Will the Royal Mail Price Hike Affect You?

By Sharon Fussell, March 30, 2012

It is with dismay I see that Royal Mail have increased postage charges yet again. Of course they do this every year around this time, but they do appear to have increased prices substantially more this year.

What Effect Will the Royal Mail Price Increases Have on Amazon Sellers?

When you sell products with fine profit margins an increase in the postage charges can be devastating, particularly to an online business that is totally reliant on the postal service to get its products out to its customers.

Of course for merchant sellers Amazon do allocate postage credit for sellers and they did increase this from £2.75 to £2.80, but this is still too low when selling low value items.

I know Amazon will be besieged with sellers asking them to increase the postage credit, but I fear they will just urge you to ensure you price books allowing for postage charges within your profit margin.

Pam and Derik decided to contact Amazon hoping that others will also do the same, attempting to create pressure on Amazon to increase postage charges at least according to weight!

They sent the following email to Amazon, and encourage you to do the same:

“To Whom It May Concern:

Royal Mail have just announced record price increases for postage to the UK and worldwide. There has not been an increase in the standard post allowance for books in the last five years.

With ‘competition’ from people who think that selling a book for 1p that is going to cost – at current rates – over £4 to post, it is not realistic to uprate prices to cover increased costs, nor would it be feasible in terms of time taken.

We have had only two feedbacks complaining of postal charge to a customer being ‘too high’ on a small book, and these were satisfied with the explanation that this is a standard rate set by Amazon and not by any individual seller. To the customer it is the overall cost that should matter.

I assume you have weight and size details on most books, so, surely, it is possible within your system to have 2 or 3 standard rates depending in book size and weight. You already offer this for toys and games items where there doesn’t seem to be such an emphasis on silly low prices.

The particularly high increase as announced is for books weighing less than 500g, but more than 25mm thick (including packaging). They go from £1.33 or £1.72 up to £2.20 each.

For other weights, the increase this year is the highest ever. Set against rates decided five or more years ago, the cost of selling many books on Amazon will soon be prohibitive. We all want to make a profit – except the 1p each for large heavy books sellers! Have you ever looked into how they can do that and make a profit? Many of them have thousands of feedbacks shown.


Why are prices changing?

Royal Mail’s statement on their price increases can be found here.

Key price changes

Stamp prices are increasing from 30 April 2012:

  • 1st Class stamps for letters weighing up to 100g will increase from 46p to 60p
  • 2nd Class stamps for letters weighing up to 100g will increase from 36p to 50p.

Packets weighing up to 750g will be charged at one flat rate price:

  • 1st Class packets weighing up to 750g will cost £2.70.
  • 2nd Class packets weighing up to 750g will cost £2.20

What do you think?

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