Postage Costs

[tezza12]

Postage Costs are crippling for ecommerce sellers. What is the best option for postage, I generally send a large or medium packet weighing between 150g and 600g. What would be my cheapest option, It cant be the post office, can it.

 

[kulture]

The cheapest is the Royal Mail.

 

[JonSmith1]

Do you spend more than £5000 on postage or send more than 5000 items a year?

 

[tezza12]

I dont spend more than 5k at present, but will do, am averaging £300 week so just say £300 over 35 weeks well that over 10k already
and no not 5000 parcels as yet.

 

[JonSmith1]

You need a PPI account. Are you VAT registered?

Google royal mail PPI and have a read.

 

[smo]

Royal mail are still cheapest for sub 750g bracket by some margin. We spend over £30K now on parcels in that bracket and sadly no-one can beat RM on price even with their price hikes.

 

[tezza12]

Do you have a ppi account smo.
No i am not VAT reg as not at that threshold yet, do you need to be to get a ppi account then, And will royal mail give them to any business, on projected figures.

 

[Deleted member 135299]

The only thing you can really do, is get a franking machine to frank you mail, this will cut a little down on the cost, and try and post as many things as you can in large letter rate.

James

 

[smo]

Do you have a ppi account smo.
No i am not VAT reg as not at that threshold yet, do you need to be to get a ppi account then, And will royal mail give them to any business, on projected figures.

Yes we have a PPI account, have had for as long as I can remember, it certainly helps keep the costs lower but its still cripplingly expensive as we dont charge any postage on our orders.

Your best bet is to get in touch with RM and ask about opening a PPI account, the chances are you would be approved. You would benefit being VAT registered as VAT is now charged on most products so if you could claim it back you would save considerably.

 

[kulture]

Do you have a ppi account smo.
No i am not VAT reg as not at that threshold yet, do you need to be to get a ppi account then, And will royal mail give them to any business, on projected figures.

You do not need to be VAT registered to get a PPI account.

Yes they do accept projected figures. If you say you are posting 80-100 parcels a week, and you expect this to increase over say Christmas, then they will give you an account. They tend not to check your actual volumes. It costs £750 a year for them to collect from you daily, or you can take the sacks to the sorting office yourself. They supply the sacks, the sack ties, and most stationary you may need.

 

[smo]

To add to Kultures comment about collections, when you get to £15,000 (IIRC) spend daily collections become free!

 

[kulture]

To add to Kultures comment about collections, when you get to £15,000 (IIRC) spend daily collections become free!

That's £15,000 per year.

 

[smo]

Indeed, 15K a year to get free daily collections.

(a comma would have helped my post be clearer!)

 

[petersoftware]

Be careful if looking at franking machines. There are lots of hidden costs if you buy from wrong supplier. Take a look at:

http://www.mailroomnews.com/articles/2579/The-Hidden-Costs-of-Franking-Contracts.htm

 

[IanDade]

We have always used Royal Mail for such parcels on a PPI account. They have been the most costs effective for a long time and the service is good.

Recent prices hikes and the new T&C where Recorded and Standard mail posted on account is no longer insured for damage or loss prompted us to look for an alternative solution.

The best we could come up with was an option by myHermes which could send the goods, up to 1kg, with a signature, but on a 2-3 day service and insured up to £25 for £3.60+VAT

However, having read some reviews on them on this and other forums, we decided against it and have continued using the Royal Mail services.

To be fair to RM, the instances of loss and damage that we incur is very, very low. We have had the need to claim for only 5 parcels in the past year and that would equate to well below 0.05%.

However, it seems crazy to me that they stopped this insurance as it is the smaller business who rely on this that lose out, but i guess while they have the complete monopoly on this lucrative section of the market they can do what they want and we have to roll with it.

At the end of the day, it is the retailers who loseout again as no one is going to risk negative publicity by not refunding their customer or sending another item to replace the one lost or damaged, but this retailer has no way of claiming this lost money back from the people who lost it.

 

[danny156]

We have always used Royal Mail for such parcels on a PPI account. They have been the most costs effective for a long time and the service is good.

Recent prices hikes and the new T&C where Recorded and Standard mail posted on account is no longer insured for damage or loss prompted us to look for an alternative solution.

The best we could come up with was an option by myHermes which could send the goods, up to 1kg, with a signature, but on a 2-3 day service and insured up to £25 for £3.60+VAT

However, having read some reviews on them on this and other forums, we decided against it and have continued using the Royal Mail services.

To be fair to RM, the instances of loss and damage that we incur is very, very low. We have had the need to claim for only 5 parcels in the past year and that would equate to well below 0.05%.

However, it seems crazy to me that they stopped this insurance as it is the smaller business who rely on this that lose out, but i guess while they have the complete monopoly on this lucrative section of the market they can do what they want and we have to roll with it.

At the end of the day, it is the retailers who loseout again as no one is going to risk negative publicity by not refunding their customer or sending another item to replace the one lost or damaged, but this retailer has no way of claiming this lost money back from the people who lost it.

Did you / has anyone looked at UKMail or anyone like that

They always say they can beat RM prices but I haven't had chance to look into it yet?

 

[kulture]

If they can beat £1.63 plus VAT for parcels under 750gm let us know. I doubt they will though.

 

[IanDade]

Did you / has anyone looked at UKMail or anyone like that

They always say they can beat RM prices but I haven't had chance to look into it yet?

When you say UK Mail, i assume you mean their postal arm, not the parcels.

There service is a downstream service which means they are still delivered by the Royal Mail, but a 1st Class package takes 2-3 days.

Basically, UK Mail take your post, lump it together with all their other clients post and then sort it into postcodes. They then deliery it to Royal Mail and because it is sorted they get big discounts as they have done part of the Royal Mails job for them. Hence then have delivered it Royal Mail "down the processing stream"

Cheaper price but slower service and still tied into RM's T&C's.

 

[smo]

UK mail and the other downstream service providers only work on bulk - you cant have an account for a few letters a day here and there, you need to send thousands. We use them for bulk mailings through our mailing house but have to use RM for the rest.

 

[perpixon]

I am still surprised at how many sites offer free shipping on all orders, when you also add the cost of the packaging and labour I really can’t see how free shipping is viable for many companies. I wonder how many have actually looked at the full true cost of P&P compared with a fear base of ‘well others do it so I must too’.

 

[IanDade]

Sorry!! Posted same reply twice. Early start this morning!!!

 

[IanDade]

I am still surprised at how many sites offer free shipping on all orders, when you also add the cost of the packaging and labour I really can’t see how free shipping is viable for many companies. I wonder how many have actually looked at the full true cost of P&P compared with a fear base of ‘well others do it so I must too’.

One of the most common questions we get asked by prospective customers is "What do you think i should charge for postage?"

This would suggest what you say is correct, people are still not considering the cost of getting the product to the customer, they just look at the cost price against selling price of their competitors.

We always advise people that they need to ensure that they have covered ALL costs and that they still have sufficient margin AFTER postage/delivery costs to make the sale viable.