Dec. 25—As many small businesses continue to expand their online footprint, local shops keep getting hit with additional cost increases to ship their products to customers.

The United States Postal Service announced plans to increase the cost of its domestic priority mail medium and large flat rate retail boxes starting Jan. 22 by 5 cents and 35 cents, respectively.

Danielle Fleming, founder and CEO of Noteology in Scranton, who primarily uses UPS and USPS, said repeated price hikes create challenges for the business.

"It's hard for us because we have policies we put in place for the consumers," she said. "On the Noteology brand we do free shipping for all orders over $75, so we're taking on that expense ourselves."

Fleming said UPS and USPS tack on holiday surcharges. The average USPS increases are 6.1% for priority mail and 8.4% for first class from October through January, she said. UPS increased the cost for additional handling for packages by $3 for each item from Oct. 2 through Jan. 14 and raised the large-package surcharge by $30 per item.

"It's really hurting our bottom line," Fleming said. "It makes you have to decide if you want to keep the threshold for offering free shipping at $75 as a perk for customers or move it up to $100 or $125."

The cost of corrugated cardboard has also more than tripled in the past 12 months, Fleming said.

"We used to be able to get a box for 11 cents and that same box can be 35 cents now," she said. "It's become quite expensive to be in business and rates are continuing to rise. "With shipping, every single penny cuts into margins and we either have to absorb it or pass it on to the consumer, and there's only so much we can absorb before it's too much."

Customers pay a flat $15 shipping fee for all orders under $75, but the store must cover the difference for the $18.50 cost for orders going to California, Fleming said.

The company's Olfactif subscription boxes also ship for free.

"We're eating that cost every single time," Fleming said. "We have to fold that in, and it makes our marks go down. We always ship those using USPS because it's much more competitive for 1-pound shipments, but USPS went up this year, too."

Neil Edley, co-owner of Sugar Plum Chocolates in Forty Fort, noted his business has dealt with increasing shipping costs the past two years.

"Everything is going up and it hits the customers," he said. "It just keeps gradually rising and we're just trying to do our best."

Burt Flickinger III, managing director of Strategic Resource Group, a New York-based retail and consumer goods consulting firm, said small businesses face hurdles as they're shipping a record number of products through the post office, UPS or FedEx.

"A big part of the problem is while the cost of gasoline for cars is down about $1.50 a gallon versus the beginning of the year, the price of diesel is still near a record high at about $5.79 a gallon," Flickinger said. "The high diesel prices force USPS, UPS and FedEx to keep (shipping) prices high until the high diesel prices that about 90% of the U.S. trucking fleet run on come down."

Flickinger added the explosion of the biggest diesel oil refiner on the East Coast in Philadelphia significantly cut down on diesel refining capacity and will likely keep prices elevated.

"It doesn't look like there is any mitigating or ending of higher shipping prices in sight," he said.

Contact the writer:

rtomkavage@timesshamrock.com;

570-348-9131;

@rtomkavage on Twitter.