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Postal increase forces businesses to cut more

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NEW YORK -- Small businesses already working to hold costs down during the recession have another expense to contend with: higher postal rates.

The price of a first-class stamp went up 2 cents to 44 cents last week, the latest in a series of increases this year by the U.S. Postal Service and private shippers including FedEx Inc. (NYSE: FDX) and United Parcel Service Inc. (NYSE: UPS). The price hikes have motivated small business owners to think about how they can send letters, cards and packages more cheaply.

They've made Stacie Krajchir think about whether to mail or ship at all.

Krajchir's Los Angeles-based public relations firm, The Bungalow, routinely sends product samples to magazine editors. In the past, PR companies would shower samples on journalists, sending packages to any and every news outlet in the hope that someone would give them some publicity. Now, though, Krajchir's staff is likely to call editors first to see how interested they really are.

"Are they working on a story and looking at different products to include in a story?" Krajchir said. If so, her company will send them samples.

Like other small business owners, Krajchir has also found that being creative can also keep mailing and shipping costs down. So, instead of sending several packages to different editors at a single magazine, she'll consolidate the shipments into a single box.

And when she's asked to send something to an editor or other person requesting samples, she'll ask if they have a delivery service account they'd like to use. Often, the recipient is willing to pay.

Many small business owners have also found that delivery services and the Postal Service can help cut costs. Any company opening an account with a delivery service should be able to negotiate a price, especially if it has a large number of letters or packages to mail. Remember, there's a lot of competition out there, and, especially in a slow economy, the delivery companies want your business.

Technology offers small business owners many ways to save money on mailing and shipping costs. It is easy to send printed material by e-mail, or through file transfer Web sites that can accommodate documents and files that are too large for many e-mail systems. These methods eliminate not only postage costs, but also printing and labor expenses.

There are also Web sites that can help businesses comparison shop among delivery services.

Small businesses are also saving by switching to Web-based or e-mail billing rather than snail-mail invoices.

Tamara Wilson's PR firm does so much work via e-mail, including newsletters and billing, that her monthly postage bill is now about $200 instead of the $2,000 or $3,000 she used to spend.

"I'm not only saving that money, I'm saving my clients' money," said Wilson, president of Wilson Public Relations in Seattle. She said she passes the savings along to her clients, who are also scrutinizing costs during the recession.

When she does mail out press kits, which are traditionally folders with information about a company, product or service, they're no longer on paper. They're on flash drives that cost considerably less to mail.

Sometimes, though, Wilson will spend more on mailings for strategic reasons. For example, she'll send envelopes with eye-catching stamps that she buys online. The price premium is worth it to her if it will help her mailings get noticed.

She's also having invitations to an upcoming event hand-delivered. She believes that sometimes personal service can have a greater impact than a letter that arrives in the mail or an e-mail that just pops into an inbox.

Owners who have employees need to be sure that staffers all understand the need to find cheaper ways of shipping. That means teaching them not to use the most expensive overnight service unless a package absolutely has to arrive early in the morning (cheaper next-day services often deliver before noon, anyhow). If a company uses stamps rather than postage meters, employees should know to use a 44-cent stamp and a 17-cent stamp on a two-ounce letter -- not two 44-cent stamps.

Unless all your employees understand mailing costs, there can be an unpleasant surprise when the next bill arrives from your delivery service. Or, when your postage meter runs out.

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