2011 Royal Mail tariff: April/May price increases

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Royal Mail have announced their price changes for this year. There are two different price changes, one tariff for stamps and franking (opens in .pdf) customers which comes into effect on the 4th April 2011 and another tariff for account customers (opens in .pdf)which will be introduced on the 9th May 2011.
 
The cost of a basic 1st class stamp will rise for those buying stamps from 41p to 46p, a 12% price increase. As a seller on eBay you’ll need to check the prices for the service and weights of the products you sell, but expect the cost of posting a 251-500g packet to rise from £2.24 to £2.48 a 10.7% price rise.

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If you’re a Royal Mail account customer you’ll also need to check the new rates to determine the rise in postage costs that you’ll be charged, although they won’t change until May.
 
As an example we’ve checked the costs for Packetpost, for which charges are based on the average weight and format of all the parcels you post. For low weight items the price increases are as steep as 15% for both first and second class post, although if your average weight is higher then the percentage increase drops to around 5%.
 
Which ever method of posting you use the price increase is bound to be unwelcome, but compared to courier Royal Mail is still the most cost effective method of delivering low weight items within the UK.
 
Which postage services do you use and how will the price increases affect your business? Are the price rises high enough to make couriers attractive for your products or will you stick with Royal Mail?

18 Responses

  1. For me there is no option.
    Its Royal Mail or nothing.
    My solution is to buy stamps before the April price hike, as much as cash flow allows.
    Currently a cut price large stamp costs just under 62 pence (66p rate).
    Come April this is worth 75 pence. So by buying now this is a 17.3% saving. That is a huge saving even if the stamp stock is kept for a year.
    Now look at the price for Special delivery. Currently £5.05 for standard rate and from April – £5.45. Using 75p stamps x 7 + 20 p, this will cost only £4.54 (ie 7 x 62 + 20p), approx 16.6% saving. Similar percentage savings can be made for many postal tranches.
    Its a no brainer.

  2. As items above 500g are rising by a significantly lower percentage (is there more competition at these price levels?) then I will be looking at bundling more of the lightweight products and pointing out to buyers that the combined shipping savings are now even greater.

  3. wewould rather pay that little extra if it means standards are maintained reliability and speed are as important as cost to us

  4. Textbook example of price gauging by RM.
    They know there is little effective competition to them in the sub 500g market segment so they have creamed their customer base accordingly.
    Only competition can redress this and there is little prospect of that anytime soon.
    Up will go our prices so we will doing our best to help stoke the inflationary fires later this year.
    pip pip

  5. Can’t believe the increase in collection fee from £500 plus vat to £650 plus vat !

  6. PPI’s still worth having, I only got my account last April when the ordanary postal charges were increased so even with the lastest PPI increases, my postal charges from the Royalmail are still cheaper than the ordinary postage I was paying in 2009. I can’t moan at that.

  7. These price hikes combined with the changing of eBay fees (on shipping) looming…..business are going to have either pass this cost onto the customer or save money internally.

  8. I got the prices for packet post items from above which is for large letter and packets but can anyone please post a link to the new prices for packetpost customers in regards to international mail as I can’t find it anwhere.

    Many thanks

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