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Royal Mail Price Increase 2013

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paretowasright

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Jan 2, 2009
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So no doubt you have all been getting the pre warning letter through.
I am just wondering what OFCOM will let them get away with this year after the huge rises last year?...one would hope inflation only but won't hold my breath.

I have a theory they are going to try and whoop up large letter rates but I hope I am wrong :(
 
...and everyones harping on about the death of the high street.

Watch Royal Mail kill off internet business with a massive rise in prices for small parcels. £5 an item for anything bigger than a letter I bet!
 
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paretowasright said:
Call the Daily Express with that one but I suspect OFCOM will be sensible :)
Click to expand...

We're already at £1.95 for some of our small parcels. A jump to £5 wouldn't be beyond belief for me. Think ours jumped 30p a parcel the last time because of the change between 250g and 750g or something.
 
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Royal Mail need to make a profit you know - otherwise how else will the Government privatise and sell shares in RM back to the people who already own it in the first place! The UK Public!

Then watch prices rocket upwards! (that will help retailers)
 
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british steve said:
Royal Mail need to make a profit you know - otherwise how else will the Government privatise and sell shares in RM back to the people who already own it in the first place! The UK Public!

Then watch prices rocket upwards! (that will help retailers)
Click to expand...

It won't actually help anyone except RM in the log run.

Sent from my Galaxy Nexus using Tapatalk 2
 
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Geoff T said:
Maybe this will force the old-style professions to "get with" modern (legal, etc)... about time too.. get the legal up to speed - quick time - and then royal mail is redundant!
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Geoff sorry could you please explain what you mean?
Yes Royal Mail have something of a Monopoly but without a viable alternative on small packets/parcels the only control in place is OFCOM to avoid abuse of a dominant market position.
 
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Oh joy, i've not had my pre-warning of a sh*fting letter yet but I can't wait for another shockingly large rise to kill off small businesses who send letters and packets.
 
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It is a very competitive market place

You do not have to use Royal Mail

Just use one of the cheaper services

Ah but RM is the cheapest for small packets - so what does that tell you

I am not saying that it is good news - personally I would like to be paying 1p per large packet or even that they should be paying us for the joy of delivering our post (lol) - just that maybe the price is actually quite fair allowing for the marketplace and we have all been having it good while RM has lost money for years

Now they are doing serious volumes on small packets they are starting to get an idea of what the real cost of handling these items are
 
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Just joined this forum to send a warning.
Had a quick chat with a TNT account manager. No it was not about joining TNT, as we already have part of the work carried out with them, so info seems genuine.
He said they just received wholesale price rises for packages... between 38% and 40%.
Apparently the usual 30 days notice will hit us in march.

I feel a Downing Street petition brewing.
 
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wayzgoose said:
Everyone's in the same boat so it's a level playing field for all really.
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If only this were true, but when did you plast pay what it costs to get something delivered from Amazon?

Their free shipping is one (possibly the main) reason they thrash everyone else.

How do they do it?

Well for starters they sort post before shipping it making Royal Mail's job much easier,

but also I sometimes wonder if they aren't being subsidised by the rest of us.
 
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What I meant was it's a level playing field for all smaller sellers. You're never going to be able to compete with the likes of Amazon. Good job not everyone shops on Amazon.
 
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wayzgoose said:
What I meant was it's a level playing field for all smaller sellers. You're never going to be able to compete with the likes of Amazon. Good job not everyone shops on Amazon.
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unfortunately not.
Royal mail discount very high volumes so the small businesses as usual feel the most pain. Larger businesses with more staff and larger warehouses can also zone sort to postcodes and save a further 30%.

Small businesses get a calender.
 
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wayzgoose said:
Everyone's in the same boat so it's a level playing field for all really.
Click to expand...

In theory yes. In practice not so. A lot of companies will continue subsiding free delivery in order to retain customers or simply because they don't notice the price hike until much later on.

I think some companies get a deal when using a franking machine, they use it on credit so they won't notice the increase until months after the very small retailers start paying for it.

The last increase in postage saw very few of our competitors change their pricing. Only a few changed to either paid postage or a small increase in the price of the product.

Amazon will be rubbing their hands with glee as they can now undercut all of their market place traders. They've already hoovered up a dozen more products that we sold through them, they've now got them with next day delivery and a cheaper price than we can offer :( darn it!!
 
