| Questions 161-164 refer to the
following report. The Postal System has announced that postal rates are going up yet again. On the first of the year, the price of a first-class stamp will rise by 8 cents. Express mail and priority mail rates will increase by 20 percent. The rates for third-class mail will also go up, while the special book rate will be entirely eliminated. Special services such as Delivery Confirmation, Return Receipt, and Overnight Delivery will also cost more, and it has even been announced that rental rates on post office mail boxes will increase. Everybody everywhere will be paying more for postal services next year, but one sector will be particularly hard hit. Direct-marketing companies rely on the postal system to carry out their business. These companies include catalog houses as well as sellers of mailing lists. Postal services account for a significant percentage of their costs. Direct-marketing companies say the proposed increases in postal rates will hurt their industry and will likely even drive some into bankruptcy. "Our business is carried out almost entirely through the mail," says Esther Bergen, president of Mega Marketers, Inc., one of the largest direct-marketing companies in the country. "Of course these increases will hurt us. They will have a huge effect on the way we do business." Direct-marketing companies rely mostly on third-class mail, which is expected to have rate increases as high as 30 percent. Will this mean less junk mail arriving at your doorstep? "Possibly," says Bergen. "But the more likely outcome is that the smaller companies, which will have more difficulty absorbing the costs of the rate increases, will go under, while the larger companies will stay in business and take over the markets now covered by the smaller companies. There will probably be some increases in prices of mail-order products, but not enough to drive the average consumer away." |