Postal Costs (Encyclopedia of Small Business)
No business owner will escape postal costs entirely, no matter how small or technologically savvy his or her company is. From the occasional letter or invoice to large regular shipments, businesses continue to rely on some level of paper interaction to operate despite the ever-growing presence of e-mail and other high-tech modes of communication. The U.S. Postal Service remains the primary medium through which such paper communications go, and it provides a variety of services for businesses and individuals.
Express Mail Service. The Postal Service's most competitive alternative to other private delivery services, such as FedEx and UPS, is Express Mail. This service provides next day delivery by 12 p.m. to most destinations, even on weekends and holidays. Express Mail costs several dollars less than the large private delivery services, making it the best option for frequent large shipments under 70 lbs., if cost is the only consideration. The cost for Express Mail is scaled up to 70 lbs., so business owners needing to send heavier packages for quick delivery should check with their local post office for details on larger shipments.
Priority Mail. Priority Mail is similar to Express Mail, provides two-day service to most domestic destinations. If an item can wait for two days to be delivered, this is the least expensive option. Again, this alternative is less expensive than those offered by privately owned delivery companies. Both Priority Mail and Express Mail rates end at 70 lbs, and packages must measure 108 inches or less in combined length and girth.
Standard Mail (A) and First-Class. Standard Mail (A) is the primary option used by retailers, catalogers, and other advertisers to promote products and services. Items must weigh less than 1 lb. to qualify under this designation. Although the charge per ounce on the single-piece rate is the same as First-Class mail, Standard Mail (A) bulk mailings (i.e. not single pieces) can, if pre-sorted by ZIP Code, save money. Pre-sorting saves the post office some processing time and the payoff for the mailer is a reduced rate. However, if the bulk mailing contains errors, found by random sample checking by the postal staff, the charge increases. Then the mailer has the option of correcting the errors, or paying the additional fee. Standard Mail (B) is the same system, but it is applied to packages weighing more than 1 lb.
First-Class, on the other hand, allows the mailer the option of simply dropping mail into any mail drop box, provided it already has the correct amount of postage on each piece. Also, First-Class mail is the generally used option for post cards, regular mail such as bills or letters, and similar single items.
Postage Meters. Personal postal metering has long been an option for businesses that make heavy use of the mail system. It allows the user to pre-stamp their mailings according to precise weight, while still at their business location. The convenience of this item has made it a perennially popular one with many small business owners. According to many experts, however, electronic postal metering is the wave of the future. Electronic postal metering (sometimes referred to as E-postage) enables customers to download postage over the Internet.
SAVING ON POSTAL EXPENSES
Postal expenses can be a significant financial drain on business health and profitability, for small and large businesses alike. Direct marketers, periodical publishers, and other companies that make heavy use of the postal service for basic business operations can find themselves particularly vulnerable. But business owners and experts cite several steps that firms can investigate to reduce their expenses in this regard:
- Regularly update your customer mailing address data to eliminate outdated information and reduce unproductive mailings. "List hygiene is critical to controlling postal costs," stated Kathy Reilly in Folio. "Make sure your lists are clean, accurate and not redundant."
- Take advantage of reduced rates for drop shipments. The U.S. Postal Service offers discounts for mail that is delivered to them further down its distribution pipeline. Destination discounts can be realized by dropping off mail at bulk mail centers (BMCs), sectional center facilities (SCFs), or destination delivery units (DDUs).
- Lighten weight of packages. All postage costsor both domestic and international destinationsre based in part on weight. For bulk mailings, then, reductions in weight can produce big savings. Easy ways of doing so range from reducing the stock of letters and order forms that are being mailed to culling the number of pages in newsletters, correspondence, and other materials.
"Applying Postage with a Keystroke." Nation's Business. December 1997.
D'Antonio, Mila, and Carol King. "Minimizing International Postal Costs." Circulation Management. May 2000.
"Drop-Ship to Combat Costs of Postal Hike." Folio: The Magazine for Magazine Management. November 2000.
Fernandes, Lorna. "E-Stamp may Lick Problem." The Business Journal. October 20, 1997.
McCarthy, Shawn P. "Snail Mail via the Internet?" Logistics Management. October 1997.
Mull, Angela. "Required Postage Meter Change-Out Better Deal." The Business Journal. October 17, 1997.
Reilly, Kathy. "Savvy Production Tips to Cut Postal Costs." Folio: The Magazine for Magazine Management. May 1, 1996.