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Royal Mail price increases coming – 31st March

By Dan Wilson February 28, 2014 - 5:09 pm

Newly privatised Royal Mail will be changing prices with effect from 31st March. That gives you just about a month to make any course corrections in reaction.

A first class stamp will be increasing in price to 62p and a second class stamp will soon set you back 53p. There’s a whole slew changes and how the changes will affect you, will depend on which services you happen to use.

You can find full details on the Royal Mail website here.

And for those of you who like to scour the small print, there’s an accompanying document chock full of details that you can find here. 10 pages in total!

One eagle-eyed reader has already been in touch to point out that the new terms say that Large Letter can no longer be used to fulfill an order. And that will be a blow to some sellers (although not 100% enforceable by RM). You might spot some other nuggets. If so, please do share.

What will these changes mean to you? Comments most welcome.

Update: 1/3/2014. Royal Mail have been in touch to clarify that Large Letter rule whereby it can’t be used to fulfill and order is only applicable to Business Mail users.

  • Kieran Collings
    3 years ago

    Hi

    Regarding “Large Letter can no longer be used to fulfill an order”

    Those terms are for a products which most online sellers do not use, those services are for Marketing, Publishing and General Correspondence
    Products.

    It does not apply to RM24 and RM48 etc that most of us are using.

    Royal Mail are really just going through a large rebranding exercise at the moment and i believe they are now trying to push out the lost leader products they have had for years under government control, changes in their terms is mainly going to affect the big mailing houses using downstream access etc where Royal Mail may have been operating at a loss in the past.

    I am not pro a private Royal Mail but that is what we have now, what i am more interested in watching now is what is ecommerce going to be like in the future with ever rising shipping costs, how many years will sellers / retailers swallow those increases? Will free delivery be history in the future? Or will online prices eventually be the same as the physical stores? If Royal Mail prices go up at 3-4% a year, every year, something will have to give.

    • Chris
      3 years ago

      Hi,
      I’m still unsure how this affects us personally.
      Every year I’m in the same boat, Royal Mail publish the same confusing info.

      We use BPL, BPR, CRL for inland.
      We also use, IE1, IG1, OLA for overseas.

      We post a lot of large letters, how will this affect us?
      (Other than the price increase) – I’m confused with the whole ‘large letter’ cannot be used to fulfil an order??

      Are parcel/packet prices going up too?

      Thanks

      Chris

  • JD
    3 years ago

    Sellers of lightweight products to International destinations are ‘hit’ by the long signposted restriction of the use of the letter rate to envelopes 5mm max thickness.

    They face a stiff step up to small parcel rate (small packets in old speak).

    Non- contract Airmail Examples:
    60g letter to US (max 5mm thickness) £2.15
    60g small parcel to US £3.80
    Signed for options add £5.00

    • Gary
      3 years ago

      I may be right or wrong but I thought that 5mm thing was introduced in 2013? In the last 12 months I have been sending anything over 5mm thick as a packet so I am either a complete plonker or my customers are incredibly grateful for not having to pay a shipping surcharge to collect their goodies.

    • 3 years ago

      You may well be right about that, now I come to think of it. I have a hazy memory along those lines.

    • JD
      3 years ago

      It was muted but not introduced. There was a botched notice re the ‘Scheme’ in the London Gazette and management seemed not to want to introduce the change along with all the other changes that they did bring in last spring.

  • Gary
    3 years ago

    What about keeping the prices the same as a result of efficiency savings? Haven’t Royal Mail thought about doing this?

    The point made above about simply raising prices every year is entirely valid as ultimately bricks and mortar and collect instore will become cheaper overall than sending by parcel. It may well be now for certain goods.

    I know that there are products I used to buy that I no longer bother with as the products simply no longer sell by the time you add £3 shipping. They used to sell well when shipping was under £1 just 3 or 4 years ago. Others probably have had to face a similar situation. We simply offer a different range of products that we know will sell or offer low ticket products as a multiple sale to make it a better value proposition when “free” shipping is factored in.

  • Gary
    3 years ago

    Spotted that is now prohibited to include any item in a large letter that has stiff or inflexible packaging that cannot easily be manually folded. What happened to the “Do not bend” principle? It seems that if a large letter cannot be bent or folded it cannot be sent as a large letter. That is going to cream cracker the DVD sellers!

