A Business Owner’s Guide to Franking Machines
Franking Machines by definition
A franking machine is not something that makes frankfurters, but rather, it is a machine that’s often found in post offices and other companies that stamps letters or packages automatically. After the stamping, the total cost for the package or letter is then computed for. It also provides information as to where the letter or package originated from and the date when it was sent. This allows postal offices or companies to have a more accurate grip on postage and shipping. It also makes stamping a large number of mails or package very easy because it can handle large volumes of it.
How does a franking machine operate?
Postal offices and companies that require large amounts of letters to be shipped out require the help of a franking machine. Whether you’re a credit collection agency from a small town to a large law firm in a big metropolis, the franking machine offers the same kind of success when it comes to handling large volumes of packages and mails. The machine operates by weighing in all of your outgoing mail or package with complete accuracy so you don’t have to wait in line at the local postal office to process your mail. From a company’s perspective, owners don’t have to send out assistants on a mail run every single time a piece of mail or parcel needs to be franked. With a franking machine present, all the assistant needs to do is place the mail or parcel in the tray and it computes for how much postage is needed.
According to the Royal Mail guidelines, a business owner can avail of a franking machine purchase or rental through these steps:
Browse through the Royal Mail’s list of accredited or authorized manufacturers, inspectors, and maintainers so you will know where to get a franking machine. This will vary depending on your need.
Apply for a license from aforementioned groups.
Payment can be through Direct Debit, Credit Card, or Credit Account with deferred payment terms.
Buy the products that you need from Royal Mail like Special Delivery and international and one-off business collections.
Read through the Legal Scheme for Franking Letters and Parcels 2008.
You need to know how to separate your mail via UK/international destination to save up on expenses and to avoid penalties. You also need to separate by product and class.
A franking machine is not really of a necessity for companies, but if the company is involved with large volumes of mails and parcels, then investing in a franking machine is not a bad idea. If your company is only going to be send out one piece of package or mail every week, the postal office services will be perfect.
Are you looking for a franking machine rental? Get a quote for a lease through this link.
The best way to save money on postage
But let us assume that your company does send out large volumes of mail or packages every single day, like 300 pieces of letters and packages combined? If you were to send this out to the postal office, the process would be tedious because you’d be sending out by batch, then getting charged separately per batch, and then there’s the effort of your running man who will travel from your office to the postal office every time there’s a batch that needs to be shipped. So, how can a franking machine help you save on postage?
Most business owners who own franking machines claim that investing in it has been one of their best moves to date. As of 2012, the price for a first class stamp has gone up by 33% and a second class stamp has gone up 39%, so you can just see where the problem is for those who’re involved in large volumes of mail. If you send out 300 pieces of mail a day at an average of $2.00 per stamp, that would cost you $600 per day on average. Multiply that by 20 working days and you get $12000 a month on mail charges alone. A franking machine would allow you to enjoy huge discounts thanks to Royal Mail.
Today the franking machines being sold or rented to business owners can now accommodate large packages where labels can be printed on and even overseas mail. As mentioned earlier, you can choose the kind of product that you want out of your franking machine depending on your business needs. The franking machines also come in various sizes, also depending on what needs to be franked. Franking machines also vary on the amount of mails they are able to frank in a minute. At best, you can get 10 letters per minute to somewhere around 250 letters per minute.
Now, you need to top your franking machine services because it’s what you need to pay for postage – remember step #3 in the Royal Mail guideline. Every item franked is deducted from your balance and will allow you to keep track of your postage costs accurately.
How much can you save on franking for your business? Get a quote for your own franking machine now!
Should your business have its own franking machine?
Like any business investment, the debate of renting or buying will arise when it comes to big purchases like office space. The franking machine is one of those big purchases that business owners are hesitant to buy because they don’t really see the essence of having their own machine or they are foreseeing the possibility of not being able to use the machine as much as they would want to. For businesses in the UK, UK is the only country that allows you to purchase franking machines outright rather than renting them, but does it make this the right decision?
