Franking machines are a great way to add speed, professionalism, and savings to your daily mail making it a great tool in helping your businesses grow. The initial purchase price, however, which can set you back nearly £500 for a basic model and many thousands for a high volume machine, can be tough especially for small businesses with a keen eye on cash flow.
The solution provided by some of the franking companies is franking machine rental. You will be able to enjoy the benefits of franking straight away with very little outlay. You also don’t have to worry about repairs and maintenance and postage rate changes which are usually included in the agreement. Most suppliers of franking machines also offer a rental agreement, the agreements are usually are flexible in that if you wanted to renegotiate for a higher volume machine as your business grows down the line you can change machines.
It should be noted that a rental agreement is different to a hire purchase or leasing agreement where you do get to keep the machine at the end of the agreed terms. The main advantage is that you do not need to enter a formal financial agreement and do not require a credit history in order to be able to enter a contract; you also have the option with some companies to change machines and you may have a higher degree of machine maintenance.
Franking Machine rental agreements are just that – renting, at the end of the terms you hand the machine back. This can work out well since the plans are anything up to 5 years, if you change agreements you will get a brand new machine, and it probably would be time for an upgrade.
Advantages of Renting
The first advantage of renting is the small initial investment. You can rent a franking machine for as little as £14.99 per month. You also don’t have to worry about repairs and maintenance. These are usually included in the agreement. It is always worth to ask if the monthly price includes the service and warranty, as many companies add this as an additional charge. The charges for topping up the machine is also something to take into consideration.
Franking machine rental is great for the changing business since the rental contracts are usually quite flexible, you can upgrade or downgrade your model whenever you need to. You also have access to the latest technology because of this feature.
Things to look out for
Negotiate, negotiate, negotiate. The companies compete hard for your business and if you push, they will give special offers to get you on board.
Think carefully before entering a long plan once you are tied into a contract you can’t just easily terminate it. Some suppliers don’t allow it while some will ask you to pay a termination fee.
Generally, the cost in the long run, is higher than purchasing the machine outright, you also need to be aware of top-up charges, service fees, Royal mail postage changes and, maintenance.
Where can you rent?
Most major manufacturers rent out their franking machines – Pitney Bowes, Neopost and FP. There are also other independent suppliers with their own in-house brands, some also offer these popular brands for rent. Just be sure that you are renting from a Royal Mail approved supplier for compliance.
Rental rates depend on the model you choose and the length of the contract you enter into. The shortest contract is a year and for low volume we recommended the Pitney Bowes DM60. This is a great starter to ensure franking is for you, Prices start 19.95 + VAT directly from Pitney Bowes but there are other independent suppliers that also offer the same machine at a similar price. A smaller independent company can offer a more personalised approach and you are likely to get a dedicated account manager that can help with any queries you may have.
If you are looking for lower costs then Mailcomms offer a 6-year contract at 14.95+VAT.
Medium volume equipment starts at £90 to £180. For high-volume models, you can expect to pay around £200 to £500 per month. These fees usually already include service and support.
Before you Rent
First, find out your daily mail volume. How long do you see your volume at this level? You may want to inform your supplier right away if you see growth in the next 6 months so that your contract can be flexible.
Next thing to consider is space. Entry-level systems are small and compact but can’t process a lot of mails.
Your monthly budget is also a priority. Again, it may be cheaper for you to purchase new equipment right away. If you can’t-do that, you can also opt to rent for the time being as you save up for a higher model.
Find out if your supplier offers starter packs and free items. Your consumables such as ink cartridges and labels will take up the bulk of your monthly budget. If you can get these for free on your first month, then you can at least save a bit.
You should ask your supplier to explain anything in the contract that you don’t understand. You should also ask if they have engineers that are ready to fix your machine should the need arise and how long their response time is. If they need to take out your machine, will they send you a replacement?
Check on the costs of the maintenance, more often than not the cost of repair of the machine is not covered in the rental agreement, you will need to pay a yearly charge to cover this. The costs can vary according to the company but you will be looking at approximately £200/year on top of the rental agreements price. This can easily be worth the money should the machine break down and ongoing maintenance and servicing is a vital part of the longevity of the machine.
Finding a supplier
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