    I blame the trend of smaller “green” draught resistant chop your fingers off letter boxes in houses for this.

    • JD
      3 years ago

      And stamp/photograph/postcard sellers.

      That is very stupid. Where did you see that?

      What about 5mm letters are they not allowed to be stiff either?

    • Gary
      3 years ago

      It was in the further details link in the news story. However I have now picked up that these “further details” relate to the mailing of marketing material, publications and journals. I would guess that these products have their own specific Royal Mail business tariff and a condition is that Royal mail have to be able to fold these to push them through letterboxes.

    • JD
      3 years ago

      Too late – just sold all my stock!

    • northumbrian
      3 years ago

      does anyone read previous posts for gawds sake like the very first comment

  • Jason
    3 years ago

    Will prices for OBA also be going up?

  • Mark Townsend
    3 years ago

    The size restrictions for international mail may well bring most of my online selling to an end.

    I sell earphones, light and over 5mm thick, all over the world. Postage to Europe costs £1.28 at present. With the new scheme, this goes up to £3.20, an additional £1.92 (a 150% increase) for an item that costs between £7 and £12.

    If the scale of sales was large enough, I could have order shipped out of another country but it is a niche item.

    If they had truly mirrored the UK structure and given me an International Large Letter, I may have been able to live with it but a price increase on this scale may be the end of this unique product line for me.

    Mark

    • Dan
      3 years ago

      im in the same boat, sell photographs, and brochures, motoring related etc

      until now i missed the international size limits, so thanks for making me re-read!

      it was the 1.28 current price that made me think! as thats the price i pay for 80-90% of my European items as it stands now. average order value is £5-8, one of my item is a £5 BIN, free post, no way ill be able to do that with 3.20 of it being postage paid for at my end! but then again, im competing for this item, and no one would buy off me if i upp’ed 150% the price. hopefully it will push the other sellers to only post to uk, so i can be the only one that sells that item and willing to post abroad, which may happen as im a business seller and they are private small time.

      going up to 3.20 could either stop me from including free postage (perhaps i’ll split the cost, eg ill continue to pay 1.28 myself, and put the postage to buyer as £2), which may add percieved value, as they will see 3.20 on the label as they recieve it. or ill have to put into force ebay’s tool that gaurantee’s me a minimum order before i offer free postage.

      :(

    • Mark Townsend
      3 years ago

      In the interests of accuracy, I should have specified that for me the issue is the thickness limitation. I can get the earphones in to the width & height but not 5mm thick.

      I take your point about the potential advantages of limiting other sellers and leaving more of the market to you. In my case, I am already the only sell that ships worldwide (it is a minor cult brand of earphones and worldwide postal shipping was my USP) so most of the world will go from one seller to none.

      Yes, I could just raise the price but I have to decide if I can sustain the enterprise on the lower level of sales that will come from such a price rise.

      Let me be clear, I accept that prices go up but if a Large Letter option worked for the UK, and it certainly streamlines any system to use uniform specifications, why not a Large Letter option for International? This effective price rise of 150% is outrageous.

      Footnote: I was on the verge of starting to offer premium replacement ear tips for earphones, a pair of which would weight about 8 grams but cannot be compressed to less then 5mm thick. Under the current system, these would go to Europe for 88p and now face a 263% price increase.

    • Gerry007
      3 years ago

      .
      The thing I never understand is how Chinese sellers are able to ship [accepting the item prices are low] items way cheaper than from the UK.

      We have an item on Amazon @ 300grams & cost £4.49p which can be sent Large letter within the UK, but we exclude worldwide shipping unless the buyer pays OVER £8 shipping [RM signed for int].
      Chinese seller sell a similar item for £4.86p INC INTERNATIONAL POST. less than the post costs us….!!. And RM handle this in the UK.

    • Chris
      3 years ago

      Loss leader?

    • Gerry007
      3 years ago

      .
      A few items maybe, but the cheap rates apply to everyone….

    • Dan
      3 years ago

      same for me it seems, they fit in a letter size envelope – eg A5 ish size, but thickness will be pushing it.

      i may have to package one up and measure (with a micrometer if i have to!), or perhaps use a thinner gauge of board backed envelope. it would really hurt me if this item would cost £3.20, as i couldnt offer worldwide free post on it, and looking at my stats, this item has made sales of 3-3.5k in abroad sales alone. perhaps i’d have to split the difference with buyer like i said, and hope that i could still stand out against personal users, that would charge the full 3.20

      i agree with if they are introducing international sizes, they should mirror uk , eg letter, large letter etc.

