EcommerceBytes-NewsFlash, Number 2655 - October 19, 2011     2 of 4

Impact of USPS First-Class Mail Rate Increase on Retailers

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The USPS filed price changes with the Postal Regulatory Commission on Tuesday and announced that the cost of mailing a letter would rise by a penny beginning January 22, 2012. Letters (1 oz.) will increase to 45 cents, the first increase in the price of a First-Class Mail stamp since May 2009. The additional ounce rate will remain unchanged at 20 cents.

Will online sellers be impacted? Eric Nash of Stamps.com said the increase only affects shippers who use first class letters to send products such as trading cards and jewelry, and the one ounce rate is only going up by one-cent. Ecommerce sellers who uses postcards as a sales tool or as a follow up reminder will see rates go up quite a bit, he said - from $0.29 to $0.32 (10%).

The cost of mailing letters to Canada or Mexico (1 oz.) will increase by 5 cents to 85 cents, and letters to other international destinations will increase 7 cents to $1.05. Tuesday's announcement does not affect Express Mail and Priority Mail prices.

The USPS said Delivery Confirmation would be free for several parcel products as the Postal Service continues to make tracking an integral component of parcels mailed at commercial rates.

First-Class Mail Presort mailers received good news - when the new prices go into effect in January, the second ounce for presorted letters will be free.

While actual percentage price increases for various products and services varies, the overall average price increase across all mailing services is capped by law at 2.1 percent, the rate of inflation as measured by the Consumer Price Index.

The new annual shipping class rates are expected to be released in a few weeks. Nash believes shipping rates will definitely be increasing, as shipping classes are considered competitive products. The USPS usually release new rates for the shipping classes (Priority Mail, Express Mail and other Shipping Services) in late October or early November, he said.

Nash said he was hopeful the USPS will introduce new products as they have the past two years, such as Regional Rate Boxes and Priority Mail Flat Rate Padded Envelope in 2010, and Cubic volume pricing, Priority Mail 1/2 pound price for Commercial Plus customers and Priority Mail Flat Rate Padded Envelope for Commercial Plus customers in 2009.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.
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