An envelope or package cutting system for cutting a material having a surface. The envelope cutting system includes a cutting unit and at least one template having the opening that is the shape of an unfolded envelope. The cutting unit includes a frame, a blade adjustment assembly and a blade assembly which are coupled to the frame. The blade assembly is positioned at least partially within the frame such that a longitudinal axis of the blade assembly is substantially perpendicular to a lower support surface of the frame. The blade assembly includes a blade retainer and a blade connected to the retainer. A rigid collar of the retainer is configured to operatively engage at least one of a periphery and the edge of the opening of the template thereby enabling the blade to cut a shape in the cutting material which assimilates the shape of an unfolded envelope.