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Esk247 said:
In theory yes. In practice not so. A lot of companies will continue subsiding free delivery in order to retain customers or simply because they don't notice the price hike until much later on.

I think some companies get a deal when using a franking machine, they use it on credit so they won't notice the increase until months after the very small retailers start paying for it.

The last increase in postage saw very few of our competitors change their pricing. Only a few changed to either paid postage or a small increase in the price of the product.
Click to expand...

Those are all options open to all - whether to implement them or not is up to individual businesses.
 
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wayzgoose said:
Those are all options open to all - whether to implement them or not is up to individual businesses.
Click to expand...

So rises in postage aren't an issue for us then? :|

I must of been running the business wrong for the last 3 years. Thought the cost of sending products to people had an effect on our income. Clearly it doesn't.
 
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No, they are not really an issue. Every other small business selling the same as you is also going to have to charge their customers to have orders delivered. So what's the difference whether it's £1 or £10?

We've been selling on the internet since 2000 and can truthfully say that sending a product does not affect our income.
 
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Every other business isnt selling the same, there would be no USP if we were all in the same boat doing the same thing.

We will be hit with a double whammy with another price increase, not only do we currently offer free postage which is a big squeeze on margins but increasing stamp prices means decrease in people writing letters etc. and so a decline in orders.

Free postage is historically a big draw for orders in mail order and internet markets and to remove that would then put off some customers, others will simply baulk at a price increase which is clearly covering the postage increase - a lose lose situation!

I find it very hard to see an positive effect on business, a 40% price increase and then a fuel suppliement on top could go a long way to finishing our very sucessful 21 year business.
 
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my Royal Mail collection man thinks the 38% to 40% rise will be just for TNT .He says they only pay £0.13 for a letter , undercutting royal mail, then get it delivered by royal mail.
I would be suprised if it was just for TNT, as the monopolies commission may have a problem with that, but we'll see in 4 weeks.
 
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jaspat25 said:
my Royal Mail collection man thinks the 38% to 40% rise will be just for TNT .He says they only pay £0.13 for a letter , undercutting royal mail, then get it delivered by royal mail.
I would be suprised if it was just for TNT, as the monopolies commission may have a problem with that, but we'll see in 4 weeks.
Click to expand...

Well you said it was a TNT increase for packages rather than letters.

As I understand it Royal Mail are trying to focus more on parcels and I think they might be looking to offload letter business to TNT. So it would make sense that they increase wholesale cost on packets if they want more of this business direct.

I'd be surprised to see significant additional increases on RM packets, otherwise they risk sacrificing market share to their competition. Time will tell I guess.
 
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Hi,

Has anyone one been able to fully understand the latest mailing from RM about the new parcels service parcel 24 and 48?

I am GUESSING 24 and 48 replace 1st and 2nd class but its far from clear and could be additioanl services.
 
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I got the new "exciting services coming soon" mailout today as well.

My read on it is they're looking to create new services that are effectively the same as existing ones but that can't be directly compared so the changes to pricing will be harder to "prove"(?) if that's the right word for it.

My primary concern with the changes is whether the definition of "packages" is going to encompass what we currently know as "small packets".

The changes last yes on weight bands 0-100 > 250 > 500 > 750 becoming 0-750 was a big painful jump so if the next step is to push them into "packages" and then claim even higher costs it's going to really hurt.

It's all supposition, guesswork, etc.. but a 30 day notice period is less than ideal...

My guess is that if you're serious about small packets and avoiding a lot of pain, you may want to explore tracked options while you can... I'm hoping that's the one thing that might take the edge off but I'm not holding my breath. :(
 
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wayzgoose said:
No, they are not really an issue. Every other small business selling the same as you is also going to have to charge their customers to have orders delivered. So what's the difference whether it's £1 or £10?

We've been selling on the internet since 2000 and can truthfully say that sending a product does not affect our income.
Click to expand...

Well as SMO says, that's a slightly different way of working it. We don't charge for postage as non of our competitors do either. If we start charging postage our sales drop to zero instantly. We've tried it. People prefer an all inclusive price for the products. So we have to absorb the postage costs or raise prices. if we raise prices we have to do it after our competitors do but they might not realise until 30 days later when they get an invoice for the postage they've used.
 
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Ok... my fears have been realised but I'm unsure at this point exactly what this will mean for contract customers (like me).

