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"Stock Up?" Really? For a Penny Increase?
May 14, 2008
Time to stock up on Forever stamps - Yahoo! News
Sigh, first class postage has gone up from 41 cents to 42 cents. That really doesn't impact me, since I mail maybe two or three things a month (thanks to
online bill pay -- something that hasn't always served me well).
The postal service did something interesting... they offered a "forever stamp" that can be used at any point in the future. So, paying 41 cents NOW is a hedge against future cost increases.
But does that mean you should have hoarded stamps and bought in bulk? This reminds me of classic non-Lean purchasing department behavior -- we got a great deal, so we bought a ton of them. OK, at least stamps can never go obsolete, so that risk is eliminated here with stamps. And, stamps don't take up much "home warehouse" space in a drawer, so that isn't a huge problem.
Let's assume you mail 20 items per month. That's 240 per year... you'd save a whole $2.40 a year by "stocking up" now (spending $98.40 on stamps). That money, kept in a bank account that earns 3% a year, would earn you $2.95.
What if you bought 30 years worth of stamps? That's a complicated calculation, depending on assumptions of inflation rates, generally and for stamps, over time. This article, from the last increase (from 39 to 41 cents), shows how, historically, the price of stamps has actually GONE DOWN when you consider the value of money over time.
My gut instinct tells me the "stock up" plan probably isn't going to save you much money unless you mail a TON of letters (such as a small business).
Who is benefiting from the "stock up" plan? The United States Postal Service:
The post office sold $267,696,023 in Forever stamps in March, up from
$207,900,132 in February and $115,303,031 in January.
Now, they probably "pulled ahead" sales from future months, but that's a nice cash flow difference for the USPS, getting that money now rather than later.
Don't get me wrong... even if a 30 year buy of stamps doesn't make sense, I'm not encouraging "single piece flow" of stamps. It doesn't make sense, from a total cost standpoint, to drive to the post office (or bank or grocery store) every time you need one stamp. Don't believe someone who says it would be "Lean" to do so, if "Lean" means low inventory. Low inventory of stamps would be traded off by the cost and time involved with driving to the store. Gas... now that's something that's REALLY going up in price more than stamps.
Did anyone stock up on stamps? If so, what was the economic case for doing so? Or did you just buy a pack of 20, as normal?
Posted by Mark Graban on May 14, 2008 | Comments (1)
