Saturday, September 13, 2014

Rate Cut Has Shippers Switching To USPS

The Postal Service’s recent price cuts for big businesses that ship packages are already trickling down to the small fry, like eBay seller Joe Strader. And based on Strader’s reaction to the rates that took effect on Sunday (Sept. 7), a lot of other small shippers will be switching their business to the U.S. Postal Service as well.

The proprietor of the eBay store Joe’s Surplus and Salvage noted a change he made this week on an item he ships frequently.

“In the past this would have been all FedEx but Priority Mail beats them with the discount. In addition, it gets there on Saturday rather than Monday. For small items, I get free boxes, not an insignificant saving.”

"Yes, that is a 49% discount off of retail,” Strader says of the USPS shipping quote of $9.14 for sending a 20-pound package.FedEx would have charged $10.86 for the same shipment, and United Parcel Service would have been even higher, he adds. Before the rate change, Strader used the Postal Service almost solely for items weighing less than 6 pounds.

“This is going to get ugly,” he says of the heightened parcel competition among the Postal Service, FedEx, and UPS. The new Priority Mail rates are slightly higher for retail customers who drop off a package at a post office but up to 55% lower for medium-weight packages sent by large business mailers.

Extra bonus for eBay merchants 
EBay sellers have an additional reason to like the new Priority Mail discounts: “When a customer of eBay calculates shipping, it gives the rate before the discount. The seller gets the difference,” explains Strader, who offers most of his eBay merchandise with free shipping. “For those that charge shipping on transactions based on calculated rather than flat rate, it is a significant difference” (and additional profit).

He even finds the much-maligned Postal Service often beating its private-sector competitors on customer service. He described what happened with a recent USPS shipment that was supposed to be next-day service but took two days:

“I filled out the simple form, took my receipt and paperwork to the post office and handed it over. After a few strokes on the computer, I had a cash refund, that day, no waiting. I was shocked that I did not have to wait a few weeks like FedEx or UPS only to find out it was my fault for some reason. I asked and the agent said that since it was delivered and obviously the wrong date, the refund is automatically processed.”

“Admittedly, mine is a small town post office and much more convenient than most. However, the service is great, they have picked up as many as a dozen small packages at my door (UPS and FedEx Ground charge by the package), and a lot of stuff I just put in the mailbox with the flag up. They have a few goofy employees, they are often slow at the window, and there are occasional lines (don't go at 8:30 or 3:30). But, I ship 90% of my items USPS.”

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JBS Printing said...

It's about time.

As a printing company we deal with alot of direct mail as well as Every Door Direct Mail (which is mostly how we mail now).

The Post Office needs to focus on making mailing and shipping affordable for BUSINESSES.

That is how they are going to start making more money. They are not going to increase revenues by selling first class stamps to the retail customer.

Give businesses better rates and they will increase their volume with mail and package shipments.

Anonymous said...

Except the usps brand value suffers because the ratio of ad mail to personal mail becomes overwhelming to the recipients. It is no different than web pages and sites that are overtly ad driven... it is self defeating because people will go elsewhere.

Brian said...

"Except the usps brand value suffers because the ratio of ad mail to personal mail becomes overwhelming to the recipients. It is no different than web pages and sites that are overtly ad driven... it is self defeating because people will go elsewhere."

Valid point and I understand what you are saying.

But, there has been survey after survey that the majority of people would prefer to get advertising through mail than any other channel.

They don't want ads on their news feed anymore, they don't want to get emails from companies in their inbox. Websites that have lots of ads on them tend to be like billboards now where people just don't "see them" anymore.

We can use the word "junk mail" (not that you said that) all we want but the bottom line is that direct mail has been proven to be seen as the "least intrusive" and most acceptable form of advertising.

It's also the most effective in my opinion (and not because I'm in the business). Emails aren't opened and simply deleted, Social media ads are glossed over at best and ignored, and if the person isn't online at the time the ad is running they will never see it to begin with, but mail is constantly checked.

It's easier to read, it's tangible and it can have a longer shelf life.

Just my opinion.

Unknown said...

I own a small company and we need some new options for shipping. I think I might hire a freight broker to see if there's anything else we can do for shipping. Is that a good idea?

MMPrint said...

The USPS has really stepped their game up. We've been gradually increasing our shipments with the USPS for the smaller stuff that fits in the flat rate boxes. They get delivered in 2 days and it costs less than UPS ground which can take up to 5 days from East coast to West coast shipments.