Postal Rates

1. 1

   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.

2. 2

   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.

3. 3

   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.

4. 4

   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.

5. 5

   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.

6. 6

   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.

7. 7

   As many as 70 percent of small businesses increasingly substituted fax and e-mail for mail service during the last 12 months.

8. 8

   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.

9. 9

   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.

10. 10

    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.

Volume 2, Issue 3, 2002
ISSN 1534-8326

William J. Dennis, Jr.
NFIB Research Foundation

• 4In MILES, how far is the closest Post Office to your business? Top 100
• 1Would elimination of Saturday mail delivery have no impact OR a negative impact on your business? (If negative impact.) Would that be a small negative impact or a large one?
• 1aHow would you be negatively impacted?
• 2Suppose you were charged a lower postage rate for ALL mail within your own zip code and a higher rate for ALL mail outside your zip code. Would that save you money or cost you money? (If would save or would cost money.) Would that be a lot or a little?
• 3Would a two-tier postal rate system, one lower rate for mail sent to your zip and a higher rate for zips farther away, create a major administrative hassle for you, a minor administrative hassle or no administrative hassle?
• 5Suppose that the closest Post Office was permanently closed and you were forced to use the second closest Post Office. Would that change have no impact, a modest negative impact, or a serious negative impact on your business?
• 5aHow would that negatively impact your business?
• 6Please estimate the amount that your business spends MONTHLY on first-class postage.
• 6aIf first-class postage were to rise 6 cents a letter, to 40 cents, and 3 cents a post card to 24 cents, by the end of the year would you:?
• 6a1By what percent would you reduce first-class mail?
• 6a2By what percent would you shift?
• 6bIf first-class postage were to rise 10 cents a letter, to 44 cents, and 5 cents a post card to 26 cents by the end of the year, would you:?
• 6b1By what percent would you reduce first-class mail?
• 6cDo you pre-sort mail or take other actions that qualify for a postage discount?
• 7Do you mail newspapers, books, or other educational material that qualify for a Periodicals-class postage rate?
• 8Do you send saturation mailings, sometimes called “junk” mail, to specific zip codes or geographic areas that qualify for standard postal rates?
• 9On average, how much do you spend MONTHLY sending Express or Priority Mail through the U.S. Postal Service?
• 9aIf the price of Priority Mail were to rise 10 percent per item by year’s end, would you most likely:?
• 9a1Why would you pay the increase rather than switch services? Is it because the Postal Service is:?
• 9bIf the price of Priority Mail were to rise 15 percent per item by year’s end, would you most likely:?
• 9b1Why would you pay the increase rather than switch services? Is it because the Postal Service is:?
• 10On average, how much do you spend MONTHLY sending packages Parcel Post through the U.S. Postal Service?
• 10aIf the price of Parcel Post were to rise 10 percent per item by year’s end, would you most likely:?
• 10a1Why would you pay the increase rather than switch services? Is it because the Postal Service is:?
• 10bIf the price of Parcel Post were to rise 15 percent per item by year’s end, would you most likely:?
• 10b1Why would you pay the increase rather than switch services? Is it because the Postal Service is:?
• 11Estimated total monthly postal costs.