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. E-retail is a multibillion-dollar industry through which millions of transactions are made via clearinghouses, such as Amazon.com and eBay. The e-retail industry continues to grow and includes on-line sales in virtually every industry. In the U.S., online retail spending for the Q4 2010 reached a record $43.4 billion, up from $39.0 billion in Q4 2009. This accelerated growth rate represented the fifth consecutive quarter of positive year-over-year growth and second quarter of double-digit growth rates in the past year. This trend will likely continue as more online people turn to the internet for their shopping needs, and younger, digital-savvy generations increasingly flex their spending power. Companies like eBay, Amazon.com, and traditional retailers with strong web operations should continue to benefit from this growth. Increases in e-shopping means an increase in the quantity of goods shipped is also increasing. Most vendors have their preferences, which are frequently based on cost. Should the Postal Service take advantage of the increased amount of shipping generated by e-retailers by offering incentives? Yes or no, and why? This blog is hosted by the Office of Audit’s Financial Reporting Directorate.
on Jun 20th, 2011
in Pricing & Rates
| 7 comments
on Jan 17th, 2011
in Strategy & Public Policy, Uncategorized
| 10 comments
Coopetition, is a buzzword cropping up in many business publications these days. Basically, it means that competing firms look for ways to cooperate with each other, rather than compete head-to-head for business. Working in conjunction with the U.S. Postal Service, the United Parcel Service (UPS) now has a program that allows customers of participating retailers to return merchandise by dropping it in any U.S. Postal Service mailbox, or at any post office. The program features a special label that makes the service possible. After a return package is dropped off at a Postal Service location, a UPS driver picks it up and the UPS ground network transports it back to the retailer. UPS, which has its main air hub in Louisville, KY, began testing the service last year with a few retailers and is expanding it because of “positive response.” Some say this is an example of successful coopetition. There are a number of other current partnership programs with competitors. The Postal Service acts as a “last mile” partner for both UPS and FedEx, handling thousands of deliveries. Federal Express performs similar duties for the Postal Service providing air service for Postal Service parcels domestically as well as providing international logistics for the Postal Service’s Global Express Guaranteed service. In certain conditions, coopetition can be a “win-win-win”; helping not only the two businesses, but also the consumer. Do you think these partnerships benefit the public through greater efficiencies or hurt the competitive level? Let us know what you think! This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).
on Dec 27th, 2010
in Post Offices & Retail Network
| 7 comments
It’s a couple days after Christmas and all through the house, still no creatures are stirring. Well, some of us are. After all, it’s back to work for most of us. Postal employees were especially busy this time of year. In the holiday season, the Postal Service delivered nearly 16 billion cards, letters and packages across the country and sent mail around the world. Post Office lobbies were also a busy place, with 97 million customers visiting. But more than 47 million customers skipped the trip to the Post Office this holiday season and took advantage of the Postal Service’s online shipping at www.usps.com. The Postal Service touches everyone regularly, but even more so during the holiday season. We would like to hear about your “Mail Moment” experience with the Postal Service over the past few weeks. What made it memorable? Was it a positive experience? If not, how can the Postal Service improve?