As mentioned in the guideline from Royal Mail, you can choose to buy or rent a franking machine. When you buy your own machine, you already know the cost upfront and sometimes, the price you pay for buying the machine can be lower than the accumulated expenses that you paid for rent. The cheapest machine available costs £1,000 and can guarantee lifetime ownership with full control of the machine usage.
When you rent a franking machine, you’re not necessarily guaranteed that the machine is brand new or close to it. you may even come across a machine that’s close to being retired by the Royal Mail (yes, the Royal Mail will retire old franking machines as they see fit) so not only are you forced to shell out more money for a new franking machine rental, you are also being strong-armed into spending more money.
Buying your own machine also guarantees you full control over it. This means that you can buy the supplies that you need like ink from anyone you want. When you rent a machine, you’re forced to get the supplies from the company where you rented it. Renting would offer higher lifetime costs in terms of the machine itself and the operating supplies.
Why shouldn’t you buy a franking machine?
Now business owners are tempted to buy their own machine, but buying has very powerful repercussions that can make you regret buying it. before any business owner should buy it, they need to know what the repercussions of buying are:
Service contracts can add more to your monthly expenses because you have to avail of it from the manufacturers, inspectors, or maintainers listed by the Royal Mail. Now, a franking machine is prone to breaking down from time to time, so you need to sign up a service contract with the mentioned groups so you can save up on repair costs. You can choose to charge the service at an annual or monthly rate, depending on which one is more financially convenient.
High initial prices can be a bother if you don’t find the machine that costs £1,000 or if you are forced to buy a bigger or faster machine because of the volume of mail that goes right out your office doors every day. The most expensive machine is priced at £20,000, which is usually the most recent or most powerful machine that a manufacturer can give you.
You need to acquire a license before you can operate your own franking machine. This is because business owners cannot guarantee the Royal Mail that they will use the machine for company usage only. Who knows? They might even charge other people to use their franking machine, so the license comes off as a control and like service contracts, a license will also need to be paid every year.
You will be dealing with obsolete technology, and franking machines are not exempted. The Royal Mail has discretion as to whether or not a machine should be retired, so if they find that your machine needs to be retired, you will have no choice regardless if you bought it a year ago or 5 years ago. This would mean another huge bulk expense coming out of the company. Worst case scenario is you got a machine for 1000p and the Royal Mail retired it 6 months after purchase, so you are forced to buy a newer and more expensive model.
How to decide between buying and renting
The article presents you with two options between buying and renting, with buying as an option being slightly favoured. Think of it this way, a franking machine will be the equivalent of a service car for your business or a brand new office space. You need to make a decision based on how much you need it over its value. Now, if you were to think of a franking machine as the equivalent of a brand new office space, you’ll find that the investment comes more from the side of having to need it because your business’s services will improve. For example, a barber shop or salon that purchases a new and larger office space will allow them to seat more people and allow the shop to earn more money. This is a rational way of deciding as to whether or not you should buy your own machine. If you feel that the business can grow because of the machine, the investment will be worth it.
Now, let’s think of it as the machine being the equivalent of a service car. A company car is something that will be used not as often as one might think unless there’s a need to drive executives around the city every day. A company that sends out 50 pieces of letters a day will probably feel the need to buy their own machine because of the way the rate they are sending out letters. But if your company is going to send out 50 pieces of letters A MONTH, then renting may not be such a bad idea.
The bottom line
A franking machine has been around since the 1600s and it has evolved to the point that it is now able to handle large volumes of letters, small parcels, and even large parcels without any difficulty. Because of its purpose, it has made the lives of every business owner who rented or bought the machine a lot easier. They are able to save money, and yes saving even a dollar or less than that on a daily basis can have a huge impact on your business’ finances if it has accumulated enough. You can ask the Royal Mail for more information about franking machines and how it can help you and your company with logistics.
Thinking twice about buying or renting? Get a quote for both franking machine rental and purchase right here!