There is one issue which can be quite challenging when it comes to collectibles in almost every category. Shipping costs can be overwhelmingly prohibitive to many aspects within collecting. If you are spending $1 million or more for a sports card, key comic book, historical documents, then you probably don’t care if shipping is $50 for $5,000. But what about the base level of collectors who are spending $2.00 to $10.00 on many items that are classified as collectibles?
There is an entire ecosystem that supports online and retail giants from eBay to Target to Walmart to Shopify to Fanatics to toy companies to Amazon and so on. One part of this ecosystem is shipping. What happens when a collector is searching for a needed (or wanted) item online and the cost of the item is $10 or less? The sales tax is one thing, but the shipping (and handling) cost can skew how effective any sort of collecting can be.
The US Postal Service recently hiked its forever stamp, but the current inflationary pressure means that the U.S.P.S. is still just losing money. Shippers like UPS and FedEx are of course profitable, but if the Postal Service is suffering from higher costs (and UPS and FedEx have some overlapping costs like fuel, vehicles, maintenance and so on – let alone labor), then collectors of all walks of life should probably assume that higher and higher shipping costs are going to become an even greater problem ahead.
Many collectibles that have a price of $2.00 or $3.00 may have a $4.00 or $5.00 shipping cost through eBay and other online sellers.
Now the U.S. Postal Service has reported that its operating revenue rose by some $257 million (up 1.4%) for the latest quarter to $18.7 billion. Unfortunately, for everyone using the mail (including collectors and hobbyists), the USPS still posted an adjusted loss of $459 million for the quarter. This was versus an adjusted loss of $41 million for the same quarter in 2021. Guess what the USPS cited first and foremost before the one-time, non-cash benefit of $59.6 billion due to Postal Service reform legislation — inflation continues to pressure operating expenses…
The USPS continually reports that it is making progress, but the adjusted losses exclude the impact of the PSRA, retiree health benefits expense, non-cash compensation adjustments, retirement amortization, and unfunded pension liabilities.
Now let’s think about First Class Mail and the category for Shipping and Packages that affect online spending and collectibles alike. This was the Postal commentary on these two categories:
First-Class Mail revenue was essentially flat, compared to the same quarter last year, despite a volume decline of 620 million pieces, or 5.1 percent. First-Class Mail volume continued to decline due to on-going migration from mail to electronic communication and transaction alternatives and remains lower than pre-pandemic levels.
Shipping and Packages revenue decreased $85 million, or 1.1 percent, compared to the same quarter last year, on a volume decline of 92 million pieces, or 5.0 percent, compared to the same quarter last year. Shipping and Packages volume remains higher than pre-pandemic levels despite the volume decline compared to the same quarter last year, due to the prior year pandemic-related surge in e-commerce.
And to prove how big inflation is in this Postal report, the term “Inflation” appears 7 times versus 6 times for “Pandemic.” You are free to read through the overall Postal fiscal third quarter earnings report touting delivery times and other issues but the endgame here that collectors should just assume all over again that another round of price hikes will be seen for postage, shipping and handling later in 2022 or 2023 unless anything else changes.