If you haven't already you need to read this:
http://www.royalmailgroup.com/sites/default/files/Schemes Consultation_ Parcels and Compensation.pdf

The critical bits of information in particular are:


18. The new parcel formats will supersede the current 'packet' format for 1st Class and 2nd Class items.
Click to expand...

19. The parcel formats will be called 'Small Parcel' and 'Medium Parcel'
Click to expand...

You also need to look at the parcel dimensions for each but the quick version is:

Small Parcel 450mm x 350mm x 80mm with a weight up to 2Kg
Medium Parcel 610mm x 460mm x 460mm with weight up to 20Kg


In short, Royalmail appear to have stacked the odds against the bulk of small packets with any real depth to them.

Not great news..

I'm waiting for more information on the contract side of things as this is not discussed in the linked document but for additional comment on the topic this might be useful:
http://tamebay.com/2012/12/royal-mail-aim-to-scrap-standard-parcels-by-april-2013.html
 
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I read it as 1st and 2nd were being replaced by 24 and 48 hour but don't really get it but having to measure and weigh every parcel is going to take more time, but most will most likely be classed as medium parcels which i bet will be alot more than what we are paying now. Anyone know when they are actually releasing these new prices?
Thanks
Lianne
 
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Some more info I go from RM on Friday is that recorded delivery is going to be integrated instead of an 'add on service'....ie instead of it being + 0.95p they will have '1st class recorded small packet under 100g' (or perhaps 24/48)
I have no doubt this will be a way of inflicting an above inflation price increase by renaming a product/service ;)
 
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Oh no! I hadn't heard about this we are still suffering from the last price hike. Your right they are really hitting ecommerce business, that is now their cash cow, I had figured that out from the last hike/reformatting. However I didn't think they were going to try and milk it more so dramatically and quickly.

This is not good news, I hope someone can start competing for small packets and give them a run for their money it is a large ball to push but the market is wide open for ecommerce support.

This makes me want to move over to the US even more, doing business over their is just so much easier with lower import taxes and shipping costs. As if we didn't have enough issues with UK trade!! :mad:

Okay that me off my soapbox for now lol, hissy fit over!!
 
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Guys,

I'm not sure what will happen with franking prices but there has been an INCREASE in the saving over the last few years, including it more than doubling last April..

I work for Pitney Bowes and supply the smaller machines into SME's.. I know as much as you guys about the increase (Nothing) but if it does affect you and your are fed up of stamp prices.. look at alternatives..

message me and I can provide you with my contact details,

contact me if I can be of help!
 
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Hmm... ok, this is getting interesting...

Contacted my account manager today and while I'm waiting on confirmation it seems RM are, for now at least, leaving contract services alone:
http://royalmail123.com/qa_royalmail24and48.html

Will the size and weight restrictions change on Royal Mail 24 and Royal Mail 48?
There is no change to the specification of this service
Click to expand...
Bear in mind this is for the contract services sending out more than 1,000 parcels (what you might have called packets) a year.

The clue, as near as I can tell is in the way that OBA codes are changing, or rather, how they are changing the names/labels but the codes themselves are remaining the same.
Ref: http://royalmail123.com/infocentre_obausers.html

So, it actually seems possible that we may not be getting hit with a big ole' price hike with some stealth product definition changes.


If true, it'll be one heck of a relief but I can't help but wonder when/if it will strike and just as importantly, if the changes are coming in, those of you using your post office counter to send small packets will probably want to be talking to RoyalMail pretty darned quick to see if you can avoid the impending changes...
 
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The OBA code looks to be staying the same (CRL) but the service we select from there will change to the new 24/48 choices and the price will no doubt rise considerably.
 
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Looks like I'll actually have to offer items that fit into these sizes, so for instance a popular play sword for musketeers will have to go as it's too long.

I'll have to look at all my packaging and get rid of boxes which don't fit before it comes into play.

I'm off to see how much I can squeeze into a 'small parcel'.
 
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smo said:
The OBA code looks to be staying the same (CRL) but the service we select from there will change to the new 24/48 choices and the price will no doubt rise considerably.
Click to expand...

The 24 and 48 still seem to be the same delivery time promise as 1st and 2nd class so depends if OFCOM view the rebranding as something new or not. The pure fact they have changed the name does tend to indicate a nice price increase coming. Its just classic rebranding all FMCG companies do it...smaller packs for same prices, new models, better improved etc etc...we will have 'packet post Ultra' next year arriving within 1 hour for just £50 :)
 
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