Today, the price of a first class stamp increased to $0.42 (a 2.44% increase). Gas responded, “That’s cute” (SNL: 05/10/08).
I’m curious about the impact that fuel and other raw materials has on small businesses. I know a few businesses who use UPS instead of having their own driver for local deliveries. Sometimes product is shipped 2 or 3 times before it’s ready to send to the customer. A UPS fuel surcharge doesn’t change the price to the customer, it just lowers margins for the business.
If you think about it higher costs impact everyone. I wouldn’t be surprised if higher costs for energy (and their impact on other goods) accounted for more than 0.6% of GDP last quarter (the total growth in the economy).
So what do you do? If your demand is sensitive to price changes you may not be able to pass along the additional expenses. If that’s true you’ll need to find ways to become more productive. Otherwise, you’ll keep losing money as oil heads towards $150/barrel. Unfortunately, we all can’t be the USPS who just increases prices as they see fit.
