Q? Royal Mail OBA /PPI

[JMugs]

Question
Just in the process of setting up the OBA with Royal Mail...they are really slow but that's another story.

I have received the email saying I can have a stamp or they will set up a template for avery labels etc. I can also get them pre-printed by an outside company.

What do those with OBA do and why?

Cheers

Janners

[pisquee]

We preprint large address labels which include all the OBA logos and info, along with our company logo and return address. We then hand write the recipient details on them, or print the sheets with details already included depending on the delivery batch that day.

[JMugs]

Cheers Pisquee, another option there. So many choices!

[GoonerGary]

Watch your label costs as it's only a 16p saving per mug, all those pennies count when it gives you extra work.

[JMugs]

Hi Gary
Indeed, one of the reasons I went with trying OBA first was that there is no commitment, if it works, great, if it doesn't I'll look more closely at franking.

[pisquee]

We're seeing it as less work to use OBA, compared to going to post office and using stamps, waiting in the queue etc. Everything we need to send the parcel is on the address label, the size we were already using anyway, put them in the sack with the A4 printed sheet of what is booked in (essentially amount of parcels and average weight) and drop them in a trolley at the delivery office (or in the pile at the post office)
With the Royal Mail 24 and 48 hour services having VAT, rather than standard 1st/2nd Class which are VAT exempt, means the RM24/48 are much cheaper than 16p if you register for VAT - I would definitely recommend people sit down and work out whether they'd be better off registered of not.
1st Class (for a box upto 35x45x16cm) up to 1kg = £3.00
RM 24 (for a box upto 46x46x61cm) upto 1kg = £2.53 (+VAT which you claim back if you're VAT registered)

[JMugs]

Even with VAT £1.98 plus VAT = £2.38 as opposed to £2.80 so a 42p saving.

It is the less work that ticks the box for me as well.

As for VAT registration been there, done that and every quarter had to pay the VAT man. Now changed business with a way smaller turnover (about 35x smaller!).

Janners

[GoonerGary]

- I would definitely recommend people sit down and work out whether they'd be better off registered of not.

When is it ever good to be VAT registered? I'm not interested in my business profile to other people and I can't raise my prices. I did a quick calculation based on a single box of mugs.

36 mugs bought at £33 plus £6.60 VAT.
Postage £8 VAT on that would be £1.33
Royal postage £1.98 plus VAT = 40p x 36 mugs posted out = £14.26 VAT

So VAT man gives me back £22.19

I've charged £10 x 36 mugs = £360

VAT man gets 20% which is £60.

So because I can't raise my prices I'm £37.81 poorer on that box of mugs sold. Have I missed something obvious?

Register for VAT or take holidays!

[pisquee]

For us it is more the claiming back of VAT paid out on things which aren't the actual products/materials - tradeshows are a huge expense for us each year, and being able to claim back the VAT on those is a huge bonus, along with equipment. As most of our sales are wholesale to shops, then there is also advantages in terms of the majority of our customers are then also VAT registered so not really seeing the VAT element of what we sell.

We timed our registration time this year to make sure we could claim back not only the majority of tradeshows we did this year, but also the set-up cost of our new website ... think we had a rebate of around £1500 which was a great bonus to get all that dead money back.

[pisquee]

Even with VAT £1.98 plus VAT = £2.38 as opposed to £2.80 so a 42p saving.

42p doesn't sound much, but as a percentage how much have you saved on the initial price? in those terms it's a good chunk of money that will add up significantly over the year. Add to that the advantage of just dropping it in a sack and getting billed a month later automatically.

The size increase of the box also helps with some larger products which we were having to courier but can send much cheaper.