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What the rise in the cost of stamps will really cost your business

Image via Mike Cattell

Olaf Garvey, Commercial Manager for uSwitchforBusiness.com, adds up how much the 5p rise in the cost of stamps earlier this month would cost us here at uSwitch

As you may or may not be aware, the post office has increased the cost of stamps, effective as of the 4th of April 2011. The headline increases being 41p to 46p for first class and 32p to 36p for second class. That is over an 11% increase on first class stamps. For small businesses that rely on post for their business this change will have a significant impact on costs. They will either have to swallow the costs or will end up passing them back onto their customers.

So why are we seeing these significant rises? Yes, the Post Office needs to modernise but should businesses and consumers have to pick up the tab? This is the biggest rise in stamp prices since the early 1980s when First Class stamps increased for the first time.

The second question to ask is what could these rises mean for a business? Well, I had a look at what we were sending out on a typical day at uSwitch.com:

A typical day 13/4/11

Type Quantity 2010 cost 2011 cost Total Cost Total increase
1st Class Letter

35

41p 46p 16.10 11%
Recorded Delivery

1

74p 77p 77p 4%
Special Delivery

2

505p 545p 10.90 8%
Large First Class

1

66p 75p 75p 12%
Small Packet

1

701p 762p 7.62 8%

This would mean that if we had the same amount of post every day for a year that it would cost us £827 more compared to 2010 pricing.  This is a significant hit for small business, along with the high rate of inflation that we are seeing coupled with the increase in VAT to 20% circumstances for small businesses are not looking up.  Post, much like utilities, are essential for businesses; if you can cut your utilities costs at uSwitch for Business where we have saved our customers on average £962 per annum, it could offset the increase in unavoidable postage costs.

*252 days

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