Steve Jobs was famous for the ingenious simplicity of his designs. And, of course, his single button iPhone, now the standard in smart phoning, is a great testament to the value of simplicity.

As in design, simplicity in pricing, and a related simplicity of choices, are appealing to consumers. There is even empirical evidence that consumers will buy more when they aren’t overwhelmed with too much clutter and too many choices.

The U.S. Postal Service has enjoyed some success with simple pricing. The best example is the Flat Rate Box. The combination of uncomplicated messaging – “If it fits, it ships” – and ease of use – a handful of shape offerings, each with a single price attached to it – have made the Flat Rate Box a critical piece of the Postal Service’s growing package business.

And so far, the Postal Service is sticking primarily with weight-based pricing for packages, and not introducing any further dimensional (DIM) weight package rates. FedEx and UPS both just moved to the more-difficult-to-calculate DIM weight pricing scheme on ground shipments.

Still, most Postal Service pricing is far from simple. There were 8,779 different package prices alone in fiscal year 2014, up 22 percent from two years earlier. Of that total, a quarter are retail prices and three-quarters are commercial prices. Furthermore, nearly 1,100 Parcel Select prices are not used, and 5,840 prices for packages weighing more than 20 pounds are never or rarely used. We recently looked at package pricing at the Postal Service and found its complexity might intimidate customers. We urged the organization to consider eliminating prices that are rarely or never used. We also suggested periodic evaluation of market demand to see if it makes sense to introduce other Flat Rate products.

But, it’s also worth considering whether pricing can be too simple, at least for commercial customers. While individuals welcome pricing that’s easy to calculate, businesses that ship large volumes can benefit from a range of options, which gets them closer to customized pricing. It also helps them shave off every possible penny of shipping expenses. And, of course, some degree of complexity is necessary so prices appropriately reflect costs. Such is the case with zoned rates for Priority Mail, because packages traveling across regions or zones cost more to deliver than those moving within a zone.

So, turns out pricing simplicity may not be quite that simple.

Do the Postal Service’s pricing options meet your shipping needs? Do you find pricing too complex? Or, do you wish there were more options? Should the Postal Service introduce more Flat Rate Box or other specialty packaging items? 

Comments (6)

  • anon

    WhT is the weight limit for shipping packages from crystal river Florida to Salisbury vermont

    May 29, 2017
  • anon

    As we know that shipping costs are so complex and its not that much easy to calculate the price which make customers very sick. so there must be flat rate shipping so that its easy to understand.

    Jun 02, 2015
  • anon

    this clarified something. i thought they -clerks- enter the zip code and weight and then derive the price. similar to calculating postage online... i bet this could get confusing especially with software glitches and slow connections... Yikes

    Apr 02, 2015
  • anon

    From a customer service perspective it is impossible to answer the basic question of "How much to send this" without a pos terminal. From the commercial perspective when cost variables are within a key strokes reach the cost best serves the sender and unfortunately is also ripe for abuse. There is no cut & dry measure that can address the idiosyncratic public we serve. If it fits it ships may be simple in theory but still complicated when associated with the various zone changes. Commercial Base Pricing benefits the business but remains unverified to the delivery person since the matrix is not able to be scanned or even audited allowing an honor system on customer derived postage and this is not allowed to the general public who still must weigh and pay at a retail window. If we level the playing field, treat the post office as a universal service and assign costs in parity there would be less confusion and more acceptance

    Jan 26, 2015
  • anon

    The large flat rate box should be the same size as the number 7 box. Adjust the price accordingly. You need to eliminate the regional A, B and C boxes. It is too difficult to explain how to use them to retail customers. The rate fold 123 needs to have more than one version. There should be one strictly for retail prices that we can hand to customers or put all the retail info in the front so that we could tear them out for retail customers. The current version includes all of the various price structures that the average consumer can't use.

    Jan 26, 2015
  • anon

    To my disappointment, It seems Regional A & B have been eliminated from Click N Ship though boxes are still available to order online. Can anyone tell me where I can purchase this service without having to pay a fee to a retail shipping center? *I have a personal and business USPS account.

    Jan 21, 2016

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