Officials at West Chester-based Frontgate have been bracing for Sunday's postage-rate increases probably more than most Tristate businesses because they'll likely feel it more than most.

        The luxury catalog and Internet company relies on the U.S. Postal Service to deliver more than 30 million Frontgate catalogs every year. “It's a pretty substantial part of our business,” said Daniel Lally, Frontgate's director of public relations.

        The company expects its postage costs to jump 3 to 4 percent because of the rate increase, Mr. Lally said.

        But the company will absorb the added cost through existing revenues and will not pass it on through higher prices for its products, Mr. Lally said.

        The price of a first-class letter jumps one cent Sunday.

        Most other classes of mail also are going up, postal officials said. The rate boost, the first in two years, will allow the Postal Service to cover some of its own costs.

        The Postal Service lost money in fiscal 2000, its first loss in five years. It's citing increasing fuel costs and other operating expenses as the reasons for the hikes, the first since January 1999.

        “The average increase across all classes of mail is 4.6 percent,” said Bonni Manies, spokeswoman for the Postal Service's Cincinnati district. The post office “is impacted by everything that a regular business (faces). Every time the price of gas goes up a penny, it costs the Postal Service $5.6 million annually.”

        When the last increase came about, people bought more 1-cent stamps than they needed, causing temporary shortages in some areas. That shouldn't be a problem this time.

        A spokesman said the agency has sent an avalanche of stamps to its 38,000 offices across the country, shipping 4 billion 1-cent stamps to help people use up their leftover stocks of 33-cent stamps.

        In addition, some 7.6 billion stamps worth 34 cents each went on sale Dec. 15.

        Because they had to be printed in advance, these stamps — featuring the Statue of Liberty, flowers and a flag flying over a farm — do not show a price.

        The stamps are available on the Internet at http://www.usps.com, at post offices and supermarkets and by phone at 1-800-STAMP-24.
       

Mailings adjusted

        With a rate increase, businesses tend to redesign their mailing pieces and the way they mail, officials say.

        “It impacts people's businesses — they have to rethink,” Ms. Manies said. “They rethink the way that they present their mail, and they always manage to take advantage of the best rates.”

        Amity Unlimited Inc. in Lockland, does direct mailing for more than 2,000 companies and organizations. Amity has warned its customers that they will likely face higher postage costs. But the company doesn't expect the increase to have a large effect on its business.

        “We haven't heard anything drastic from our customers that because of this, they're going to quit mailing,” said Bob Janszen, Amity president.

        “It's going to have to be taken, and it's going to have to be passed on.

        “I don't see anything monumental. This is the normal cost of doing business. This is not a shock. This is known.”

        The upside of the rate increase: the possibility of better postal service.

        “The post office is doing a great job giving us great service,” Mr. Janszen said. “They have done just a fantastic job of delivering the mail to the homes, delivering it quickly and on time. The people adjusting these rates have tried to do it on a businesslike basis.”
       

Turning elsewhere

        Still, some advertising and communications executives think postage increases might lead some businesses to turn toward the Internet to get their messages out.

        “It can only help,” said Tim Fening, vice president/creative director at Bridge Agency, downtown. “It certainly will not take business away from commercial Web sites.”

        A large chunk of the full-service advertising agency's business is developing and maintaining full-service Web sites, Mr. Fening said.

        The postage increase is not expected to be a problem for Bridge because the agency does direct-mail campaigns infrequently, and then only to small, select audiences.

        The rate increase could play up the strengths of downtown advertising agency Northlich, which uses various media to give clients the strongest impact.

        “We have been working with our mailers to consider all forms of direct marketing,” said Paul Courtemanche, vice president of Northlich's direct marketing unit. “It puts out the "mailing smarter' type of attitude. Let's be smart about this.”

       The Associated Press and Bloomberg News contributed to this report.
       

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