|Tue Aug 13 2019 15:12:09|
Never Too Soon to Talk about Postage Rate Hikes
By: Ina Steiner
The USPS is already preparing next year's postage rate increase, according to the Official Mail Guide (OMG). As online sellers know all too well, shipping carriers raise rates at the beginning of each year (and sometimes more than once a year).
The USPS provides "market dominant" postal services, which includes First Class mail, and "competitive" shipping services, which includes Priority Mail. Each of those two categories of mail have different restrictions on how rates can be changed.
The USPS is not allowed to raise market dominant rates higher than the Consumer Price Index (CPI), while it has much more freedom in raising competitive rates.
said mailers should expect the USPS to file a request with the Postal Regulatory Commission in October for market dominant rate hikes in January 2020. "Key to what the rate hike will be is the August Consumer Price Index (CPI), which will be known in mid-September. At this point the forecast is 1.9%, which would be the maximum rate hike permitted under law."
But Printing Impressions World
noted this week that the Postal Regulatory Commission is currently involved in a "major review of the system for setting market dominant rates."
Neither publication shared insight into how the USPS is thinking about rate changes to *competitive* products like Priority Mail.
Note that eBay and Etsy generate additional revenue for themselves when shipping rates go up, since they charge sellers a "commission" fee on shipping costs - meaning marketplace sellers face the double-whammy of a postage rate hike and a marketplace fee hike all in one.
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