Postage rates differ according to many factors. While it’s obvious that the price will change depending on the item type (letter, parcel, under various formats) or destination (national or international), a majority of business owners ignore that Royal Mail enforces generous discount schemes when the item is franked, rather than stamped. Here’s the breakdown.
How stamp rates are calculated
First, it’s important to understand just what “UK service” exactly means. Highlands and Islands in Scotland, the Scilly Isles and the Isle of Man are included, but Channel Islands are not.
HM armed forces represent another category, and actually a single destination no matter where the recipient is located.
There are three different item types: letter, large letter and parcel.
- Letters have a maximum length, width, thickness and weight of 24cm, 16.5cm, 0.5cm, and 100g respectively.
- These values change to 35.3cm, 25cm, 2.5cm and 750g for a large letter.
Postage rate will depend on weight only for these two categories. If the item is sent to the UK, weight will only matter for large letters.
Size also matters for parcels: they will be considered small, medium or large, depending on their formats.
- Small parcels will have maximum length, width, depth and weight of 45cm, 35cm, 16cm and 2kg respectively.
- These values will change to 61cm, 46cm, 46cm and 20kg for a medium parcel.
- Large parcels must not exceed 105cm in length, and 30kg in weight; additionally, combined length + width + depth values must be no more than 300cm.
It’s interesting to note that Royal Mail changed to metric measures only in 1975.
Saving on postage rates using franking
The Royal Mail discount policy
As franking saves Royal Mail much of the postage burden, discounts are applied for business users.
- Typically, while it costs 70p to send a first class postage to a UK address using a stamp, it will only cost 61p to frank it.
- At £3.55, the discount will be worth 7p on a 1st class Small parcel.
- For international mail, there will be a 10p discount on standard 10g letters.
Factoring in the cost of the equipment
But is it really worth spending so much on a franking machine, even with such discounts? It all depends on how many letters will need to be sent, on a regular basis.
We’ve seen that the discount over stamping was 9p for a First Class letter. Now, a low volume can cost anything between £1000 to £3000. If we take the medium value of £1500, and assume a business year has 280 days, a business will need to send over 44 letters a day, until a franking machine turns profitable. If the business sends just 11 letters a day, it will take three years for the business to actually start saving on postage rates.
But of course, these calculations do not include satellite costs like ink, service, and mailing supplies. However, they don’t take into account the other benefits of franking either.