The U.S. Postal Service will be charging higher postage rates effective later this month, starting Jan. 26, 2014.   Following is a summary of some of the increases likely to affect small businesses.

Letters and Postcards

• Regular 1st class letter stamps, such as the Forever stamp, will increase from 46 to 49 cents.  A single stamp covers a one ounce letter (typically 4 to 5 sheets of paper plus an envelope).
• Additional ounces will cost a penny more, at 21 cents each.
• Postcard rates also go up a penny, to 34 cents.
• Bulk mail rates and the cost of mailing periodicals such as magazines, will go up by 6%.

Packages

Packages will see a number of increases:

• First class package rate (used for domestic mail up to 13 ounces) goes up an average of 5%.  For instance, there’s a flat rate for the first 3 ounce, and it goes up 24 cents, to $1.93.
• Media mail rate (used for books, DVDs and CDs) goes up an average of 6.3%.
• Most flat rate Priority remains the same.  Exceptions are the small flat rate box which goes up 10 cents, and the large flat rate box, which goes up 50 cents.
• Priority Express  (formerly called Express mail) will increase on average  3%.  There will also be a new option for 10:30 am delivery, costing an extra $5 — so if it absolutely must get there by the morning, you now have this option as long as you are willing to pay extra.

In a few sizes, Priority Express package rates and Priority Regional box rates may actually go down slightly.  But taken as a whole, the rates are increasing.

The rates for packages are complex.  Stamps.com has a good series of charts showing various increases and decreases.

Back in September the Postal Service requested the rate hikes as “exigent” (emergency) increases needed to make up for losses due to the Great Recession of 2008-2009.  The Postal Regulatory Commission, which has oversight,  approved the changes in a 2 to 1 split decision, but refused to make them permanent.  However, it’s not clear how long “temporary” will be. 

The US Postal Service website as of this writing is not yet showing the new postage rates for 2014.  Any mailings up through January 25th will be at the old rates.

What can you do to save money on 2014 postage?

Many small businesses have already moved toward electronic communications.  Electronic invoicing, direct payroll deposit, electronic bill payment, email marketing instead of printed mailers, and other techniques cut down on paper and attendant postage costs.

But electronic is not always feasible. Here are a few other techniques to consider, in order to guard your bottom line. While not always big savings, they may help a bit:

• Stock up on Forever stamps, if you mostly do onesy-twosy mailings.  The Forever stamp will be good for a 1st class letter, no matter what you paid for it or when you use it.  Example: if you purchased 5,000 Forever stamps before the rate hike kicks in (at a cost of $2,450) you’d save $150.
• Use a postage meter or online postage.  The changes include a new category, called the “First-Class Meter.”  You get a one-cent discount off the single-piece rate for all First-Class letters, up to 3.5 ounces. That equates to a 2% savings.  But you must use a postage meter, online postage or a commercial mailing permit.
• Adjust your shipping and handling costs to recoup the rate hikes from end customers, if you are an e-commerce seller.  Make sure shipping calculators take the increases into account, especially on heavier packages where costs really add up.

Courtesy: Small Biz Trends

About Anita Campbell

I am the Founder, CEO and Editor in Chief of this Small Business Trends site and the Small Business Trends newsletter. I am also the host of Small Business Trends Radio.