Royal Mail to USA

[Scottishgifts4u]

The USA has threatened to pull out of the Universal Postal Union, where prices/services are reciprocated between countries, and the US from 1st July is setting it's own (much higher) prices

Net effect is that Royal Mail have to set up a "World Zone 3" especially for USA and they now are blocking any letters and large letter with a commercial value from July 1st

Here's the new rates (replacing the old rates that were only in place for 3 months)...
https://www.royalmail.com/sites/roy...al-mail-our-prices-valid-from-1-july-2020.pdf

I used to use RM all the time for my website but those prices are just crazy.

 

[Mr D]

We will be selling. Just getting buyers to pay the new rates.
Not as if they have any choice if they want the products.

 

[DontAsk]

That link does not work. This one works better https://www.royalmail.com/sites/roy...l-mail-our-prices--valid-from-1-july-2020.pdf

Note also that the CN22 form has changed, depending on whether you use a normal or a guaranteed service. Existing stocks can be used up.

Does anyone have a link to the restriction on letters with commercial value?

 

[bode]

The USA were right to threaten to pull out of the postal union. They eventually came to a deal which meant that a last mile tax was implemented by USPS. As someone whose half his business goes to the USA, this is personally disastrous for me. A parcel on an IE1 Royal Mail code was costing £5.42, is now costing £10.10.

It costs a Chinese seller about 3 pence to post his small parcel to the UK or USA. WE foot the bill, when Royal Mail have to pay for the real cost of delivering to all of the UK postcodes. When eBay and Amazon invited Chinese sellers onto our marketplace, we were expected to compete and put up with the yearly increasing postage costs.

If Boris had the same balls as Trump to impose a tax on Chinese sellers, we would all be better off and Royal Mail could recoup their costs. So the next time everyone complains about Royal Mail price hikes, think about the £1.50 with free delivery ebay purchases you all made.

 

[Mr D]

The USA were right to threaten to pull out of the postal union. They eventually came to a deal which meant that a last mile tax was implemented by USPS. As someone whose half his business goes to the USA, this is personally disastrous for me. A parcel on an IE1 Royal Mail code was costing £5.42, is now costing £10.10.

It costs a Chinese seller about 3 pence to post his small parcel to the UK or USA. WE foot the bill, when Royal Mail have to pay for the real cost of delivering to all of the UK postcodes. When eBay and Amazon invited Chinese sellers onto our marketplace, we were expected to compete and put up with the yearly increasing postage costs.

If Boris had the same balls as Trump to impose a tax on Chinese sellers, we would all be better off and Royal Mail could recoup their costs. So the next time everyone complains about Royal Mail price hikes, think about the £1.50 with free delivery ebay purchases you all made.

Be careful what you wish for. A tax on Chinese sellers can quickly lead to a tax on foreign sellers. And then a tax on UK sellers.
Nothing a government likes more than a tax that will gain them votes.

And presumably you as a major foreign seller would not want governments getting the idea they can tax foreign sellers even more!

My bestselling US parcel just went from a little under £9 to over £25 - factoring in the extra ebay, paypal and webinterpret fees.
But hey, someone is making some money on the deal!

 

[bode]

Well, the EU have already imposed VAT on every digital transaction recently. 3 lots of VAT per sale on my particular marketplace. I don't see an issue levelling up the playing field with regards to China Mail post entering the country. They are not Namibia, yet treated as if they are.

 

[Mr D]

Well, the EU have already imposed VAT on every digital transaction recently. 3 lots of VAT per sale on my particular marketplace. I don't see an issue levelling up the playing field with regards to China Mail post entering the country. They are not Namibia, yet treated as if they are.

Be careful demanding a level playing field. You may get one much to the regret of other sellers and consumers.

Perhaps instead get the Chinese government to stop subsidising stuff. Or get royal mail to cut its costs so it can have a more realistic delivery price.

