Earlier this week we wrote about the challenges that Royal Mail has given Internet commerce and small businesses. Now comes what could be a killer blow in the news that Royal Mail has now lost a crucial contract with its second largest customer, Amazon. Now parcels over 500 grams and will use a rival service, Home Delivery Network (HDN), which also used by other large home delivery services such as Tesco and Argos.
The news of a national strike announcement by the Communication Workers Union is likely to introduce further competition. Local strikes have been spreading with 24-hour stoppages hitting major cities across the country and the service being at best inconsistent and at worst non-existent.
The strikes is not only hitting Amazon others such as eBay whose small business users are now being effectively penalised by negative customer feedback and on their online reliability ratings.
Showing posts with label postal costs. Show all posts
Showing posts with label postal costs. Show all posts
Thursday, October 08, 2009
Monday, October 05, 2009
Goods Still Have To Be Delivered
In 2001 UK’s Royal Mail service tried to rebrand itself as Consignia, but soon rebranded itself back as Royal Mail. Having wasted public funds, it must have realized it already had the perfect brand name. However, rebranding was the least of its challenges as it grappled to make itself more commercially viable and deal with many internal inefficient practices and processes.
Today the UK industry and public find themselves once again at the mercy of a workforce and its ability to strike at will. They are pretty good at this and can claim some consistency, both in their timing and frequency. Only yesterday, my wife was looking for a letter to send to her customers to apologize about Royal Mail, only to find the perfect one written only two years old, at the same time of year and on the same subject.
In this digital age of tweets, email, texts and social networks we all still rely heavily on the post. The mail order and ecommerce businesses may now have digital catalogues and be online, but the physical goods still need to be shipped and for many the physical catalogue still needs to be posted. Package companies may now take much of the strain, but for small deliveries still the Royal Mail still works. Only yesterday we received a SIM card replacement that was dispatch first class on the 21st September! Some things come quicker, but the current wave of strikes are heavily disrupting the postal service.
However, it is heartening to see new models starting to appear. One such model is being rolled out by a major mail order organization and is based on delivery to the local store, where parcels will be held for collection. This gives customers a safe place to deliver to when there is no one at home and also provides the opportunity for them to visit the store. It also enables the carrier to consolidate deliveries and in general is a ‘win win’ for many. The one of the first independent retailers to move onto the service is a mail order bookclub who are planning to go live and offer the service to their customers across the UK.
It is interesting that out of adversity pioneering solutions often are born.
Today the UK industry and public find themselves once again at the mercy of a workforce and its ability to strike at will. They are pretty good at this and can claim some consistency, both in their timing and frequency. Only yesterday, my wife was looking for a letter to send to her customers to apologize about Royal Mail, only to find the perfect one written only two years old, at the same time of year and on the same subject.
In this digital age of tweets, email, texts and social networks we all still rely heavily on the post. The mail order and ecommerce businesses may now have digital catalogues and be online, but the physical goods still need to be shipped and for many the physical catalogue still needs to be posted. Package companies may now take much of the strain, but for small deliveries still the Royal Mail still works. Only yesterday we received a SIM card replacement that was dispatch first class on the 21st September! Some things come quicker, but the current wave of strikes are heavily disrupting the postal service.
However, it is heartening to see new models starting to appear. One such model is being rolled out by a major mail order organization and is based on delivery to the local store, where parcels will be held for collection. This gives customers a safe place to deliver to when there is no one at home and also provides the opportunity for them to visit the store. It also enables the carrier to consolidate deliveries and in general is a ‘win win’ for many. The one of the first independent retailers to move onto the service is a mail order bookclub who are planning to go live and offer the service to their customers across the UK.
It is interesting that out of adversity pioneering solutions often are born.
Friday, April 11, 2008
Internet Selling Relies on Post
All Internet and mail order businesses are very dependant on effective postal and shipping services. If a physical catalogue has to be posted, it costs. The shipped order may appear free to the consumer but is not free to the seller. If the goods are bulky they can often be carried by private companies but if they are small, say a single book, or are to places such as the highlands and islands, they invariably are handled by the likes of the Post Office.
Often postal charges and rules are complex and can be based on size and weight. Importantly they are non negotiable. They can be passed directly on to the consumer or subsidised or merely included in the price of the goods. As we all try to reach new consumers, new markets and do more business over the Internet they are a cost that is not going away.
So it’s interesting to see that we not only have the carriers now pushing up their prices both in the UK and US but that this is also being done by other effected parties.
Can you remember when Abebooks last wrenched up their commission there was much noise about them exploiting their market position. Last week they did it again and this time it simply flew past most observers unnoticed. They cite the currency exchange rate at dramatically impacting their buying power by 30% over the last 5 years. As a result from the end of the month they will raise subscription rates for sellers listing over 50,000 titles on the service. Yes we said 50,000 and they have a rate card for those with over 500,000 listings!
However, far more relevant is the news that Abe now are including shipping and any extra charges into their 8% commission charge. They cite ‘our customer feedback indicates buyers are unhappy with unusually high shipping costs. We want to avoid the negative buyer experience created by very low book prices that are subsidised by higher shipping charges.’
Abe is clearly a global trading operation and facilitates the selling and buying of many rare and hard to find books and often you can find a wide range of prices, locations and shipping costs available. What Abe has done has effectively not only made the vast range of titles available but in doing so has introduced more competitive pricing which in turn has lowered their own commission. If the unit price drops then the commission payable costs – that is until you start to include the one often fixed cost that is hard to effect – shipping. Abe’s business is about lots of single shipment orders so shipment is usually against a single book. The impact is that many will have to increase the cost of the books to offset the shipping cost being included. Where the cost of the book is high the shipping charges may have relative little impact.
Often postal charges and rules are complex and can be based on size and weight. Importantly they are non negotiable. They can be passed directly on to the consumer or subsidised or merely included in the price of the goods. As we all try to reach new consumers, new markets and do more business over the Internet they are a cost that is not going away.
So it’s interesting to see that we not only have the carriers now pushing up their prices both in the UK and US but that this is also being done by other effected parties.
Can you remember when Abebooks last wrenched up their commission there was much noise about them exploiting their market position. Last week they did it again and this time it simply flew past most observers unnoticed. They cite the currency exchange rate at dramatically impacting their buying power by 30% over the last 5 years. As a result from the end of the month they will raise subscription rates for sellers listing over 50,000 titles on the service. Yes we said 50,000 and they have a rate card for those with over 500,000 listings!
However, far more relevant is the news that Abe now are including shipping and any extra charges into their 8% commission charge. They cite ‘our customer feedback indicates buyers are unhappy with unusually high shipping costs. We want to avoid the negative buyer experience created by very low book prices that are subsidised by higher shipping charges.’
Abe is clearly a global trading operation and facilitates the selling and buying of many rare and hard to find books and often you can find a wide range of prices, locations and shipping costs available. What Abe has done has effectively not only made the vast range of titles available but in doing so has introduced more competitive pricing which in turn has lowered their own commission. If the unit price drops then the commission payable costs – that is until you start to include the one often fixed cost that is hard to effect – shipping. Abe’s business is about lots of single shipment orders so shipment is usually against a single book. The impact is that many will have to increase the cost of the books to offset the shipping cost being included. Where the cost of the book is high the shipping charges may have relative little impact.
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