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When postage rates rise, small businesses pay
By John
Burke • Bankrate.com
 Postage
rates are on the rise again, and small-business owners are not amused.
The rate hike effective June 30 will take a $2.3 billion chunk out
of operations with one to 99 employees, according to a recent study
by the National Federation of Small Business.
Specifically, small-business owners with one to four
employees can expect to pay about $540 a year extra for postage
costs, while entrepreneurs with 10 to 99 employees will pay an estimated
$2,208 a year extra as a result of the higher rates.
The hikes are also likely to result in the loss of
5,000 jobs within companies with one to four employees, the NFIB
says.
"Small business constitutes a major customer
for the post office's business," says William Dennis Jr., NFIB
senior research fellow and author of the recent NFIB Postage Rates
poll. "And mail and package delivery is a service that is vital
to many small businesses.
"While small-business owners have traditionally
relied on the post office for these services, the survey suggests
that U.S. postal service's strategy of raising prices and cutting
service is not a recipe for getting more business from small business."
Highlights of the study include:
- The average small business currently spends about
$338 a month (about $4,000 a year) with the U.S. Postal Service.
Depending on business size, however, the average monthly cost
can vary from about $239 a month to $1,000 a month.
- As many as 70 percent of small business reported
increasing their use of fax and e-mail as a substitute for postal
service in the last 12 months.
- Small-business owners do not favor a multi-rate
system based on distance. Fifty-four percent say it would increase
their costs, and nearly 70 percent say it would be at least a
minor administrative hassle.
Have you adjusted your operating budget to account
for the postage increase? Do you expect it to have a major impact
on the way you do business?
-- Posted: June 28, 2002
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