Should the Postal Service Offer Volume Incentives to E-Retailers?

Offering volume incentives is a common business practice in the U.S. and around the world. Although the U.S. Postal Service offers incentives to businesses that presort their mail, the agency does not offer incentives based strictly on the volume of packages shipped. One reason might be that offering volume incentives would lower the profit margin on each package shipped; yet, the potential volume increase of items shipped would make up for the smaller profit margins.

 

Is the Price Right?

The Postal Accountability and Enhancement Act of 2006 (PAEA) ushered in a new regulatory structure for the U.S. Postal Service. One key element was a price cap on market dominant products. (Most of the Postal Service's products are market dominant.) This means that price increases for market dominant products are capped by the rate of inflation as measured by the Consumer Price Index (CPI).

 

Reducing the Number of Prices

The Postal Service has more than 10,000 prices contained in a 1,800-page customer manual known as the Domestic Mail Manual (DMM). The DMM provides individual and commercial mailers with information about postal services and standards for both domestic and international mailings. The Price List, also known as Notice 123, contains domestic and international retail and commercial prices for all postal products and services.

 

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Recent Comments

  • 15 hours 55 min ago
    Charlie, you are right on. Every day I see my flats in my tub of flat-sorted mail that are all out or order. Someone takes the time to bust open my shrink wrapped (and otherwise bundled) flats that...
  • 1 day 9 hours ago
    I have never had any package get stuck or lost here. I don't send and receive a ton of packages, but I do a fair amount. I'm sure that it does happen on occasion, but i'm just in awe...

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