Wednesday's Newsflash article
"Postage Rate Hike to Hit Penny Book Sellers on Amazon" touched on the impact of new postage rates coming this Sunday particularly on penny-book sellers. We mentioned a media seller who said the USPS rate hike for First Class Package Service (FCPS) would hurt his sales of CDs and DVDs. His items have an average of 4 ounces and he sells them for a penny on Amazon, making money on the shipping.
The current cost to send a 4-ounce package via FCPS is $2.13; on Sunday, that will rise to $2.60.
Gordon Glazer of Shipware
reached out and pointed out that not all booksellers would see a rise in postage. For example, a 12-ounce book he recently ordered for a penny on Amazon would only cost the seller a penny more to ship via First Class Package Service once the new rates take effect.
The percentage change for FCPS for all weights (Commercial Base pricing) highlights why online sellers need to familiarize themselves with the changes and why weight matters.
Rates for items with a weight of between 1 - 3 ounces are going up 27%.
4 ounce: 22%
5 ounce: 17%
6 ounce: 11%
7 ounce: 3%
8 ounce: a decrease of 4% - 11 cents cheaper
9 ounce: 14%
10 ounce: 9%
11 ounce: 5%
12 ounce: 0% (1 penny more)
And because the USPS is extending First Class beyond 13 ounces, sellers who ship items weighing between 13 - 15.999 ounces will see a decrease of between 10 - 12%, according to Glazer.
Stamps.com shows a nice clean chart on this blog post
- it doesn't spell out the percentage change, but you can see the difference in pricing between current rates and the rates as of January 17th (it's the 6th chart down).
Sellers who list items with the same weight can easily assess the impact of new shipping rates on their margins, but it's more difficult for sellers with items of varying weight. Some sellers may have to organize their low-margin media listings by weight and make price adjustments accordingly.
An eBay seller commenting on the article on the AuctionBytes Facebook page
said most of the ephemera items he sells weigh 3 ounces, and he expects the postage rate hike to hurt his business in a big way - raising prices results in lost sales, he said.
Making sure you get Commercial Base pricing (by using an online postage provider - with USPS Click N Ship now excluded) and cutting the weight and cost of packaging are some ideas for coping with low-margin media in weights where costs are going up.
On a recent book purchase, I received a 5 x 7 3/4 inch paperback (3/4 of an inch thick) in a very interesting type of envelope: an A194 kraft cardboard envelope from LilPackaging.com - you can read about its envelopes in this blog post
on its website. It's a UK company and I don't know how the cost compares to other solutions - but the book had no packaging inside whatsoever and arrived in perfect shape. The easy-to-open, easy-to-recycle envelope left a good impression on me as a buyer.
With every ounce making a difference, packaging and shipping envelopes/boxes sellers use to send their orders matters. And the USPS rates affect more than FCPS - the chart on this page
shows that Priority Mail Commercial Base pricing is going up by an average of 9.4%, while Commercial Plus rates are going up by an average of 13.3% for Priority Mail. Parcel Select - Lightweight is going up by an average of 23.5%. And some international rates are impacted too.
Have you found ways to save money on packaging supplies to help your margin, or found ways to cut the weight of your packages to reduce postage?
We've run numerous stories about the January 17th USPS rate changes - our hope is that there are not a lot of shocked people next week when they go to print postage shipping labels and find their shipping costs have changed dramatically.