An overall 2.57% United States Postal Service rate postage rate increase is scheduled to take effect on January 27th, 2013.
The interesting thing about postage rate increases is that they are typically not distributed equally across all classes of mail. As a result trying to determine exactly how the increase will impact you can be quite confusing.
The purpose of this short article is to break down how the rate increase impacts the different classes of postage. As a bulk mail professional, I'm most interested in the impact on letter-sized pieces and Every Door Direct Mail.
Each year, the USPS is allowed to raise rates. As long as the proposed rate increase falls within the rate of inflation, there's no need for approval from the US Congress or any other entity.
Every Door Direct Mail: The rate increase for Every Door Direct Mail is over 10%! Wow! Postage for Every Door Direct Mail retail has increased from 14.5 cents to 16 cents apiece. This is shocking to me. When the program was first introduced postage was just 14.2 cents apiece and then increased to a modest 14.5 cents. I'm concerned that the USPS might be pricing itself out of the market with this its fastest growing program, and I'm frankly very disappointed with this decision.
First Class Letter-sized Mail: Rate changes to first-class mail always seem to get the most attention because at some point or another, everyone has to purchase a stamp and mail a letter. Here’s the impact:
- Postage for letters that weigh 1 ounce or less will increase 1-cent to 46 cents.
- It will also cost you an extra penny to mail a postcard; the rate increases from 32 cents to 33 cents.
If you want to avoid having to think about the postage increase for individual mail pieces, it's probably a smart idea to stock up on forever stamps. Unfortunately, there's no such thing as forever stamps for bulk mail.
First Class Presort Letter-sized Mail: First of all, there's a lot of confusion about first class presort mail. It's a discounted form of first class mail; even though it's a type of bulk mail, the mail receives first class treatment.
To take advantage of first-class presort, you need to have a minimum of 500 pieces of mail. For letter-sized mail pieces, the postage is typically 10 cents less per piece. As far as the rate increase goes, rates for letter-sized first class mail pieces will increase on average about 1 cent apiece (between 2.7-2.9%).
International Mail: Current postage for first class letters sent to Canada or Mexico is 85¢ apiece, and mail to all other foreign destinations is $1.05 apiece. The increase will result in a consistent rate of $1.10 apiece for all first-class international letter-sized mail, so folks mailing to Canada or Mexico are the biggest losers.
Presort Standard Letter-sized Mail: This is the most common class of "bulk" mail. Unless you're a nonprofit, you probably mail your marketing materials at this rate.
Postage for letter-sized pieces mailed using this class are increasing on average about half a cent apiece. From a percentage point-of-view this amounts to somewhere between 1.4% - 2.1%. Essentially this is a kinder price increase than what you'll experience with first-class presort.
Nonprofit Letter-sized Mail: Unfortunately, there's no good news for US-based nonprofit organizations who rely on bulk mail for their fundraising. On average, letter-sized nonprofit mail will increase about 3.25%. This is actually higher than the average increase and again a big disappointment, and most likely a representation of their collective lack of clout with the folks tasked with this decision.
Despite extreme growth with online marketing activities by nonprofit organizations, on average, direct mail marketing still accounts for the majority of funds raised. This will be an especially painful increase for charitable organizations.
Mailing Permits: The annual cost for a mailing permit is increasing from $190 to $200. People who outsource their mailings don’t have to worry about this.
In summary, it seems like the biggest losers with this rate increase are nonprofit fundraisers and small businesses who rely on Every Door Direct Mail to attract customers to their businesses. Clearly the USPS has a lot of challenges, but each time rates are raised, the USPS is incentivizing its most loyal customers to find alternate communication vehicles for their customers, prospects and donors.
If you have questions about which bulk mail options make the most sense for your organization, I hope that you'll please contact me for help.