Post Office rival delivers results

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Businesses and members of the public frustrated with the long queues at the Post Office have started to turn to other providers to ensure their mail is delivered on time.

One such company is Post and Packing UK, whose founder Martyn Filby has declared its store on Mount Pleasant Road, which opened 18 months ago, as a ‘huge success’.

It was the first store to be opened outside of the company’s headquarters at Kings Hill.

The independent firm is taking on the might of the established players with plans for rapid expansion in the year ahead, offering a back to basics approach to mail and parcel delivery.

By not getting weighed down with the provision of additional services, such as pensions, TV licences and broadband, Post and Packing UK has a business model which plays to its core strengths.

Competitors

In effect, the company uses its links with other providers of mail delivery services, such as Royal Mail, UPS or Fed-Ex, to ensure the customer will get the best deal when delivering letters or packages.

Mr Filby said: “As far as mail delivery goes we feel we offer a wide range and cover a lot of bases.

“This is because our business model utilises the services of our competitors to ensure we can offer our customers a wide range of mail based services.

“People like this because they can just drop by and post a letter or a parcel, which we can package for them, and do not have to queue.”

By depending on third parties to deliver the actual mail, Post and Packing UK is in effect both competing with, and reliant upon, its potential rivals.

But this situation has its advantages, especially for the customer, as the company uses its connections to find the most suitable service for their needs.

And utilising the services of other providers, such as Royal Mail, has other benefits too, Mr Filby explained, adding: “The way we operate is a bit like Vodafone using the BT network. It relies on BT at one level but still competes for customers.

“This has given us an infrastructure which allows us to operate in an industry where margins are traditionally quite tight, and by utilising economies of scale we can improve these margins and pass on savings”.

This drive for economies of scale will see the company open an additional 14 stores this year, bringing its total to 20.

With a strategic aim to ‘encircle’ Greater London Mr Filby believes the company will only be restrained by lack of suitable locations.

In addition, it is not planning to take on debt to drive the expansion but rely on organic growth.

This means each store has to reach its break-even point of around £250,000 turnover per year, quite rapidly, a feat Mr Filby believes is doable: “We pick sites which we think can be in a profit quite rapidly.

“The only thing which can stop us expanding is the units not being in the right place. It has to have the right demographics, with a good mix of business and residential.

“It also cannot be too close to an existing post office, any yet has to be close enough for our infrastructure.

“More stores mean more buying power for us so it gets easier to make savings.”

In addition to funding its own expansion through directly owned stores, the firm is looking to franchise is model, with four potential franchises expressing an interest in Leicester?

The company’s structure allows it to handle a huge volume of letters and parcels.

At the Post and Packing store in Tunbridge Wells, over 37,000 Christmas cards with second class stamps were handled in the week and a half before the effective cut off day on 18 December, including 4,000 in one day.

The firm also handled 4,500 cards with a first class stamp.

In the future, Mr Filby believes there will be a move towards consolidation of the mail market.

He said: “There will be others who come along. But at the end of the day the large companies will bring it all together.”