weight items.

I sell International. It is bad for me.

@Tula, the International package must be present to an USPS office or hand to your letter carrier. Not in mail box, but we know that some USPS worker don't know or care about their rules. It is up to them to tell you to made the corrections if they believe there is a problem. Anyway the carrier is the one that take the items in the mail box then to the same place.  

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This user has validated their user name. by: Ric

Thu Oct 18 01:53:13 2012

Sellers who will be increasing prices to cover the new rates should remember to include the increase in FVF when repricing their items to cover the new rates.

Postal increases make eBay very happy as they get a boost in Final Value Fees from sellers who offer free shipping and raise prices to cover the higher shipping costs.

They will also get a nice bump in revenue as their 9% Penalty Fee on shipping costs not included will generate more revenue as well.

These additional revenues might make up for the revenue they will lose when they force sellers to process shipping through eBay.

Like many sellers, I will not gamble my business by using eBay's glitch prone shipping process. Bottom line is that instead of getting the revenue from shipping labels processed through PayPal, eBay corp will lose 100% of that revenue from me as I will not process labels through eBay.

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by: Moonwishes This user has validated their user name.
Web Site

Thu Oct 18 11:04:30 2012

With around 20% of my business being international sales that are shipped via first class international, this is going to be a huge stumbling block in my business. I'm literally shocked that the PO thinks that raising prices 100% would help them make more money. They will be making less since most international customers will decide that they don't need the item.

Does the PO even realize how much of their business is being driven by on line sales? That those of us that might go through 1-2 books of stamps each year are instead spending thousands on postage to send our goods all over. I think this is a case os cutting off your nose to spite your face to raise rates this high!

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This user has validated their user name. by: Basset

Thu Oct 18 11:18:03 2012

One thought - if international first class is significantly higher, will sellers / buyers be more inclined to use the new eBay global shipping distribution format when it gets rolled out? Seems like higher int'l postage rates might make that program more attractive to both buyers & sellers. The timing is could work to that program's advantage.  

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by: Patricia This user has validated their user name.

Thu Oct 18 11:53:09 2012

I wish Congress would stop gorging themselves on money the post office needs in order to run.  They are the reason for the outrageous and almost yearly raises.

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This user has validated their user name. by: monkey

Thu Oct 18 12:43:44 2012

Bummer about the rate increases, everybody's going to be impacted ... most importantly the Buyer.

But then again, this is just another good reason for the Seller to offer FREE SHIPPING.

Of course I'll need to raise the overall price on my listings a bit to compensate for the postage increases.

But if my listing is up against another seller's listing, and the Buyer notes other guy's increased charges for shipping ...

... they'll be even more inclined to choose my listing since I offer free shipping.

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by: Kelly This user has validated their user name.

Thu Oct 18 15:01:26 2012

You can absolutely drop 1st Class international packages (and other mail types) in your own mail box, a postal drop box, etc, and do not have to personally hand it to a carrier if you print your own labels/postage (there are restrictions, but for the most part, if you print your own label/postage/custom forms, it's okay to just drop it off.)

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by: RCL This user has validated their user name.

Thu Oct 18 17:32:18 2012

Moonwishes! Re "I'm literally shocked that the PO thinks that raising prices 100% would help them make more money."  Don't forget that the USPS does not wish to be profitable. The USPS has never made a nickel, nor ever will.

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