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Table 1
Costs of New Postal Service CMRA Regulations
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Description
Qty.
Hourly
Each
Minimum
Probable
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Assumptions
Estimated number of CMRAs
10,600
Estimated number of box renters
1,500,000
2,500,000
Address-change notifications required per box renter
Customers
10
Prospects
10
Vendors
10
Official or support contacts (IRS, state,
accountant, bank, lawyer, etc.)
10
Total number of notifications required
40
60,000,000
100,000,000
Initial direct costs to box renters
Hard costs for address-change notifications
Letterhead
$0.31
18,720,000
31,200,000
Envelope
$0.28
16,800,000
28,000,000
Ink/toner
$0.02
1,200,000
2,000,000
19,800,000
33,000,000
Postage
$0.33
Subtotal for hard costs
$0.94
56,520,000
94,200,000
Labor costs for address-change notifications
Find name, address, acct. #, etc.
5
$16.84
$1.40
84,200,000
140,333,333
Write/print notification
4
$16.84
$1.12
67,360,000
112,266,667
Address envelope
2
$16.84
$0.56
33,680,000
56,133,333
Insert notice and apply postage
1
$16.84
$0.28
16,840,000
28,066,667
Mail
1
$16.84
$0.28
16,840,000
28,066,667
$16.84
$1.12
67,360,000
112,266,667
Track if notice resulted in proper change
4
Subtotal for labor costs
17
$4.77
286,280,000
477,133,333
34,280,000
57,133,333
Percentage requiring second notification
10%
$5.71
Subtotal for combined notification costs
$6.28
377,080,000
628,466,667
Costs for new office supplies
Business cards per person
500
$28.00
42,000,000
70,000,000
Stationery
250
$78.00
117,000,000
195,000,000
Envelopes
250
$70.00
105,000,000
175,000,000
Invoices
250
$70.00
105,000,000
175,000,000
Bank checks
250
$45.00
67,500,000
112,500,000
24,000,000
40,000,000
Rubber stamp
1
$16.00
Subtotal for new office supplies
$307.00
460,500,000
767,500,000
Subtotal for combined costs to box renters
$558.39
837,580,000
1,395,966,667
-418,790,000
Deduct for boxes not used for business
30%
-251,274,000
Total initial direct costs to box renters
586,306,000
977,176,667
Initial direct costs to CMRAs
Photocopy forms (pages)
5
$0.03
225,000
375,000
Distribute forms to each box (minutes)
1
$10.00
$0.17
250,000
416,667
Explain to/argue with customers (minutes)
5
$16.84
$1.40
2,105,000
3,508,333
Follow up, collect, and file forms (minutes)
10
$16.84
$2.81
4,210,000
7,016,667
Prepare reports and transmit forms (minutes)
5
$16.84
$1.40
2,105,000
3,508,333
Annualized loss of box-rental revenue
15%
$180.00
40,500,000
67,500,000
7,016,667
Annualized additional reporting burden (minutes) 10
$16.84
$2.81
4,210,000
Total initial direct costs to CMRAs
53,605,000
89,341,667
Average cost per CMRA
5,057
8,428
Total initial direct costs to CMRAs and their customers
639,911,000
1,066,518,333
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Sources: The number of CMRAs (10,600) and the figure of approximately 1.5 million renters are from Rodney Ho, "Post-Office's Rule
Incenses Renters of Private Boxes," Wall Street Journal, May 4, 1999. The 2.5 million figure for the number of box holders is based
on the requirement of Mail Boxes Etc., the largest franchiser, that new franchises have a minimum of 250 boxes, multiplied by the
10,600 total for CMRAs, which rounds off to about 2.5 million. The amounts of time needed by CMRA box holders to process address
changes are the author's estimates. The labor costs are based on an annual salary of $35,000. The costs of new stationery, business
cards, and the like are based on the lowest costs and minimum quantities from Kinko's price list. For the CMRAs, it is assumed that
labor costs will be $10 per hour for distribution of forms, done by a CMRA employee. Other CMRA labor costs will involve the CMRA
manager's time, which is assumed to be $16.84 per hour; the same cost is assumed for a small-business owner's time. These are only
direct costs to CMRAs and their box holders.
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