EXCLUSIVE: Post Office pledges profit share with parcel sales site

The Post Office (PO) has launched an online parcel sales website and is promising to pay PO retailers a share of all profits

The new system allows customers to purchase postage for parcels directly from the Post Office (PO), then drop the parcels off at nearby branches, the company’s newsletter said.

PO has partnered with carriers DPD and Evri for the website, called Parcels Online

PO retailers are to receive the ‘standard acceptance rate’ for each parcel purchased online when dropped off in-branch. They will also receive a ‘majority’ profit share from sales made on the Parcels Online website.

However, the PO has warned it is likely that in the first year the system will not make ‘significant’ profits, and it will need to build a loyal customer base and raise awareness through marketing, as well as expanding to more branches, before the service takes off.

EXCLUSIVE: Postmasters challenge minister over ‘failing’ Post Office

Only PO branches offering Evri and DPD services will receive drop-offs and the associated acceptance payments. The company told its retailers: “At launch we will have around 3,500 DPD branches live and 1,000 Evri branches. By the end of October this year we expect this to increase to 4,000 and 2,000 respectively.”

Neill O’Sullivan, managing director for mails and parcels, said: “[Profit] is not lifechanging amounts in the first tranche, hopefully it will [be] as it goes forwards. Let’s be realistic, in the first instance it’s going to be small profit as you’d expect from a start-up business.”

The profit share will be paid out to postmasters at the end of the fiscal year in March, the PO said. The firm added that the exact model of the profit share will be decided ‘as soon as possible’, and it will be listening to feedback from the NSFP and postmasters.

Better Retailing understands the CWU is lobbying to ensure different subpostmaster groups receive representation during the discussions.

PO ‘at risk’ of losing customers

The PO added it wanted to capitalise on the 20% of the consumer market exclusively buying their delivery services online, else it is at ‘risk’ of continuing to lose customers to alternate schemes such as locker postage. It added the new online platform is ‘crucial to securing long-term sustainable growth’ for postmasters.

“I don’t think it’s a threat [to branches], it’s a realisation of an opportunity,” Neill O’Sullivan, managing director for mails and parcels claimed. 

Owen Woodley wrote in a newsletter to subpostmasters: ‘I’m personally incredibly excited about launch Parcels Online.  It shows Post Office’s commitment to continue to innovate, invest in and improve our mails proposition. We’ve already made significant progress with initiatives such as PUDO [pick-up drop-off] and selling Evri in branch and this is the next step in our journey.’

Read more Post Office news


This article doesn't have any comments yet, be the first!

Become a member to have your say