  • Chris R
    3 years ago

    Hi

    My understanding is that the large letter restriction relates to Business Post, which is a specific type of post used for marketing etc.

    If so this should not restrict OBA users from using Large Letters for fulfilment.

    I may be wrong – can anyone clarify the situation ?

    • Terry
      3 years ago

      Chris – I hope someone can claify the position. Reading the Royal Mail blurb I am still unsure. I am a BPL and OLA user and a proportion of my sales are postcards. Important to know what is going on!

      Do the Royal Mail want me to drop that side of the business and concentrate on items they won’t be able to easily pop through the door?

    • 3 years ago

      Will certainly ask RM to clarify points raised in these comments.

    • Paul Kirk
      3 years ago

      BPL and CRL will be fine for fulfilment large letters

  • northumbrian
    3 years ago

    I talk to the Trees

    • Gerry007
      3 years ago

      .
      Their not listening either……!!

  • Alex
    3 years ago

    As regards items sent from China, I too have ofton been amazed at the prices offered. Even with low item costs and a few pence profit being more attractive to them than it would be to a seller over here, I am still suprised.

    In no particular order I have a few ideas:

    1) International postage is subsidised by the Government to such a degree that it is free or nearly free to anyone shipping abroad.

    2) The sellers all work for a company and put their massive quantity of sold items in the company mail bag, or they work for the post office and insert their post into the system.

    3) International post is simply INCREDIBLY cheap from China.

    4) The items are stolen so the only overhead is FVF’s & PayPal.

    5) Uhh, sorry, can’t think of more….!

    IDK which it is as they all seem unlikely so it does leave me wondering especially as some sellers have a very high volume and even with bulk discounts and low item costs, I still can not see how they can make a profit with item/postage charges being so low. In addition, I have noticed that even the large sellers seem to always give a nominal value on the Customs Declaration (usually just a couple of dollars) and ofton also state it as a gift.

    • Gerry007
      3 years ago

      .
      RE:

      1) International postage is subsidised by the Government to such a degree that it is free or nearly free to anyone shipping abroad.
      NOT TRUE:
      see rates here:
      http://www.hongkongpost.hk/eng/postage/overseas/bulk/
      .
      2) The sellers all work for a company and put their massive quantity of sold items in the company mail bag, or they work for the post office and insert their post into the system.
      NEARLY TRUE:
      .

      Many bulk shippers do consolidate postings into 1 consignment
      .
      3) International post is simply INCREDIBLY cheap from China.
      SEE 1 above

    • JD
      3 years ago

      ‘NOT TRUE’
      You perhaps do not understand that $1HK is less than 8p!

    • Gary
      3 years ago

      Basically airmail shipping from china is 25p to £1 for items up to 100g and then £8.5 per kg bag full not for each item. So 50 lightweight items that weigh 1kg in total cost £8.50 in total to ship airmail to the UK. And Royal Mail have to deliver this!

      So we in the UK are subsidising Chinese postal imports as Royal Mail have to get this loss back by way overcharging UK sellers for outgoing airmail by the individual item, not by the weight of the bag.

      And to top it off ebay add 10% on top for postal costs. 10% of nothing is nothing which is why Chinese sellers are so competitive on ebay UK and why ebay don’t make a dime out of them!

    • northumbrian
      3 years ago

      “Chinese sellers are so competitive on ebay UK and why ebay don’t make a dime out of them!”

      that statement just confirms your on the mushrooms!,
      ebay make money on everything !

    • Gary
      3 years ago

      Getting pernickety a dime is worth 10 cents = 6p and ebay make less than 6p on the sale of many of the Chinese items I would suggest! High volume very low return. If ebay UK comprised of only Chinese sellers ebay UK would soon go bust!

    • northumbrian
      3 years ago

      eh
      there sre more chinese sellers than lops on a dogs back

    • Gerry007
      3 years ago

      .
      I am fully aware of the HKD = £ exchange rates [use it all the time on imports], including CNY = £….

    • stuart
      3 years ago

      I had a parcel the other day from a Chinese seller that had a Belgium post mark?

