Saving Money On Postage - UK & Europe

Hellmail provides businesses and consumers with easy access to a range of services aimed at reducing postage costs. From private operators to digital mail services as well as franking, we deliver up-to-date news from the UK & Europe, highlighting new and existing operators alongside the latest product lines. We are uniquely placed to provide E-tailers, Direct Marketeers and businesses reliant on post and parcel services ways to save money on postage costs and showcase new products and services from both public and private European operators as well as forewarning of any regulatory or price changes for both regional and international post. We welcome (and receive) articles and press releases from operators, industry specialists and practitioners.

In 2008, we spoke to Michael Mackay at Courir Ltd. Based in East Sussex, Courir says it is well placed to be able to help businesses get the best options from postal services so I went along to find out more about Courir and the kind of service provided by a leading postal consultancy.

Courir is an independent advisory service based in East Sussex, which advises businesses on the most efficient and cost effective way to reorganise their mailing requirements. Michael Mackay, once a Senior Key Account Manager with over 25 years experience with Royal Mail, heads Courir and is enthusiastic about the opportunities for business:

"No two businesses are alike" said Michael. "What we do is help businesses either optimise their current use of Royal Mail services or help them through the maze of choosing an alternative supplier. In fact, we can offer a fully managed service, meaning we are able to take care of the negotiation, setting up of services and any training needed, to ensure any change is seamless and as painless as possible."

"For over 350 years Royal Mail had the collection and delivery of mail largely to itself but now the £7bn market is open to other carriers all keen on a share of the 22bn items posted annually to the UK's 27m addresses."

I suggested that many businesses may not even be aware of the options available to them or just how many operators there were in the UK.

"Well, Postcomm – the industry regulator – has currently licensed 21 mail service providers and this number itself has grown by 3 in the last couple of months alone. However, unless a company is one of the larger mailers, they may not have come across them at all, let alone be in a position to answer 'is it worth considering alternatives to Royal Mail?', 'what services do they offer?, 'what are the pros and cons?' and 'will they save me money?'.

How have Royal Mail's competitors managed to provide a UK-wide delivery service and offer business some real alternatives?

"Royal Mail's collection and delivery service requires the employment of nearly 1% of the entire working population of the UK. The typical competitor actually uses Royal Mail to deliver the mail that they themselves have collected, sorted and transported across the country. The 'S' symbol, shown on the front of each item, is the only indication of the route your post has taken to reach you.

This situation is likely to remain for the foreseeable future although TNT is widely reported to be trialling a delivery service in Liverpool using their staff. Anyone hoping for a viable, UK-wide, alternative option to Royal Mail will probably have to wait some time though – at best any alternatives will surely focus on city centres and may well exclude residential addresses." he said.

So apart from the top-500 users of post (who account for 50% of all UK mail) are there any opportunities for businesses with a more modest use of postal services? :

"Well, the initial step is to ensure you are getting the most out of Royal Mail. First and foremost, take a look at the size of the item you are sending. Even though Royal Mail changed pricing to reflect the size and weight of an item way back in August 2006, many users are still sending single sheets of A4 in a C4 envelope. For a 1st Class item of post this can mean the difference of paying either 36p or 52p - quite a difference. Theres an obvious saving there simply by folding items where possible to fit a C5 envelope. That way you take full advantage of the 100gms first weight step.

"If you are supporting your local Post Office, remember that prices typically change in April so buy inflation proof 1st and 2nd Class stamps before the prices change as they will be fine for use beyond any increase! Beyond the use of postage stamps a Franking Machine brings great convenience - as well as a 2p discount for a 1st Class letters rising to 3p for a 2nd Class compared to the equivalent rate had you used a stamp. These savings are even larger as you post increasingly heavier items of mail. If you do take this route, consider the cost of the franking machine as that can be high – with options to either lease or buy equipment. There are also consumables to consider (labels, inks) that often need to be purchased from the manufacturer of the machine and these can be expensive as well as the ongoing maintenance costs. Once a year the pricing information needs to be updated and this also results in an expensive replacement 'chip'."

"Those with the technical ability can pay for post online with both Mac and PC users catered for with Royal Mail's Postage Online and SmartStamp® (PC only) - which offers additional flexibility in return for a monthly fee. If more traditional methods are needed, providing you spend over £100 per week on postage, an account with Royal Mail may be the answer. If you choose this route be mindful that, since September 2007, Royal Mail introduced a minimum fee of £5.00 for each order you place so keep an eye on smaller mailings to avoid the charge. Royal Mail has confirmed there are plans to increase this to £20.00 at a date yet to be advised." he said.

Ok, where are the discounts we were hoping for?

"Realistically, you need to be posting at least 1,000 letters or more at a time to approach further discounts. If you do, and provided Royal Mail's machines can read and automatically sort your mail, you can obtain discounts of 12% or more. Beyond 4,000 letters or 1,000 packets greater discounts are possible provided you sort the mail or enlist the services of a Mailing House to do this for you. Posting these amounts also means you are able to consider one of the newer carriers for your post too."

What can the competitors to Royal Mail offer?

"Any move should bring cost-savings as well as making the posting process as easy as possible. Remember though that they offer, at best, a two-day service so mail collected on a Monday will usually be delivered on a Wednesday. If you can accommodate a 2 or 3 day delivery then considerable savings are available from 1st Class rates – ask yourselves, and users, if 1st Class is really necessary or is it simply 'this is how we always send our post' as this step alone could mean you may be able to cut 50% from your postage budget."

How can businesses explore these kind of opportunities further and get the best deal?

"Enlist the services of a Postal Services Consultant for full analysis of your use of post and how the alternatives – either from Royal Mail or from alternative carriers - can help. I noticed that Hellmail has some listed on it's website of which my company, Courir Ltd, is one."

I thanked Mr Mackay for his time and for providing a useful insight into some of the possible savings available to business.