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How will USPS pricing changes impact businesses?
A wide variety of organizations depend on direct mail marketing to send targeted messages to specific consumer segments. In addition, e-commerce companies also rely on low shipping costs. With the help of address verification software, each mail piece can reach the intended audience because contact information is accurate and up to date.
Still, many business owners operate on slim profit margins and can't afford to spend large dollar amounts on marketing and commercial strategies that are either too expensive or don't provide a return on investment. As a result, it will likely come as welcome news that certain commercial mail items will be more affordable for many enterprises.
Price of Priority Mail comes down
In apparent response to these companies' needs, the U.S. Postal Service has reduced pricing for a specific type of mailer, wrote Direct Marketing News. According to the source, the Postal Regulatory Commission agreed to a proposed rate decrease for Priority Mail. The announcement is somewhat of a surprise for some business owners, as retailers faced a cost increase of 1.7 percent for the same type of shipping method earlier this year.
The rate for Commercial Plus is predicted to drop 2.3 percent, while Commercial Base fees will decrease just below 1 percent for businesses that ship a high volume of mailers. Forbes indicated the change, which will take place on Sep. 7, 2014, will potentially give the USPS a larger share of the e-commerce market. Companies that sell lightweight goods - between 6 and 20 pounds - online and distribute in high volumes may be attracted to the reduced pricing option.
It's a move that has drawn the ire of commercial enterprises UPS and FedEx. Respectively, these two delivery providers comprise 54 percent and 30 percent of the total e-commerce shipping volume, Forbes indicated. FedEx previously announced a change to its pricing guide for ground delivery, basing cost on package dimensions instead of weight. Instead of reducing rates, business owners anticipate this will increase expenses.
Greater competition among shippers
While the price drop may instigate a new round of shipping wars, the change is ultimately beneficial for companies that depend on low-cost shipping strategies to maintain profitability. Direct mail marketers and shippers can take advantage of greater competition and alternative delivery options while they use mailing address software to ensure accuracy. Whether USPS can assume a role in the plans of e-commerce and direct mail marketing professionals remains to be seen.
