The USPS has been raising prices on postage annually for several years now, as pressure to rationalize it’s business model while dealing with federally required unprofitable services is forcing mailers to pay more. As a result, the USPS 2020 postage increases will be rolling out soon.
The Postal Regulatory Commission is the independent federal agency that is charged with providing transparency and accountability for USPS operations. On December 12th, the PRC approved price changes for all products that will roll out on January 26th, 2020.
USPS Postage increases and their impact on direct mail products
While the cost of the first class stamp remains stable at $.55, there are price increases in several services that high volume direct mailers use.
Commercial First-Class and Marketing Mail (Standard Class) are both increasing about 2% in 2020, lower than the roughly 2.5% increases in 2019.
For the mailing nerds among us, the SCF-entry and NDC-entry rates are increasing, as the USPS had previously miscalculated the savings for dropped shipped mailings. Drop shipping is a common tactic that high volume printer/mailers use to create efficiency and cost savings that are passed on to marketers.
How does this impact Postalytics pricing? Stay tuned.
If you’ve used Postalytics to send direct mail, you know that we don’t break out postage costs specifically, our costs are “bundled” for simplicity. We negotiate with multiple printing/mailing organizations to optimize services and pricing for our clients.
While the 2020 USPS postage increases will factor into Postalytics pricing in 2020, there are several factors that impact the pricing of direct mail. Postage, paper pricing (including, believe it or not, raw pulp pricing), labor costs and volume are all major factors that ultimately determine direct mailing prices.
We are fortunate at Postalytics to be growing rapidly, as the notion of automating direct mail is becoming more mainstream. Our volume growth will enable us to mitigate other costs factors, to some extent. This will become more clear over the coming months, as our print/mail partners absorb the 2020 postal increases and we look for ways with them to keep your costs down.
You can lock in 2019 pricing now.
We’re working with many customers to lock in 2019 pricing for their 2020 mailings. If you’re interested in exploring this, get in touch with us immediately.
The unique “direct mail credits” feature of Postalytics enables marketers to pre-purchase the ability to send direct mail, and to get significant price reductions while doing so. If you want to lock in your 2020 mailing at 2019 costs, we advise you to take advantage of our current direct mail credit pricing soon.