Do Small Businesses Need the U.S. Postal Service Anymore?

With their budget in the red, USPS is on the ropes. Here's why many small businesses say they couldn't cope without it.
June 11, 2012

As it says on the James Farley Post Office in New York City, “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.”

Weather may not stop the U.S. Postal Service (USPS), but shrinking revenue might slow it down. With the increasing utilization of electronic communication and competition from private companies, the USPS is losing about $35 million a day.  Recently, it lost $3.3 billion in the first fiscal quarter of 2012.

As its financial health continues to falter, the future of the Post Office looks very uncertain. Will it be the target of the next federal bailout? Will it be drastically scaled back or just shut down? Many small-business owners still use the Post Office as a critical part of their marketing and communication strategy. Here are the top 10 reasons they want the USPS to survive.

1. It's economical. The top reason small-business owners love the USPS is that it saves them money shipping their products. Favorite features include the flat rate shipping boxes and no added charge to send items to rural areas. Brenda at Naughty and Nice Lingerie states that since her products are relatively lightweight, none of the other shipping companies can beat the USPS shipping costs.

2. It works.  With so much e-mail clogging up inboxes, many small businesses have gone back to direct mail model as a more successful way to reach customers and prospects. According to Keri Smyth of CarrotNewYork, “The postal service has been an integral part of how we reach teachers through an opt in postcard.”

3. It's classy. An e-mail thank you is nice, but many small-business owners rely on handwritten mailed notes to their customers. Christian T. Russell sees this as an important part of his “high-touch marketing.” He says that he has "found that very strategic, small scale use of handwritten notes can offer a tremendous return on investment."

4. Paper still matters. For small businesses, this is still a world filled with paper.  As Shilonda Downing, founder of Virtual Work Team, says, “While my business is virtual, clients who aren't in my locale need to mail documents they want processed for bookkeeping and other things.”

5. Media mail. Although it takes longer than regular parcel shipments, the USPS gives special low rates to books and other types of media. Jamie at Sisters Grimm Bookstore says she would drastically have to increase her shipping prices if she was forced to use another method.

6. It offers business addresses. The P.O. box is critical for many people with home-based businesses. For example, it lets Paula Pant, owner of Cleopatra Properties, receive mail without disclosing her home address. Ironically, it also provides the required physical address needed by law on any e-mail mass-marketing communication.

7. It's relatively safe. The Web is still riddled with security risks. As one commercial for USPS states, letters have the added security of never getting a virus.

8. No one else can transfer the dearly departed.  USPS is the only way to send cremated remains. Aura Neisius, at the Santa Rosa Mortuary, says without the Post Office, their business would be literally "dying."

9. It's how they get paid. Most of the accounts receivable small businesses collect are still “checks in the mail.” Even some electronic payments made by customers actually become mailed checks from the customer's bank.

10. It builds community. There is still a great historical attachment to the post office especially in small towns since no other organization ships to every single address in the country. It has always been a local gathering place for residents. Small-business owners also point out the helpful knowledge of the postal workers. For Joan McCoy, of Little One Books, it’s about tradition. “My grandmother always had a treat for the postman who delivered mail to her door every day. My mother still waits patiently for mail delivery so she can spend time going through the things people sent her.”

In its current form however, the U.S. Postal Service is not sustainable.  As a quasi-government agency, it has to begin acting like a business. It's time to think about raising parcel shipping rates, terminating Saturday deliveries and spinning-off unprofitable post offices into franchises. This gets complicated since the USPS was authorized by the Constitution and it literally takes an act of Congress to make major changes, but with so many small businesses depending on it, the United States Postal Service is worth the effort.

Would your business miss the Post Office if it was shut down? What are you suggestions?

Photo credit: iStockphoto/Thinkstock