I visited the US Postal Service stand at the CES show in Las Vegas yesterday and discovered that they are in the middle of a major push to attract shoppers online and away from post offices.
They say that online shoppers cost them less to process. I can understand that given the cost of retail real estate and labour.
They have significantly improved their online services to make a more compelling appeal to online shoppers, and to cut their costs. They are not only chasing volume businesses but also small businesses and individuals.
While we have seen this trend by lottery companies, publishers and some others in Australia, I had not expected to see it in the postage space. But it makes sense when you think about.
While the USPS stand at CES was not as busy as most other stands, that they were there with the message of shop online rather than at a Post Office it pretty interesting and telling.
I’d like to know where Australia Post as at in this space, particularly given that of the 3,500 or so licensed post offices, many are in newsagencies. While I wouldn’t blame them if they did have a plan to migrate over the counter business to online, I would want them to fully inform current and potential franchisees early in their consideration.
There already is some online product available from Aus Post, particularly aimed at the Ebay market. They offset the online sale of the track and send item (think I’ve got the name wrong ) tag by paying the post office where its lodged a small handling fee.
The major difference between USPS and Aus Post is that Aus Post has been chasing and developing non traditional areas of the business that still require a counter service. The increasing amount of government services being handled is one of these areas (Birth certificates, certain licence type processing etc and with more coming online).
The opportunity for the newsagency channel is in the handling of parcels.
One of the flaws in the Australia Post model is that of final delivery of parcels to the consignee. This is handled by contractors who have sunk cost in vehicles and labour who attempt to deliver parcels to peoples homes. They are paid a nominal fee per parcel for delivery, or attempted delivery. If the consignee is not home they leave a card and bring the parcel to a corporate PO or an LPO.
The corporate PO is open from 9-5, M-F for the consignee to then collect the parcel. Aggravated customers are complaining about this.
Aust Post is looking at ways to have collection points that are open after hours. We have an LPO in our Newsagency which is open 0530-600 Monday to Saturday. We distribute on year round average 90 plus parcels per day. Within these hours we do not get any complaints from our customers. We hold parcels for up to a week so people can get them on Saturdays if they can’t get in during the week. We have a dedicated secure parcel room with shelving, dedicated vehicle parking and staff trained to process the parcels. Some of the “parcels” we receive are large, bulky and heavy, requiring 2 persons to handle.
Guess what we earn from this activity:
ZILCH a big fat zero. We rely on the 90 or so customers coming in each day to want also to buy something in our shop. It functions mainly as a community service but also a traffic generator.
In most internet transactions the buyer pays the seller a postage fee. There is a definite trend for the seller to be taking more margin from this. There has not been any increase in fees paid to the delivery side, ie the contractor and the LPO. Thus the pricing model is inefficient
We suggest that for the convenience of of being able to collect the parcel from a local point customers will be willing to pay a fee. Our estimate is that they will very quickly get used to paying between $2 and $4 per parcel.
Australia Post have their heads in the sand and are not seeing at all the lost opportunity to commercialise extended parcel collection hours at LPOs which are open way beyond the hours they keep in their union controlled corporate shops.
Kevin, you should be earning money from those extra parcels as an addittional payment on your monthly LIPOMS. I certainly do. We had to have the number of parcels we were handling reassessed and as we were handling over 40 a day quite regularly we are paid an addittional fee which was actually back dated. If you’re handling a high volume (beyond 5 -10) per day then you are entitled to be paid for it.
Speak to your area manager (or POAAL if you’re a member) and he should arrange for you to keep the delivery cards and do a count over three months to get an average.
Hi there ,
We run a Sub News , is there a way for us to stock / sell postage stamps , express post envelopes