How the UK Postage Rate Increase Affected Online Businesses

Many online businesses rely on the Royal Mail to get parcels and packages out to their customers on time and as such need the mailing service to do this for them. They could of course, use other mailing services and if this works out cheaper for them to do, then it stands to reason they will do just this and this ultimately means the Royal Mail will have lost valuable customers to the rival postal services. But the truth of the matter is that no other mail service offers a comparable service for packages under a certain weight, therefore the Royal Mail has the monopoly on this service.

Although we know exactly how much a first and second class letter will cost us, when it comes to parcels and packages things are less clear cut. In the past anything less than 100 grams cost £1.58 and items between 510 -750g cost customers £3.05. With the increases, this system is now set at a flat rate which means items up to 750g will cost £2.70 which is an increase of 71%!

Many online businesses realise the increase is going to negatively affect their businesses. It doesn’t matter if they are selling smaller items like smartphones or larger items like computers; the cost of sending these items out to their customers using Royal Mail services is going to prove to be a lot for any online business to have to cope with.

When the calculations are done, an online business that sends out 50 parcels weighing an average of 100g per month which up until the increase in postal rates cost them £1.58 a piece making a grand total of £79 every month. The new price rate will have them paying £135 for the same volume of mail weighing the same amount.

A solution to the dilemma other than using a different mail service is to post packages out earlier whenever possible and to send them out as second class mail. By doing it this way businesses would be able to avoid the increase. The downside is this could affect the quality of service they offer their customers, which is a pretty hard thing to have to accept when good customer service is a vital part of any business.

When customers buy anything from an online business, they expect to receive their items in record time. If online businesses are forced to use second class mail to send out these items because first class is just too expensive for them to use, they are running the risk of customer dissatisfaction. It’s a no win, no win situation that many of the smaller online business will have to face up to.

The Royal Mail have the monopoly when it comes to this price bracket for mailing packages as no other courier or mail service offer this kind of rate for these weights. For heavier items, online businesses do have a choice and can use other carriers to get items to their customers in a timely manner that’s acceptable and affordable for an online business to use.