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Thursday, January 31, 2013

USPS Shipping Prices Hike!

Hey everyone,

Recently, I noticed that all of my shipping labels for the shop have increased significantly in the past couple of days! Just yesterday, I shipped out a giveaway winner's prize to Italy and the mere 3 ounces cost me $9! How will these price hikes affect online venues in the future? Well... let's see...


http://logisticsmgmt.com/images/usps_hike.jpgAccording to wholelsalecentral.com, as of Dec 1, 2012, the U.S. Postal Service has announced it will raise postage rates on January 27, 2013, pending review by the Postal Regulatory Commission (PRC).

Priority Mail service will increase overall an average of 6.3 percent, and retail prices will increase an average of nine percent. About three percent of the increase is for free tracking visibility, which will now be included at no charge. The average price increase for Priority Mail Commercial Base will be 3.7 percent, available to those who use online postage services. This may be an incentive for online sellers who do not already use online postage to investigate such services. 


Also beginning in January, there will be a new fee of $2.50 for expedited delivery of flat rate packaging supplies. The First-Class Mail Stamp price, which rose to 45 cents in January 2012, will rise to 46 cents. (Start investing in forever stamps everyone!!) The PRC will review prices before they become effective.
http://www.americanthinker.com/blog/stamps.jpg

WOW! These are a lot of price hikes and after several years of seeing the stamp prices rise, USPS is really trying to survive a couple years longer. I've known that they have been in a dangerously low place for the past decade.

I grew up penpaling with friends and learning stamp prices at a very young age. To see how much more expensive it is now... simply notes how much further we have technologically advanced away from snailmail.

But hey! With increasing online shopping, shipments need to be made somehow right? And although UPS and FedEx are great for bigger and more important deliveries, the USPS has always taken care of the vast majority of snail mail.

http://4.bp.blogspot.com/_3Ih0zSkKmFI/Rgs-Jifo-uI/AAAAAAAAAp8/v4gO8DKWS8I/s320/ForeverStamp.jpgMSN Money recently wrote about the rising concerns of USPS's survival as well.

For fiscal 2012, the Postal Service defaulted on $11.1 billion in mandated payments to the U.S. Treasury -- which in turn contributed to a record loss of $15.9 billion.

The USPS receives no tax dollars for its operating expenses, relying on the sale of postage, products and service for funding. It’s been reducing its annual cost base by about $15 billion since 2006 and has cut its workforce by 168,000, or 24% -- while reducing hours, closing some small post offices and consolidating others.



I don't know guys. For small businesses like mine, this is going to make our shipping prices skyrocket. I have already started adjusting prices to match the current shipping prices. The hike ranged from $ .20-$4.00! This saddens me greatly knowing that my customers will need to pay more for deliveries-- especially overseas. Domestic U.S. mail doesn't seem to be too different but who knows how many more changes are to come with each following year.

Please share your thoughts on this matter and if you are a small business owner, what postal services do you use? How will this news affect you as an online consumer or online shop owner?

Share any viable options we should know!

I'm adding this link from etsy's blog about price hikes here (they have a nice chart):
http://www.etsy.com/blog/news/2013/shipping-rates-update-for-sellers/

Thanks,
Dana

9 comments:

  1. I'm not a seller on Etsy, but I feel your pain. I've been selling used things, from books to clothes, nationally for about 5 years now, and over a year ago the postal services in Austria *waves hello all the way from Europe* increased the rates for letter mail. Now it's not so much about the weight (that too, of course) but the size of the letter and anything that's odd shaped and/or thicker than an inch is automatically the highest category. Basically this means if I were to send a letter of, say, 3 ounces which happens to be thicker than an inch, to the US, it'd cost $30,- at the current exchange rate (trust me, it doesn't sound much better in Euro). Ridiculous? Very much so.
    Even nationally people would complain why postage rates were so high as if it were my fault and my sales went downhill from there (now that word has got round and people got used to it, it's better again).
    I don't even want to think about how bad it must be for Etsy sellers in Austria if they want to send items overseas. I do know from some Etsy sellers who happen to live near the boarder of Germany that they drive there to mail things and they save lots of money that way.
    As I am aware of how outrageous postage rates can be I'm not that easily scared off, but those who rarely send something themselves might be put off by the hike in postage rates. Advice? I don't know. I mean, you can't just swallow the additional costs, after all you put work and material into your pieces and want to earn a bit too. I think that a small note in the info section of the shop, about the new rates might be a good idea, of course it's no solution, but people are more likely to understand.

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  2. Thanks for your comment Birgit! $30 for a 3 ounce letter is ridiculous! And yes, the thickness always gets us here too. I mail out 1 ounce padded envelope letters with jewelry but the fact that I put it in a little jewelry box makes it's double the price.

    I'm so sorry that Austria's postal services are so expensive. And i agree with you completely that if people ship themselves and know the rates, they are more likely to understand. I see people at the post who give the worker at the register a very confused face when they realize (mailing out something probably for the first time) that postage fees are no joke. Luckily, I haven't had anyone complain about shipping prices are anything like that thus far...

    I'm taking your advice and making a little memo on my shop about the price hikes though.

    Good Luck!

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  3. I've been following this topic on the Etsy forums for the past few weeks. Since the price increase took affect last Sunday, a few sellers have reported that it's been business as usual with international sales (no affect). According to overseas sellers, this now puts U.S. international rates in line with other countries' costs. Apparently our old rates were so low that international sellers couldn't compete even when shipping within their own country.

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  4. I totally forgot about this. One of my seller friends warned me about this and I completely forgot to change my prices. I need to get on it!

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  5. Yeah USPS had really great first class international rates. I always found it useful and then it jumped so much! I wish we made a more gradual shift. Shipping prices to Canada doubled for me and are basically neck and neck to packages heading to Europe! I of course am still catching on so it seems like I will still be adjusting to more changes in the next few weeks.

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  6. Your blog is very interesting. Kisses from Spain.

    http://redecoratelg.blogspot.com.es/

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  7. I was really disappointed in the almost double shipping cost for international. =0( The most surprising increase for me was the cost to ship to Canada...It's almost the same as shipping to Europe!
    The graph showing shipping vs. gas prices is incredible. I always hear complaints about gas prices, and I do hear it about postage too (but not as much), but the graph really speaks for itself.
    Great post, Dana! Thank you.
    ~Kim

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  8. Yes-- to Canada was definitely the craziest change! :( What a shame.

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All thoughtful comments are appreciated. :) Thanks for being here!

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