High postage cost: How can we absorb?

Many of small business are hit hard with the high postage cost this year with increase of royal mail prices by 11% on average. These prices will not come down & we need to find a way how to absorb this price rise so that you can stay in business.

Few businesses might be able absorb the price rise due to high volume of transaction and others thinking of closing down! Many of us might already be looking at finding alternative suppliers & others stay with royal mail as it is still cheaper. We knew about the price rise in March which was the time to think and plan. Here are few ways to cope with royal mail postage price rise for your business.

  1. Tweak your Product Prices: It is good idea to do a research on your product prices & see how your competitors are selling. Raise the product price by few pence if you need to. This may not look ok with one product but will make difference across a range of products saving you money bit by bit.
  2. Lower your packaging cost: Try bulk buying your packaging material which should lower your cost. If you are loyal to you supplier you might even be able to negotiate price. The best way to go forward is to use recycled packaging material which you can get for free. Do you have Cash & Carry in your area? Ask them if they got any wasted shrink wraps or boxes. They will be more than happy to give it out as it is going to be their waste & you are helping them out with picking it up their area!
  3. Offer Multi-Buy Products: People love bargains & they will buy more if you offer them decent price. As you already know the royal mail minimum price starts with 0-750g product. Why not offer multi-buy deals which will clarify the postage cost? If the price is right you will have better sales.
  4. Alternative Suppliers: This may be an option if you are selling heavy products. Collect + starts their price £3.99 and it is a good service as well. Why not keep your mind open for this option especially if your multi-buy sales go up?

These are basic ways of absorbing the royal mail price changes. You may be in trouble if you were offering Free Postage. The best way to go if you are in this situation is see what others are doing. If you can raise the product price, do it! Keep the postage free as much as you can as it is one of the reasons that buyers are put off in online shopping!

It would be interesting to find out which strategy worked out for you and which did not. Please do leave your comments.

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About DaytodayEbay

Multichannel Sales Channel Expert - eBay, Amazon, eBid, Pixmania, PlayTrade | Advanced specialist training for businesses of all types and sizes

Posted on May 8, 2012, in eBay Strategies and tagged , . Bookmark the permalink. 4 Comments.

  1. I am a small seller 15 – 20 parcels a day and have always tried to support my local post office but the miss match in prices available from Royal Mail and the Post office ar really starting to hurt

  2. That is the case with most small businesses. The thing is Royal Mail won’t change what it is doing leaving down to us to change the way we work.

    Are you still using Royal Mail Andy ?

    • Yes, Over all apart from the item not received issues and quite frankly ridiculous lost parcel claims procedure I’ve been happy with RM,
      For 3 years now I,ve always used my local post office, like most businesses I like to use local services as much as possible. Sadly it is beginning to look as though they have been priced out of the equation and with ought that point of contact I could very likely start looking at completely different courier options.

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