Small retailers impacted by USPS 10% price hike

Last week, the U.S. Postal Service announced an increase on several shipping products used by online retailers, including Flat-Rate Priority boxes. On average, rates increased 9.5 percent in the first price hike on commercial Priority Mail in three years.

Already retailers are feeling the crunch and could turn that burden over to consumers. For example, ScanMyPhotos.com, which relies heavily on priority flat-rate boxes and offers its customers free shipping, saw its bill go up 9.8 percent, reported Internet Retailer.

"Our crazy low prices and free shipping are huge for us," ScanMyPhotos.com founder Mitch Goldstone told Internet Retailer. "I really didn't want to change that." While USPS shipping rates are still far cheaper than any commercial carrier, the hike in prices will most likely affect smaller retailers that don't have the power to negotiate discounted contracts.

The average charge per parcel has gone up $5.50.

While ScanMyPhotos.com says it will not pass the increase in pricing onto its consumers, other companies such as MoreThanKitchen.com are passing along a 10 percent increase to shoppers.

E-commerce has been a life saver for a struggling USPS. The government agency has partnered with big names such as Amazon and eBay. For example, USPS has been testing early-morning grocery delivery in the San Francisco area with Amazon and plans to expand this service to other retailers.

For more:
-See this Internet Retailer article

Related stories:
E-commerce shipments give US Postal Service new life
Amazon tests grocery delivery with USPS
Amazon expands free shipping
Amazon unveils one-hour delivery in New York
Amazon launches Amazon Dash for delivery of groceries

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