Winning at the Postage Game
Worried the upcoming postage hike will put a dent in your marketing budget? Learn some creative ways to cut costs.
Opinions expressed by Entrepreneur contributors are their own.
On Monday, May 14, the U.S. Postal Service will implement rate changes that could hit small-business owners where it hurts. If your business involves sending out large quantities of packages, you'll probably feel the impact more than other businesses as packages are experiencing the greatest increases. But if you're creative with your mailers and master the new shape-based pricing system, you may be able to cut costs and actually come out ahead.
In March, USPS approved an increase in the price of a first-class stamp from 39 cents to 41 cents to cover operational expenses. Rates were raised just last year, but that increase was required by Congress to fund an escrow account. The implementation of new rates for periodicals, such as newspapers and magazines, has been delayed until July 15 to give the publishing industry time to update computer software and adjust to the complex rate structure.
Here are some examples of postage increases that could affect your business:
|Examples of New Prices for Postage|
Effective May 14, 2007
Letters, Greeting Cards
Flat Rate Envolope
Flat Rate Box
12-Pound (Chicago to Los Angeles)
Flat Rate Envelope
5-Pound (Chicago to Los Angeles)
** Postal Service Governors are requesting reconsideration for the new price of this item.
In addition to the rate changes mentioned above, USPS also unveiled a new stamp to help customers ease the transition between the 39- and 41-cent first-class stamps. The Forever Stamp will sell for 41 cents and can be used for any future one-ounce letter mailing without extra postage, regardless of future price changes. "A lot of people are speculating whether it'd be a good investment or not, but that's not the reason we created it," says Dave Partenheimer, a spokesperson for USPS. "Our purpose is for customer convenience."
If you still have remaining questions regarding the upcoming rate hike, USPS has created a section of its website specifically dedicated to the rate case.
Understanding Shape-Based Pricing
By understanding the new pricing structure being implemented on May 14, you should be able to adjust your mailings and save some cash. This move to shape-based pricing recognizes that the processing cost for mail is much different depending on the shape. For instance, regular letter-sized envelopes go through the system much more quickly and efficiently than a larger envelope or package. "We're trying to encourage more efficient mail preparation and then passing the savings on to the customers," says Partenheimer.
He recommends that small-business owners reconfigure their mail so it fits into a smaller mail piece if possible. For example, if you typically mail out three or four pages of letterhead paper unfolded in a large envelope, try folding the papers instead so they fit in a standard envelope. You can actually save 39 cents per piece. Or, if your company tends to send out mailers in small packages--6 ounces, for instance--Partenheimer suggests reconfiguring the mailer so it fits in a large envelope instead, even a padded envelope if necessary. By doing this, you can save 33 cents per piece.
Of course, USPS realizes that not all companies can automatically alter their mailers.
"Some companies would prefer to mail something out of a larger envelope rather than a small envelope for attention-getting purposes, and others might not want to fold documents inside. But if they can do it and they want to do it, this is an excellent opportunity to mitigate the price increases," Partenheimer adds.
Alternatives to Snail Mail
If the upcoming postal rate increase has you exploring alternate ways of getting your message out to potential customers, these online services may be able to make your marketing and mailing needs a bit cheaper and a lot less stressful. For instance, DYMO Stamps, an online postage provider, offers a desktop mailing package for about $230, which includes a scale and a printer for printing stamps, along with DYMO Stamps software. The company also will be giving customers a set of 10 free two-cents stamps to help bridge the two-cent gap starting in May.
Another new technology that will keep you away from long lines at the post office is FlyDoc. It's an online document delivery service that, with the click of your mouse, automatically delivers physical mail, faxes and e-mail. Here's how it works: Once you're done typing a letter to be mailed, pull down the choices on your regular print menu and choose "FlyDoc Printer" as an option. The document is then sent into FlyDoc's worldwide network of mail and fax facilities, where they're stamped, addressed and sent automatically. The services are offered in a pay-as-you-go format with no setup fees and no minimum purchases.
For companies wanting to completely move away from snail mail, MailChimp is a user-friendly alternative. Ben Chestnut, co-founder of The Rocket Science, which provides MailChimp.com, says many of his clients will be using e-mail marketing more because of the increasing postal service expenses. MailChimp provides clients with e-mail templates to avoid them having to use HTML. The program also allows users to embed graphics and helps build and maintain lists. The cost of the e-mail marketing strategy is based on a credits system. For example, 500 e-mail credits cost $15 (3 cents per recipient), and 500,000 e-mail credits cost $2,500 (.5 cents per recipient).
With the many mailing alternatives available online and the shape-based mailing suggestions mentioned above, there are ways your company can lessen the impact of the upcoming postal rate hike. Examine your mailing needs to determine what's right for you and your customers, whether it's getting involved with an online system or sticking with traditional mailing methods. Start now to make the May 14 transition even smoother.