Postal Rates
• The average small business currently spends about $338 per month with the Postal Service for postage or somewhat over $4,000 per year. The amount varies substantially by firm size with those having fewer than 10 employees spending about $239 per month and those employing 20 people or more just over $1,000 per month.
• Despite proposed double digit percentage increases in postal rates, between 45 and 60 percent of small businesses will continue to patronize the United States Postal Service (USPS) with the same mail volumes depending on the presence of competitors. Where competitors are present, small-business owners overwhelmingly prefer to shift service providers rather than to cut volume.
• The average small business spends $200 per month on first-class mail. Forty (40) percent spend less than $50 per month while 4 percent spend more than $1,000. Almost 60 percent will take no action if first-class postal rates rise 6¢ or 10¢. However, 20 percent of owners will cut volume, many quite substantially, and another 16 percent will shift from first-class letters to a cheaper form of mail.
• Only 4 percent use Periodicals class mail and 8 percent “junk” mail. Small sample sizes do not allow assessment of owner response to projected rate increases in these rate classes.
• Just over half of the nation’s small businesses use Priority/Express Mail through the Postal Service. If rates rise 10-15 percent, over 40 percent of owners expect to leave the Postal Service and change service providers. That assumes no change in competitor prices. Less than 10 percent would reduce volume.
• About 40 percent of small-business owners send parcels through the USPS monthly. Response to a 10-15 percent rate increase parallels response to similar increases in Priority/Express Mail. Over 40 percent would shift to a competing service, but relatively few would reduce volume.
• As many as 70 percent of small businesses increasingly substituted fax and e-mail for mail service during the last 12 months.
• Sixty-one (61) percent say that elimination of Saturday mail delivery would have no impact on their businesses; 24 percent say that there would be a small negative impact; but, 14 percent believe such a step would create a large negative impact. The primary reason for negative impacts is the loss of a day on check deposits.
• Thirty-two (32) percent feel that closing the Post Office nearest them would have no impact on their business and another 43 percent see only a modest negative impact. However, 25 percent fear a serious negative impact. Those located closest to the Post Office express greatest concern.
• A two-tier rate system for first-class mail would likely cost more small-business owners money than would save them money. While 78 percent believe a two-tier rate system would cause little or no administrative hassle, 23 percent say it would create “major” problems for them.
