2014-03-26 13:48:42 - Baker Goodchild talk about how the recent announcement by Royal Mail that it intends to increase the cost of stamps/postage, will affect Printers and Marketing Agencies in particular and what measures they can take to alleviate this.
Birmingham-based direct mail fulfilment and print management services provider, Baker Goodchild, has revealed that both printers and marketing agencies could be seriously affected by the recent announcement that Royal Mail intends to increase the price of both its first and second-class stamps from the end of this month.
Earlier this month Royal Mail stated that from 31 March it intends to increase the price of a first-class stamp by 2p to 62p, whilst a second-class stamp will go up by 3p to 53p. In addition, a large letter first-class stamp will also rise by 3p to 93p and a large second class stamp will also increase by 4p to 73p.
Speaking about how both printers and marketing agencies will be affected by
the price increase announcement, Baker Goodchild’s Mail Specialist, Account Director Adam Stafford, stated, “In a lot of cases post is already the single largest cost involved. So often, even after the printer and the agency have done their work, and we have done all our work filling the envelopes, the postage cost alone will dwarf the cost of what has come before
He continued, “Being the largest single cost, a postal price increase on an overall campaign is actually very significant, and obviously companies are always looking at ways to alleviate that, which is where we come in.
“Obviously there are alternatives to Royal Mail services, and we have access to various different discounts which can offset some of the increase, so they pay as little of the increase as possible.
Adam added, “Very often the discounts will depend on where the item is being sent to, how time sensitive it is, and obviously factors such as weight, size and the nature of what you are sending, how environmentally friendly it is, all of those factors play an important part and involve various different discounts. Obviously if you combine those elements together, the level of discount that becomes available, is quite a lot, especially when compared to stamps.
“There is also an additional benefit that by going on a discounted service, it becomes more reliable, and is often put on a bar-coded service, so there’s no sorting which means its less likely to be delayed.
“Our job as an expert, is to try and find the best deal for each specific mailing. The trouble for printers and marketing agencies more than anyone else is they are just passing that cost on, and it’s generally something they are not making margin on. In some cases they almost reluctantly pass that cost on, because what they really want is the print, the design and everything else that comes along with the campaign.
“It’s a cost that no one can avoid, like VAT! If you want to get something somewhere, at some point, Royal Mail is going to be involved in that. It’s important to make sure you are taking the most cost effective route when it comes to postal costs, in the same way that you would employ a tax advisor, in what to do with your money. That’s where we fit in when in terms of postage.
“Don’t get me wrong, Royal Mail are one of our biggest suppliers, and we have noticed they have got a lot sharper in a lot of areas, as a result of competition. But at the same time, you get what you pay for, but it doesn’t’ mean you to have to pay too much for what you are getting.
“Printers and marketing agencies, being intermediaries, or as we would call them, ‘trade clients there’s no reason why they should not expect make a margin on the postage. It’s something we would like to educate people on. Sometimes people raise an eyebrow when they find out you can make a margin on the postage, but why shouldn’t you? It’s no different to selling paper! I wouldn’t expect a printer not to make a margin on the paper they use to print upon. I wouldn’t expect an agency not to make a margin on the advertising space that they buy. Therefore I wouldn’t expect anyone to sell a product or a service, without making a margin. The beauty of what we provide, is that we can still show people how to make a margin out of the postage, with the client still saving money, and that’s the whole point of the process.
We can demonstrably save enough money, that there’s enough headroom for everyone to make a fair margin, because otherwise why would they want to do it?
“Effectively if you do postage without making a margin, then you are just lending somebody money! With zero interest. It’s pointless!
“It’s similar to the big conglomerates, who have a large buying power. It’s the same with us. Clients can take advantage of our buying power, which is in the millions, while there’s might not be. Quite simply it comes down to a combination of our expertise, and knowledge of the market, and our bulk buying power, which allows them to access much greater discounts than they would be able to access themselves. Even when you factor in margin from Royal Mail, or from an outside source such as downstream mailing, through to the printer, the client is still saving money, above what they would be able to achieve on their own. And that, at the end of the day, is the most important thing.
“A printer who is competitive on the postage element, coupled with what they do, is more likely to be able to win the print that they are after. So, they might be the most competitive on the print itself, but as soon as you add postage on, if they are not paying attention to that part of it, they will be more expensive, and the same with an agency. So it is in their best interests to buy at the best rate that they can. In addition to trying to make a margin on it, they need to be competitive on the whole package.
“We do a lot print management. But I have no doubt that a web printer, printing millions of documents and buying paper by the tonne, gets their paper a lot cheaper than I do! Similarly we get the postage a lot cheaper than they ever would. It’s what we do. Same with advertising and design agencies. I am sure they are paying a lot less for their advertising than we would. But then they spend a lot more money on it than we would. It’s exactly the same principle.
“It’s similar to the electricity tariffs. People don’t often know if they are paying the best rate. But by shopping around, and coming to an expert like ourselves, we can demonstrate that we can effectively save companies a lot of money when it comes to postage costs. Just by switching someone on to the right tariff, in quite a few cases, we can actually reduce their postage costs, even taking into the effect the price increases.
“So there is every reason to do it, and shop around and find an expert, and in turn, save money. You don’t have to accept the increase at the price they state, there are other options available.
“Three reasons why printers and agencies should be looking at this. One, to maintain their competitive edge, secondly, they can make a margin, and thirdly, why shouldn’t they make a margin?
“There are a lot of printers and agencies that we have worked with now for many years, who long-term, are making a margin on their postage, which has helped them to grow, and become more competitive, and in turn, make more money.
“In some cases we can save clients as much as up to 60%, and we all still make a margin. It can be as much as that. So printers and agencies need to be smart, shop around and in turn be more competitive. We can help
Based in the heart of Birmingham, close to the city centre, Baker Goodchild is a privately-owned company with over 19 years extensive experience in providing print, mail and postage solutions, throughout the UK and Internationally.
For all international mailing enquiries, contact Baker Goodchild’s International Mailing Specialist, Gareth Stringer, on T: 0800 612 1972.
For information on the services Baker Goodchild provides, please visit their website (www.bakergoodchild.co.uk) or call 0800 612 1972.
Notes to editors
About Baker Goodchild:
Mailing experts since 1995, Baker Goodchild are an experienced team that are truly passionate about print, mail & postage solutions. Privately owned by their management, they have over 19 years of experience providing reliable, mailing services to businesses throughout the UK and overseas.
For further information about Baker Goodchild, view: www.bakergoodchild.co.uk
Or Tel: 0800 612 1972