 

[Chris Ashdown]

There is a postal contract (The Universal Postal Union established by the Treaty of Bern of 1874) that specifies different prices for different countries around the world, set up many years ago, with the aim of basically letting the third world countries send letters to say the UK at a cost that relates to the cost of living in the third world country

Trump has been fighting for a realignment of these agreements over the last 18 months to allow for say china which until the 1970, was a low income country to now pay the correct rate for its new status

As he has had little success in changing the agreement he has acted, which hopefully will force change around the globe to a new reassessment of all postal rates

See https://www.google.co.uk/search?new...j33i22i29i30k1j33i21k1j33i160k1.0.iKJMRD0Rj5E

 

[Deleted member 59730]

There is a postal contract (The Universal Postal Union established by the Treaty of Bern of 1874) that specifies different prices for different countries around the world, set up many years ago, with the aim of basically letting the third world countries send letters to say the UK at a cost that relates to the cost of living in the third world country

Trivia fact: One of those negotiators was the Victorian novelist Anthony Trollope.

 

[Mr D]

There is a postal contract (The Universal Postal Union established by the Treaty of Bern of 1874) that specifies different prices for different countries around the world, set up many years ago, with the aim of basically letting the third world countries send letters to say the UK at a cost that relates to the cost of living in the third world country

Trump has been fighting for a realignment of these agreements over the last 18 months to allow for say china which until the 1970, was a low income country to now pay the correct rate for its new status

As he has had little success in changing the agreement he has acted, which hopefully will force change around the globe to a new reassessment of all postal rates

See https://www.google.co.uk/search?new...j33i22i29i30k1j33i21k1j33i160k1.0.iKJMRD0Rj5E

And the fact the American people get to pay for all this change is the icing on the cake.

Next thing he'll be talking about getting Americans to pay for his trade disputes and his wall across the small border.
He appears to have no problem getting Americans to pay more.

 

[Mr D]

Trivia fact: One of those negotiators was the Victorian novelist Anthony Trollope.

Never heard of him. Perhaps not a great novelist.

 

[thetiger2015]

Perhaps instead get the Chinese government to stop subsidising stuff. Or get royal mail to cut its costs so it can have a more realistic delivery price.

Neither of those things will happen though.

China want global market share of every conceivable market. They'll get it.

Lots of suggestions in the UK about a digital tax on all internet businesses. Guess who won't need to pay it? Sellers from China.

Royal Mail prices have gone crazy of late. Anything bigger than a letter now costs more than its ever done - so when they say 'internet sellers should pay a tax to save the high street' <<<<< sorry, what! They do pay taxes. VAT, Corporation Tax, Business Rates, PAYE related costs, shipping fees (not always covered by the customer), packaging costs << most high street shops don't need to wrap things in eco bubble wrap and cardboard boxes, with tape and delivery labels.

Running an internet business, from a small warehouse, is just as costly as running a high street shop. Where there's a saving on rates/rent, that's eaten up by additional packaging and shipping costs that high street only stores don't deal with. An extra internet tax will just push people back toward China imports - especially now they seem to be arriving super quick!

 

[Mr D]

Those things may not happen - they are still the easier options that don't mess up other UK sellers business though.

I've run an internet business from a small warehouse. Far, far cheaper per year than friends running a shop based business from a shop.
Small shop, 20 sq metres, £19k in rent and rates. My warehouse, 5 times bigger had less than a third of the cost.
Additional packaging and shipping costs - hopefully you are getting customers to pay that in some fashion, same way the shops get the customers to pay the staffing, utilities, business rates etc.

An extra internet tax will get treated the same way other taxes are. Passed on to the customer (higher prices) or passed on to the staff (lower pay rises / less perks).
Rarely gets passed on to the owners. They still want a profit!

 

[thetiger2015]

Those things may not happen - they are still the easier options that don't mess up other UK sellers business though.

I've run an internet business from a small warehouse. Far, far cheaper per year than friends running a shop based business from a shop.
Small shop, 20 sq metres, £19k in rent and rates. My warehouse, 5 times bigger had less than a third of the cost.
Additional packaging and shipping costs - hopefully you are getting customers to pay that in some fashion, same way the shops get the customers to pay the staffing, utilities, business rates etc.

