In the world of ecommerce, any time you hear about a rate change, it often means an increase in shipping costs.
Such is not the case with the latest rate change from the United States Postal Service taking effect on September 7 — and that is welcome news to online businesses.
In a nutshell, the USPS will be lowering some Priority Mail rates for businesses using electronic postage services. This rate change especially benefits sellers who ship heavier packages (5 pounds and up).
With the holidays around the corner, the USPS rate change offers a strong incentive to review your current shipping strategy. So here’s what you need to know to take full advantage of all of your options.
Online shipping services are key
Priority Mail rates are going down across Zones 1 and 5 for those shipping heavier-weight packages. The greatest savings are for those sellers using online shipping services such as electronic postage who receive Commercial Base or Commercial Plus pricing.
To clarify — Commercial Base prices are lowered shipping rates automatically available to electronic postage users. Commercial Plus prices are lowered shipping rates available to qualified high-volume shippers.
Heavier packages stand to benefit
This price change is focused on Zones 1 – 5 and specifically targets packages weighing 5 pounds and up. You’ll see the bulk of the savings from 5-25 pounds with Commercial Base, and between 5-35 pounds with Commercial Plus pricing.
Here’s a breakdown of some of the decreases you can expect to see once the new rates go into effect.
Commercial base pricing (zones 1 – 5):
|
Package Weight |
Average Decrease |
Average Savings |
|
3 – 5 lbs. |
$ 0.15 |
1.7% |
|
5 – 10 lbs. |
$ 2.48 |
19.1% |
|
10 – 15 lbs. |
$ 7.22 |
38.5% |
|
15 – 20 lbs. |
$10.55 |
44.6% |
|
20 – 25 lbs. |
$ 6.96 |
27.0% |
|
25 – 30 lbs. |
$ 0.06 |
0.5% |
Commercial plus pricing (zones 1 – 5):
|
Package Weight |
Average Decrease |
Average Savings |
|
3 – 5 lbs. |
$0.85 |
11.3% |
|
5 – 10 lbs. |
$4.23 |
34.7% |
|
10 – 15 lbs. |
$7.03 |
43.2% |
|
15 – 20 lbs. |
$7.21 |
38.0% |
|
20 – 25 lbs. |
$6.49 |
31.0% |
|
25 – 30 lbs. |
$5.60 |
24.1% |
|
30 – 35 lbs. |
$4.98 |
19.4% |
Big savings this holiday season
These new rates translate into huge savings this holiday season.
Commercial Plus Pricing customers using Priority Mail during November and December can save an average of 42% on their 5-10 pound packages in comparison to FedEx and UPS Ground.
To put that in perspective, if you were to ship 50 packages per day from San Francisco to Seattle, that equals $16,531 in savings.[1]
Those savings continue to rise with the number of packages you ship.
|
Priority Mail Savings for 5–10 lb. packages |
|
|
Number of packages (per day) |
Average savings |
|
20 |
$ 6,612 |
|
50 |
$16,531 |
|
150 |
$49,593 |
|
300 |
$99,186 |
Additionally, since the USPS typically delivers Priority Mail packages in one to three days — coast to coast — this makes it a great option for fulfilling those last-minute orders.
So don’t be like the procrastinators who wait to get their shopping done. Get a leg up by putting your shipping strategy in place now and consider using USPS Priority Mail for your heavier-weight packages this holiday season.
Believe me, when Cyber Monday rolls around, you’ll be glad you did!
Amine Khechfé is co-founder and general manager of Endicia
[1] All calculations based on a package shipped across five zones and in comparison to FedEx/UPS Ground. FedEx/UPS Ground $2.90 residential surcharge and 7 percent fuel charge factored into calculations.