I used to have a freepost licence - it was (I think) about £150 to set up, then you paid second class rate for every envelope delivered.
It was OK for a while, but then they made the registration fee an annual thing. You can buy a lot of second class stamps for £150 - now I just stick stamps on my envelopes.
Another thing - the Post Office was rubbish at record keeping and sometimes overcharged me by up to 30% on the supposed number of envelopes delivered.