An extra internet tax will get treated the same way other taxes are. Passed on to the customer (higher prices) or passed on to the staff (lower pay rises / less perks).
Rarely gets passed on to the owners. They still want a profit!

Personally, I've not found an internet business that is cheaper to run than a retail shop. The costs are different. Where a shop can rely on footfall, a warehouse cannot. It needs additional marketing spend (generally, unless you're super unique and manage to crack being viral on social media or have an amazing product that walks itself out the door). Initially both options may require high marketing costs to drive footfall but a retail shop, in a good location, can safely reduce costs here. Internet businesses? No. You die if you don't do marketing.

Rent is cheaper for a warehouse, generally. That saving is absorbed by one of the other internet based costs, that a retail store, in general doesn't worry about.

Packaging costs - these are absorbed in shipping/distribution. The customer doesn't really pay them. They sit within the margin of a business. Shop costs for these tend to be lower, save for generic shopping bags. (I'm being very general about this, some shops have lovely and expensive packaging to consider).

I've found retail shops generally sell at a higher price for the same product. Less competition for the same item based on their location. However, also reduced number of sales due to reduced footfall comparable vs online. The internet is massive, the high street is not. It's impossible to compare them.

Retail shops don't have to worry about postage either. Customers will sometimes pay this, on certain large items the delivery cost will be free and the business will take the hit, to get the sale or just absorb it in the distribution costs.

Taxes - these don't always get passed on to the customer. Some businesses will absorb the cost and maintain competitive pricing. I've seen this happen consistently over the last decade or so. VAT changes - some businesses added them on for the customer to pay, others didn't and increased their market share but reduced profitability. A risk but it can work if you're flexible enough and can adjust some costs later with your improved market share.

This is why I don't like blanket taxes to solve problems. It doesn't work. Taxes are not reactive enough to situations and business life cycles. Every business is completely unique, even if it sells the same product variants. Staff numbers, warehouse costs, shop costs, packaging, postage, location - all unique.

 

[Mr D]

Or an internet shop could try ebay and amazon.
Wow, 15% of total price spent on a particular cost - and that cost built into item price. Big deal.

I'm selling the same type of items as a friend of mine. He's local, I'm international so we don't compete directly.
He's been able to open since June 15th.

We both buy items at the same price - he was smaller turnover than my business but not enough difference to change purchase price of these goods.

He's got the £19k expense before he even opens his doors - I used to have £6k for the same set of bills.
Where he's selling at £3 so am I. Where he's selling at £15 I'm selling at £12.
I didn't have the staffing or work the hours he did. I did have the postal costs and packaging costs he didn't have.
Which like him with costs were all paid for by buyers.

Sure, he had a much bigger marketing bill than I did. I just had the site fees for the various sites plus a bit of marketing on own sites.
Again, paid for by buyers.

Business shouldn't be taking a hit on delivery costs. Its what buyers should be paying - if item is £10 plus £4 postage or £14 with free postage the cost to the buyer is the same - and they are paying the postage!

Those of us with businesses run to make money don't usually take a hit unless its to dump something. Perhaps sell out of chicken nuggets before their sell by date is gone...
Rest of the time the intention with every sale should be to make a profit on the sale. Enough of those and business can make a profit overall.

 

[MR L]

With the changes from the UPU this only affects postal operators this doesn't affect direct entry solutions. What I have seen at the moment is that it no longer makes sense to use postal operators for untracked mail/parcels. Direct entry solutions are offering fully tracked services into the US for around £8-10 for a 1kg depending on volume with an average delivery time of 5 days with a POD at the end.

 

[Deleted member 59730]

AFAIK Blackwell's Bookshop stick US mail stamps on in the UK and then ship pallets of parcels to be posted in the US.

 

[MR L]

Interesting concept, what's the transit time and average cost per item with transportation? I'm assuming they'll need to have to pay someone to break it down in the US and hand over the items.

 

[Mr D]

Interesting concept, what's the transit time and average cost per item with transportation? I'm assuming they'll need to have to pay someone to break it down in the US and hand over the items.

A freight forwarder perhaps? Or even a US arm of the business.