Recent changes in postal regulation, giving Royal Mail more commercial freedom, mean that the market is likely to become even more competitive with users – or groups of users – being able to negotiate bespoke contracts with all the postal suppliers.
Increased competition should also start to change the relationship between postal suppliers and their customers away from one where the supplier simply dictates what the customer can have. Many mailing houses and printers are already using Royal Mail’s competitors but even these have not yet been able to take full advantage of the potential benefits of competition.
Mailing houses and printers have found it difficult to differentiate themselves and suffer because they are perceived to be supplying a "commodity". An obvious benefit of competition is that there are more options than ever before in the postal market.
By investing time in some initial research, or by using a broker that has the software to work it out, a printer or mailing house can offer a different – and potentially better – postal solution for both their clients and themselves. Although each postal supplier may appear to offer similar prices, there can be substantial savings depending on the individual mailing. For instance, depending on the geographical distribution, using a postal supplier that offers zonal instead of national pricing might be a better choice.
Or, if the client can’t reclaim VAT, using one of Royal Mail’s competitors can reduce the VAT liability. For business-to-business mailings there are options to bypass Royal Mail completely and at least one of Royal Mail’s competitors is starting its own delivery service to residential customers in selected areas.
Getting the best price and keeping the client happy are important but competition means choice in other areas as well. There are differences in product specifications, presentation requirements and even invoicing between the different suppliers and these can all affect the printer or mailing house’s profitability. Collection of mail a couple of hours later in the day, for instance, can make a significant difference.
The changes in postal regulation that came into effect at the beginning of April mean that we are likely to see a much more dynamic market in the future with frequent changes in pricing, specification and even products.
This will mean more differentiation between postal suppliers and more options for users to choose from. Although it might be difficult for some, those companies that are able to take advantage of the different product offerings that will be available will have a significant competitive advantage by offering their clients the most cost-effective postal solutions.
