Pricing In Proportion An Introduction , Marketing Direct
Resource for Pricing In Proportion An Introduction , Marketing Direct with Articles arranged by categories . Continue for our current list of the Pricing In Proportion An Introduction , Marketing Direct
Pricing In Proportion: An Introduction
On 21st August 2006 the Royal Mail will introduce a new system for calculating postal costs. Unlike the existing purely weight-based system, future charges will also take into account the size of the item. Items will be classified as one of three formats: letter, large letter, or packet. The format will be determined by the size and thickness of the article. Each format will have its own table of weight-band charges. Postal charges will thus be a combination of size and weight.
Background
The purpose of the change is to reflect more accurately the costs to the Royal Mail of delivering all items of mail. The size of a mailing item is a more important factor than its weight in determining its delivery cost. Large, light-weight, bulky items incur greater sorting, handling and transport costs. The existing system that charges on the basis of weight alone means under-charging for large light-weight items and over-charging on smaller heavier ones.
The change is expected to affect only 30% of mailing items and will not change the cost of posting a standard first or second class letter. Of those items affected roughly half will actually cost less. Overall, the change will be "revenue-neutral” for the Royal Mail, i.e. it is not expected to make any additional income from the new system.
Format Specifications
The Royal Mail will be providing every household and business with a template to identify which category or format an item falls into.
Letter Envelope size less than 165mm x 240mm (C5 or smaller) Less than 5mm thick Up to 100g in weight
Includes: most letters, postcards, bills, statements, most greeting cards
Large Letter Envelope size less than 250mm x 353mm (B4 or smaller) Less than 25mm thick Up to 750g in weight Includes: A4 letters, CDs, DVDs, most brochures and catalogues
Packet Larger than 250mm x 353mm or Thicker than 25mm or Over 750g Includes: most books, VHS cassettes, most cylindrical packages,
The existing pricing structure uses 16 weight bands. From August there will be fewer bands, with each one covering a wider weight range. Each format will have its own table of charges. In many cases the charges for letters and large letters will be significantly cheaper than the existing counterpart.
What will it mean to you?
The 'One Price Goes Anywhere' stamp price will still apply to 1st and 2nd class letters up to 100g in weight, and will remain at 30p and 21p respectively.
However, substantial savings will be possible if you reduce the physical dimensions of your larger mailing items. For example by simply folding an A4 letter in half so that it fits into a C5 envelope the cost of postage will fall from 42p to 30p for 1st class, and from 35p to 21p for 2nd class.
Furthermore, whilst the size of the envelope will be smaller, because the weight bands have been extended, heavier articles can be posted at no extra cost. Therefore, additional inserts can be included without penalty. For example, a C5 envelope weighing 100g currently costs 46p for 1st class delivery. In the future this will cost only 30p, the same as a 60g letter.
In short, plan your mailings carefully to take full advantage of the format specifications and you will be able to minimise the impact of the system changes and possibly even reduce the overall cost of your postage
About the author Diana Lees is the Managing Director of the mailing house, MailRight Ltd., which specialises in the preparation, fulfilment and posting of direct mail campaigns. For more information on Pricing in Proportion or mailing advice derived from 16 years experience in the industry, visit http://mailright.co.uk/
Tell Your Friend
Site Tools
- Change Font family
- Default(Times New Roman)
- Verdana
- Arial
- Courier New