    • Gerry007
      3 years ago

      .
      Did it show the postage paid, if so how much/what weight?.

      Seems to becoming more so, Chinese sellers have relatives/agents in the EU, who handle dispatch, etc.

    • cackonmyleg
      3 years ago

      I am aware of a process where UK royal mail labels are put on parcels in HK and shipped to the UK in one large parcel. A receiving agent in the UK then opens up and sends the individual parcels.

      Result? One international charge by single weight, and the UK postal system used without having to pay for individual international shipping.

      Crafty eh?

  • northumbrian
    3 years ago

    economy of scale ?

    • Gerry007
      3 years ago

      .
      Of Course…

  • Andrew
    3 years ago

    We use the Royal Mail 48 hour service. We were paying £1.80 before + Surcharge now its gone up to £1.98+ Surcharge. So, we are paying exactly 10% more. On the number of parcels we send out, that 10% will make a £30,000 difference straight off profits every year.

    Its also incredibly difficult to put prices up to cover this as things are so competitive nowadays. eBay keep squeezing the TRS discounts and Royal Mail keep increasing prices. I think a lot of businesses will struggle in the next couple of years due to be squeezed from every angle.

    • Kyle
      3 years ago

      If you’re really sending about 450 packages a day then you would also qualify for the 9% bulk discount, depending on how you split your mail.

      I phoned Royal Mail about these bulk discounts and asked if they’re the old pre-sort discounts or not. They said that no sorting is required and these discounts have always been available and are automatically applied and that only the 4% discount for 20-99 packages a day is new.

    • Chris
      3 years ago

      Kyle, whats this 4% discount? As we would qualify for that.

      Cheers

    • Kyle
      3 years ago

      Whenever Royal Mail announce something we get two letters in the post: one to the account owner and one to the postroom manager (both are me).

      On the second page of the most recent letter there is a table laying out bulk discounts for Royal Mail 24/48.

      I can’t find reference to these discounts anywhere else.

  • Gary
    3 years ago

    Royal Mail PPI 0-1kg has had the biggest 10% price rise. Personal Post Office customers see an increase of 7.5% in the same band and no price rise over 1kg. Will Royal Mail be removing the PPI surcharge though as this may now have been built into the PPI price rise?

  • 3 years ago

    Hello,

    Has there been any mention on the surcharge…do we know if this is increasing?

    Thanks

    Sam

    • Paul kirk
      3 years ago

      Fuel surcharge will be 3%

  • Mark Ralph
    3 years ago

    Hi

    There needs to be some answers for royal mail here,

    Just got of the phone from them, we use PPI and RM48.

    I have just need told the Large Letter size will reduce to 10mm instead of the old 25mm.

    But was told this will not be officially announced until later this month.

    HELP!! – Is this true???

    • Gerry007
      3 years ago

      .
      The sizes are shown in section 4, for 2014…

      Here;
      http://www.royalmail.com/sites/default/files/RM_Business_Price_Guide_Mar2014a.pdf

      Sometimes idle gossip by RM staff causes all sorts of tensions….

    • 3 years ago

      I notice that the machine readable Larger Letter is 10mm, I suspect this is where the confusion stems from. I have contacted my rep and they are not aware of any size reductions….

    • Danny
      3 years ago

      ‘Machine readable’? I though it was all machine readable now? I use First Class BPL (stamp with bar code). Machine readable? Yikes – help!

  • Gary
    3 years ago

    Machine readable? Isn’t all post machine readable?

    • 3 years ago

      This refers to bulk account senders, who have to include a special barcode on the front of their letters…but yes it is misleading…

  • Mike
    3 years ago

    As a seller of very thin antiques (stamps) the ending of the 10gsm Airmail rate is a huge blow and will cost me hundreds of pounds a month…

    I have now decided to invest in a franking machine, it might upset my punters but it will delight my bank manager…

    • Kyle
      3 years ago

      If it’s going to cost you hundreds per month and you can prove to Royal Mail that you are projected to spend >£5000 on airmail within 12 months then you can try and sign up early for Contract Airmail.

      Even on new pricing, I think 10g contact airmail letters are <£1 (inc VAT) to anywhere in the world.

      £0.60 per item + (0.01kg * £7.00) = £0.67
      + 20% if destination is within EU = £0.80

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