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Postage Changes

There’s good news and there’s bad news.

The good news is that all UK parcels are now being sent via Royal Mail’s tracked 48 service.

The bad news is that we’re not offering free postage anymore.

There is likely to be more industrial action by Royal Mail workers this year and the Signed For service that we used to use wasn’t adequate. The purpose of Signed For is for the sender to demonstrate proof that the item has been sent and for the sender to have proof of delivery once it has arrived. When items are stuck in a depot for 3 weeks then the person receiving the parcel only has a tracking number that doesn’t work as proof their item has been sent. The tracked service at least will give reassurance to customers that their item is on the way, updates along the way and notifications on the day of delivery.

The downside is that this service is a lot more expensive. Royal Mail offers bulk discounts but we don’t qualify for them as we don’t send enough parcels a year. The good news is that Gear4Geeks will absorb the extra cost and postage will stay the same.

That added expense is why free postage has had to end.

Gear4Geeks was doing okay until Pulse opened. Most retailers have seen massive decreases in sales of their Hasbro product and since then the only way independent retailers have been able to achieve sales is to be competitive on pricing.

On a £50 order the profit is approximately 20%, so £10. So deduct the credit card processing fee, the £4 postage was costing plus approximately £1 in the cost of the box and packing materials then the profit was around £4. The idea was that the business would scale and the eventual discount from the Royal Mail would make up for it, but after 2 years that hasn’t happened (thanks Pulse!). With postage now costing an extra £2, a £2 profit on a £50 order just isn’t realistic.

As with everything, adaptation is key and the better postal service will hopefully give an even better experience to customers. From there we can work on continuing to bring you the best value we can.