How can small businesses cut postage costs?
Royal Mail set to increase the price of stamps from April 2012
Ofcom, the new postal regulator, is proposing that Royal Mail will be allowed to set its own prices for first class post. The price of second class will remain regulated by Ofcom. As part of these new proposals Royal Mail could be allowed to increase the price of a first class stamp significantly from April 2012.
Recently, MPs on the Business, Innovation and Skills Select Committee announced an inquiry into these changes. Adrian Bailey, Chairman of the committee, recently told BBC Radio 4’s Today programme, “We will be questioning whether a potential 53% increase in the second class stamp and an uncapped increase in the first class stamp will have anything other than a disastrous impact on traffic. The people who will be hit will be the elderly, the vulnerable, and those on low incomes, but also small businesses as well.”
Is there a cheaper alternative to stamps?
Royal Mail processes 59 million pieces of post a day, 88% of which are sent by UK businesses. The cost of sending mail for SMEs has increased significantly over the last few years. In April 2011, Royal Mail increased the price of a first class stamp by 5p and a second class stamp by 4p.
On February 28th, Moya Green, Chief Executive Officer, Royal Mail, stated in her evidence to the Business, Innovation and Skills Select Committee, on Stamp Price Regulation, that there is an alternative to stamps, metered mail (franked mail); “Customers can change channel; they don’t have to use a stamp, (they can go to a meter mailing and reduce the price anywhere between 15-20% by choosing to go to a meter) ........ if they have sufficient volume and pre-sort they can reduce the price even further ......”
Royal Mail wants to support small businesses with cost effective solutions during this period of economic uncertainty. For businesses still using stamps to send out their mail, there is a more convenient and cheaper alternative – franked mail. Franking machine users currently receive a discount on every item of mail sent, saving at least 7p on every 1st class letter, 8p on every 2nd class.
Franking discounts are a growing opportunity
By keeping the price of franked mail low, smaller businesses are able to afford to send out more post and help generate much needed business. Royal Mail recognised this 7 years ago and introduced the first franked mail discount of 1p on 1st class postage. From that humble beginning, small businesses now benefit from franked mail discounts on 1st class, 2nd class, special delivery and international postage. Currently, for a business sending 15 items of mail a day, a franking machine is an affordable option, as the postal savings will offset the rental and running costs of the franking machine. With Royal Mail’s ongoing commitment to small businesses, this number may very well go lower.
To find out more about the benefits of switching from stamps to franked mail visit Reasons to Choose a Franking Machine