Will e-commerce shipping costs increase after Royal Mail price hike?

Monday, April 15, 2013 - 14:47 by Graham Miller

At the start of the month, the Royal Mail rolled out its annual price rise, which this year was bundled with an additional sting as a result of a 2.5 per cent fuel surcharge, resulting from rising petrol costs.

The Four Source reports that in some cases, customers will be expected to pay up to twice as much to send small packages via the Royal Mail.

There are a number of possibilities facing e-commerce companies when deciding what to do about the increased shipping costs offered by the Royal Mail and consumers will also be impacted when ordering products via safe shopping online from certain sites.

Smaller online retailers may not have the ability to absorb the cost of delivery themselves, so may either have to charge more and risk losing customers, or find alternative carriers for the products that are being shipped.

Experts believe that it is the smaller items in particular that will face the biggest issues, because in some cases, you will actually have to pay more for delivery of the product than it costs to buy outright.

Another option available to e-commerce firms involves downgrading the class of delivery in order to keep costs low, which will result in longer waiting periods for consumers after they have ordered something through safe shopping online.

Anyone who encounters increased shipping costs at their online retailer of choice, could either look elsewhere or consider alternative methods of delivery, such as click & collect, which usually comes with no charge whatsoever.

Price increases at the Royal Mail might mean that fewer people actually use the service, leading to a vicious circle in which prices will have to be raised further, to cope with the usage deficit. There will, doubtlessly, be other companies ready to swoop in and pick up its lost business.