Shipping the books you sell on Amazon may soon cost you more than ever. The U.S. Post Office is in trouble. Deep trouble. And that means we can expect more rate hikes coming down the pike.
The USPS’s woes stem from a number of factors. The continued encroachment of the internet on mail’s traditional role in communication is still impacting the volume of mail that’s sent each year. In addition, the economic crisis hit industries like real estate, which usually accounts for a pretty high volume of direct mail, harder than most.
According to the Wall Street Journal, the Postal Service “reported a nearly $2 billion loss for the second quarter ended March 31, with mail volume down nearly 15% from the year before”. According to a statement released by the Post Office itself in February, if current trends continue, “the Postal Service could experience a year-end net loss significantly higher than last year’s $2.8 billion loss”.
So what does all this mean for us as humble sellers of books?
Expect the Post Office to raise rates every six months.
You heard me. Not every year or every couple of years. Every six months. Retail rates went up again in May, for the third May in a row, as a matter of fact. The current system allows annual increases as long as those increases don’t exceed the rate of inflation for the year before.
Got that?
Basically, they are already set up to raise prices every year. However between 1st class, media mail, and all the different rates that affect us as booksellers, we’ve actually seen three postal rate increases over the last fifteen months. They raised them in May 2008, January 2009 and again in May 2009.
I’m going to put on my Nostradamus hat here for a minute and predict that postal rates will go up again in Jan 2010.
The Post Office raising rates this often is going to be a norm we’re all going to have to get used to. The WSJ article quotes Postmaster General John Potter that even if the economy improves “We know all the mail volume won’t bounce back”. With no relief in sight, Potter says that “Every option has to be on the table.”
“Every option” includes a few radical ideas, including a proposal to end Saturday mail delivery, but mostly I think it’s going to mean rate increases.
Shipping is one of the highest expenses a bookseller faces. There’s just no avoiding it. It’s important to keep track of what’s going on in industries, like shipping, that directly affect our bottom line. At least then you can give yourself as much time as possible to prepare for changes, to change your methods, strategies or budgeting accordingly.
I know it’s not what you want to hear. As I mentioned before, selling books is a game of nickels, dimes and pennies. I’m not looking forward to more of that change adding up to higher shipping costs any more than you are. But it’s already starting to happen, and it looks like it’s only going to get worse.
Don’t say I didn’t warn you.
Those who shop online get a wonderful service in the “delivery” of an item to them. They do not have to go out, use transportation and walk all over a store and often do not find what they are looking for. The internet is an exactly what I want service. The cost of transportation in your own vehicle is 58 cents per mile. So most trips will exceed the cost of having a book delivered. The public needs to be reminded of how great a value delivery service is. I love it. I live in an extreme remote area. There are no stores. We have no other choice.
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