Commercial Printing: The Upcoming USPS Postage Rate Increase

If you design periodicals for a living, or direct mail, or anything else that must go through the USPS mail stream, you’ll be getting a rate increase on January 26. First Class stamps will cost $.49 (up from $.46); stamps for postcards will cost $.34 (up from $.33); and bulk mail, periodicals, and package delivery costs will rise six percent. This rate increase has a limited life of two years. It is specifically designed to help the Post Office recover from the decrease in mailing caused by the Great Recession of 2008.

Why?

A confluence of events has caused the US Postal Service to lose an increasing amount of revenue. Here’s why:

1. 1. The increasing shift of correspondence from paper to the Internet in the form of email

1. 1. The economic downturn of 2008 and its ensuing effects over the years

1. The congressional mandate for the US Postal Service to fund $5.6 billion a year in expected health care costs for future retired postal workers

The Effects of the Postage Increase

1. 1. Unfortunately, postal rate increases cause a vicious circle. Although they are needed to stop USPS revenue losses, they have the side effect of driving direct mailers and periodical publishers to other modes of distribution. As the Internet has reduced customers’ need for the Post Office, increased postal rates have actually fostered this migration from print to digital distribution.

1. 1. Brick-and-mortar stores (such as print bookstores) must compete with online-only vendors. Due to their storage and distribution requirements, physical stores often cannot beat prices offered online. With shipping costs on the rise, this will further erode the profits of brick-and-mortar retailers.

1. 1. Non-profit organizations can be crushed by the yearly postage increases. Although direct mail has proven to be an effective channel for fundraising, non-profits on a limited budget may need to find alternatives.

1. Although not directly related to the rate increase, the possibility of canceling Saturday mail delivery has arisen as a way to ease revenue loss. Unfortunately, this will hurt magazine printers and publishers. In an environment in which magazines and newspapers must already compete with online news sources, lengthening delivery times will make print publications even less timely and potentially hasten their decline.

Ways to Mitigate This Postage Increase

To combat the effects of the rate increases, here are a few ways to save money in your mailing efforts:

1. 1. Clean your mailing lists. Make sure all addresses are complete, accurate, current, and consistently formatted. This involves processing your lists through CASS certified addressing software (for accuracy and completeness) and NCOA software (for updates brought about by a move or change of address). It will also save you money if you add Intelligent Mail barcodes to your addresses. Your goal is to make sure everything you send actually gets to the intended recipient—quickly, easily, and without postal worker intervention. Talk to your USPS representative about your options.

1. 1. Look into “drop shipping” and “co-palletization.” Drop shipping involves shipping your periodicals or direct mail packages to the bulk mail center closest to your final destination. Co-palletization involves mingling your mail pieces with other publishers’ or direct mail marketers’ materials to reduce overall costs by sharing them with the other mailers.

1. 1. Follow all USPS formatting requirements to reap the greatest possible discounts for automation. That is, if the USPS equipment can read and sort your mail without operator intervention, this will keep your costs down. These USPS specifications pertain to mail piece size; aspect ratio (ratio of width to length of a mail piece); address formatting and placement; proper use of tabs, wafer seals, and glue seals; etc.

1. 1. Follow all requirements for bulk mailing, especially sortation of all mail pieces to the finest level possible. Again, the more you do, the less the Post Office must do. And the less the Post Office must do, the cheaper your postage bill will be.

1. 1. Research the most appropriate postal class for your mail. Standard costs less than First Class, for instance. If you can qualify for Nonprofit rates, this will cost you 40 percent less than Standard.

1. 1. Consider the trim size and weight of your mail piece. If you make a print catalog a little smaller, for instance, it may qualify as a mini-catalog or a letter (instead of a flat), and this will reduce postage costs. If you print on thinner paper, your overall piece weight for a print catalog or direct mail package will be less, so the postage will also be less.

1. 1. Use two-way custom envelopes for direct mail or transpromotional mail (like a cell phone bill). When designing your piece, make margins smaller and/or use smaller type sizes in your text. But be mindful of the legibility, appearance, and “ease of use” of the direct mail package. Reducing postage costs won’t help if you drive away potential clients.

1. Invite a Postal Representative to speak to your office as a group, noting ways to reduce postage costs without affecting the quality of service.

This entry was posted on Monday, January 20th, 2014 at 1:48 am and is filed under Mailing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.