Small businesses will suffer a $2.3 billion bite as a result of the postal hike taking effect this week, according to a study by the National Federation of Independent Business (NFIB).
The increase will also lead to a loss of 5,000 jobs and $60 million in disposable income in the U.S., the NFIB said.
In other findings, the NFIB reported that small businesses prefer to use competitors to the U.S. Postal Service–when available–rather than cut volume.
The study also shows that almost 60% of small firms will take no action if first-class rates rise by 6 cents or 10 cents. But 20% will cut volume, and another 16% will shift from first class to cheaper forms of mail.
More than half of all small businesses use Priority/Express Mail, but 40% said they would change service providers if rates rise 10% to 15%. And 40% would switch from USPS parcel services in response to a similar hike.
The $2.3 billion in added costs will be split equally between firms with one to nine employees, and those with 10 to 99.
“Small business is sending the USPS a warning sign: Continue to hike rates and we will continue to find alternatives to using the post office,” said Andrew Langer, NFIB’s regulatory policy manager, in a statement.
The NFIB expects the additional costs to fall disproportionately on service firms (including the finance sector). A third of the direct costs will hit the trade sector, which includes both wholesalers and retailers.
The survey is based on NBIF’s Regulatory Impact Model.
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