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2013 Postage Increase: How will it Affect Your Small Business?

Posted by Bri Bauer on January 29th, 2013 at 11:26 am

Smart phones, groceries, copper and postage— just a short list of some items expected to be more expensive in 2013.

Among these, maybe the least surprising is a postage hike. According to Pitney Bowes Small Business, a price increase on postal rates of 2.75 percent went into effect on Jan. 27. If you rely on postage as an integral part of your business or use postage for marketing purposes, you will see price increases.

Small business owners can be more creative in their use of postal services to help offset the increase. Others may finally switch their print-mailed campaigns efforts to email marketing campaigns. In any case, these new increases can run into thousands of dollars for high-volume shippers.

There are three important things small business owners need to know about the 2013 postage increase:

* Low-cost shipping solutions are being eliminated.

* Retail shipping rates are rising an average of 5-10 percent.

* The Intelligent Mail barcode will give business owners and customers more power when it comes to tracking their items.

Here are details of the 2013 USPS postage increase:

New single-piece First-Class Mail pricing includes:

Postcards: 1-cent increase to 33 cents.

Letters (1 ounce or less): 1-cent increase to 46 cents.

Letters over 1 ounce: unchanged at 20 cents per ounce.

Letters for international destinations (1 ounce or less): $1.10.

New domestic retail pricing for Priority Mail Flat Rate products include:

Small box — $5.80

Medium box — $12.35

Large box — $16.85

Large APO/FPO box — $14.85

Regular envelope — $5.60

Legal envelope — $5.75

Padded envelope — $5.95

The good news? The "Forever" stamps offered by the USPS continue to be true to their word. A one-ounce letter mailed using a Forever stamp can be used anytime in the future regardless of postal price adjustments. However, newly purchased Forever domestic stamps will have a 1-cent increase to 46 cents. An international Forever stamp that allows for world-wide mail will now cost $1.10.

Why the increase?

Each year, the USPS is allowed to raise rates if the proposed rate increase falls within the rate of inflation. What does this mean for small business owners? If small businesses export a lot of shipping, especially standard mail that is less than a pound, owners will be looking at overall price increases that could negatively impact profit margins or customer satisfaction if not properly handled.

What can small businesses do now to mitigate the impact?

1. Incur your shipping and mailing in-house

Postage meters are one of the most pragmatic and effective steps you can take to streamline your mailing efforts. The built-in postage scale ensures accurate weighing, and the meter’s printer quickly prints proper postage and postmark details on  envelopes or eliminating trips to the post office. Postage meters can receive automatic updates from the USPS, meaning most small business postage meters will never need to adjust their internal rates to USPS standards. All postage meters are licensed and registered with the USPS so they are leased rather than purchased.

2. Embrace Intelligent Mail barcodes

Intelligent Mail barcodes increase the ability to track individual mail pieces and provide business owners and customers with greater visibility into the mail stream. Intelligent Mail barcodes effectively incorporate the routing zip code and tracks delivery. These barcodes improve deliverability and overall efficiency. This improvement helps customers feel that they, along with the USPS, have accountability over individual mail pieces.

3. Purge your contact list of incorrect information

The correlation of databases to Intelligent Mail barcodes enables small businesses to track back data such as incorrect addresses to the original source.  By ridding your database of wrong addresses, you will be using your mail system more efficiently while eliminating wasted postage costs.

4. Explore new formats

When postage is essential to send materials to customers, the USPS Express and Priority mail options can save significant postage funds. These options have commercial base discounts – 36 percent and 19 percent savings, respectively.

Small businesses that use post mailing for promotional and marketing reasons may want to shift from mass mailing to more homed-in, targeted email marketing. The segment is growing, even if people's inboxes are getting overrun. Email has nearly three times as many user accounts as Facebook and Twitter combined – 2.9 billion – and that was in 2012, as reported in BtoBonline.com.

Through email marketing systems, business owners get direct feedback on the effectiveness of their campaigns. Campaign Monitor and other email marketing systems provide insightful analytics in real-time reports. These tools show the sender who opened it, what they were interested in, who they sent it to and what links were clicked. These findings can help business owners refine their email campaigns and target ideal engagement.

With these tips, it’s important for small business owners to integrate the postage increase into their current pricing. Revisit current product pricing to mitigate any surprises that could show up months down the road.

Many businesses will put this added cost onto customer shipping fees. This may seem like the most logical solution to keep budgets intact, but it’s important to analyze the situation strategically and think long-term. Some small businesses may want to absorb that cost and see what impact it has on customer service before inflating prices on customer-based costs such as shipping.

3 Responses to “2013 Postage Increase: How will it Affect Your Small Business?”

  1. Maggie Young says:

    Bri-this article did not skip on the detail! We loved the succinct list of price increases you included. Even though postal rates are increasing, we think we'll see marketers continue to use direct mail in their campaigns following some basic rules we outlined here:
    Increases in postage

  2. Mike Hanby says:

    Great article!

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