How do royal mail make money

Royal Mail, the UK's postal service, generates revenue through a variety of channels. Here are some of the main ways they make money:

  1. Letter and Parcel Delivery: The core business of Royal Mail is delivering mail and parcels to customers. They charge a fee for each item delivered, which is based on the weight, size, and destination of the item.
  2. Stamp Sales: Royal Mail sells postage stamps to customers, which are used to pay for the delivery of mail and parcels. They also sell commemorative stamps and other philatelic products.
  3. Advertising: Royal Mail's vehicles and mailboxes are used to display advertisements, generating revenue for the company.
  4. Financial Services: Royal Mail offers a range of financial services, including savings accounts, insurance products, and loans. They earn interest on these products and charge fees for their services.
  5. Logistics and Courier Services: Royal Mail provides logistics and courier services to businesses, including same-day delivery, next-day delivery, and international shipping.
  6. Wholesale Services: Royal Mail sells its services to other companies, such as banks, retailers, and online marketplaces, which use their services to deliver goods to customers.
  7. International Mail: Royal Mail generates revenue from delivering mail and parcels to and from other countries, through agreements with international postal services.
  8. Business Services: Royal Mail offers a range of services to businesses, including mailroom management, document management, and e-commerce shipping solutions.
  9. Property Development: Royal Mail owns a significant portfolio of properties, including post offices, sorting offices, and depots. They generate rental income from these properties and also develop and sell them to generate capital.
  10. Government Subsidies: Royal Mail receives subsidies from the UK government to support its universal service obligation (USO), which requires them to deliver mail and parcels to all parts of the country, regardless of profitability.

In 2020, Royal Mail's revenue was £9.9 billion, with the majority coming from letter and parcel delivery services. They have been working to diversify their revenue streams and reduce their reliance on traditional mail volumes, which have been declining in recent years.