Using a Franking Machine to Avoid Stamp Price Rises

By | April 3, 2012

It’s true that they’re not the sexiest piece of office technology but due to the Royal Mail’s recently announced stamp price rises, franking machines could save you a bundle of money on postage.

As of April 30th 2012 the price of a 1st class stamp in the UK will rise from 46p to 60p. That’s an increase of 30%. A 2nd class stamp will cost 50p where before it cost only 36p – a whopping 39% increase. The cost of sending parcels has also risen significantly.

While in the past a small business owner may have scoffed at those who complained about a few pence added to the price of delivering a letter, these rises constitute a real problem for those who rely on the postal system for their day-to-day operations. Small internet retailers will be particularly hit.

So can franking machines really help you get around these rises? Looking at the new postal tariffs shows that the cost of franked mail is rising substantially less than stamps – only a 5p rise on the cost of posting a 100g first class letter, 3p on the equivalent 2nd class letter – so it’s clear that businesses with franking machines will be less severely impacted.

What’s even more striking is that even on the new 2012 tariff the price of franked mail is, on the whole, cheaper than 2011 stamp prices. In fact you could save an average of 38% on stamp prices by using a franking machine.

Is a Franking Machine Viable for My Business?

Franking machines apply a postal frank to mail using credit from an official franking account. They therefore need to be connected to a working phone line.

Cheaper, low volume models will require you to input the value manually whereas higher end machines will calculate the price of your mail and apply it automatically. Most models come with scales. SMART franking machines record transactions allowing you to reclaim VAT.

Selecting an appropriate machine is a matter of calculating your postal volumes, working out the potential saving and setting your budget at a level that still allows you to reap some of that value.

Make sure your cost calculations include:

  • The cost of buying or leasing the machine itself
  • The cost of topping up the machine with credit
  • The cost of yearly postal inspections
  • The cost of servicing and maintenance
  • The cost of consumables (ink etc)

It may seem that the costs are mounting up well beyond a level where you could expect to save any money but due to the imminent price changes the threshold for franking machine cost-effectiveness is now very low.

In addition, many suppliers will quote an all-in-one price which includes the above features, making your calculation that much easier.

If your business relies on the Royal Mail for keeping lines of communication or delivery routes open then the time to do those sums is now…

About the Guest Post Author: Jamie Griffiths writes for Approved Index, the UK’s leading B2B directory and marketplace for business products and services.