Why You Should Start a Courier Franchise

Originally posted on 11/09/2017. Updated on 12/04/2019.

Letters as a main means of communication are on the decline, with the younger generation favouring communicating by different mediums, whether that be text, email or the various social media platforms. With an advance in technology, sending letters is often more time consuming, and is sometimes an unnecessary use of paper. Of course, opting for the more traditional approach of receiving letters from banks etc. is generally still favoured by the older generation or people without access to the internet.

The parcel delivery market, on the other hand, is set to flourish.

Insight into the Market

Apex Insight estimated that the global parcels market was $350 billion in 2017, a $40 billion increase from the year before. Research also indicates that there is an increase in UK parcel-generated revenue each year. In 2017-2018, there was a five percent growth in total revenues in comparison to 2016-2017, reaching £9.4 billion (Ofcom). The volume of parcels accelerated too, with an 11 percent increase, reaching 2.4 billion items in 2017-2018 (Ofcom).

Read more:

• Courier Service UK: Deliver Business Success with a Franchise
• Business on Wheels: Start a Courier Franchise

Why is there growth?

The fact that Brits can’t get enough of online shopping is one of the reasons for this substantial growth. Consumers are steering clear of busy shopping centres and having to wait in long queues for changing rooms and tills. According to research by British Retail Consortium, the UK’s online shopping trend is booming. The online sales of non-food items have soared over the last five years, from 11.6 percent of the total market in December 2012, to 24.1 percent in December 2017. Also, in 2021, over 2.14 billion people across the globe are expected to buy goods and services online, up from 1.66 billion in 2016.

Leading Parcel Sector

As the UK economy is recovering from the economic crisis, the B2B (business-to-business) segment is set to improve too. Although, with the current uncertainty of Brexit, it has not yet been decided what impact this will have on EU-UK trade, as this will depend on the UK and the EU’s relationship once the UK has left. Apex Insight also found that the B2B sector of parcel delivery accounts for 54 percent of the UK market by revenue.

The B2C (business-to-consumer) segment is less stable, accounting for 34 percent of the market. Then there’s the relatively new, emerging C2X (consumer-to-all-parties) segment, with 11 percent of the market, consisting of eBay and Depop-type sellers which rely on delivery services to sell and buy products. In essence, is central to the functioning of their business model.

We can put parcel delivery franchises into two categories. Smaller courier franchises are probably a better idea for franchisees just starting out becoming their own boss, in comparison to larger depot-based franchise opportunities.

So, what are the advantages of a courier franchise?

There is an abundance of advantages to starting a courier franchise rather than starting from scratch. Take a look below at four of the most prominent ones.

Reputable brand name – When putting an important document in a letter box or dropping an expensive parcel off at the post office, consumers want to use a service they can trust. Starting a franchise - as opposed to an independent - courier business allows you to operate under a well-known brand name. And with established brand recognition comes an existing customer base that should help you get off to a great start.

Don’t need experience in industry – Like with the majority of franchises, the main characteristics you need to succeed are being motivated, dedicated, passionate, hard working and business-minded. It isn’t usually essential to have experience in the industry to be considered as a franchisee, as franchisors offer initial training and ongoing coaching. Therefore, almost anyone can start a courier business if there are ambitious and can follow instructions well.

Room for growth – According to Market Research Hub’s report ‘Global Courier Express and Parcel Market Size, Status and Forecast 2025’, there is set to be a double-digit growth in the industry in the near future. Therefore, with the anticipated growth in the sector, there are countless opportunities available for savvy entrepreneurs hoping to buy a business with the potential for expansion.

Low initial investment – According to the British Franchise Association, the average cost of setting up a franchise is £42,000. A courier business that doesn’t boast a huge territory can get off the ground for as little as £6,000 and usually costs up to £20,000. A depot-based franchise is likely to cost between £20,000 and £60,000.

However, despite the initial investment being low, there are additional fees which are important to consider before giving the go-ahead.

• Employees. Hiring drivers or other managerial employees will, of course, cost money, both in the recruitment process and in ongoing wages.
• Insurance. You’ll need to ensure that your business is running safely.
• Vehicles, maintenance and fuel. It will cost money to lease the vehicles you use for deliveries and this will be the principal outlay at the start. Also, consider the cost of fuel and maintenance.
• Franchise renewal fees. If you wish to extent your contract, there is often a renewal fee.
• Space and equipment. When managing a depot, it will probably be down to you to pay for its furnishings and equipment, and even the premises.
• Marketing. Regardless of whether you pay advertising fees, it’s your duty to market your franchise and pay for the associated costs.

It’s important to consider that a delivery franchise is usually open unsociable hours - often 24/7 - offering overnight, same-day and even international delivery options. Therefore, in order to keep ahead of the competition, you need to be flexible. Particularly at the start, don’t be surprised by lengthy, tiresome shifts.

If starting a courier and delivery franchise is something you are interested in, there are numerous opportunities available. Take a look below at three of our best franchises currently looking for franchisees for you to consider.

InExpress

This international shipping and freight consulting franchise has a proven tack record of success. It has operated in 13 countries since 1999 and therefore has all the necessary expertise to train and support its franchisees. The ideal InExpress franchisee is sales-minded, is passionate about business and will thrive selling and marketing the brand’s services. In order to invest, you will need a minimum investment of £15,000 and a total investment of £30,000.

Mail Boxes Etc.

Mail Boxes Etc. is one of the world’s largest networks of local and international parcel delivery, with expert packaging, design, print and copy. Founded in California in 1980, this franchise has since expanded to include over 150 stores in the UK and Ireland. The innovative franchise operates from an impressive 1,600 stores across the globe. A minimum investment of £25,000 is required, along with a total investment of £60,000.

Post & Packaging

This is a post shop for retail and business that offers a variety of services, including archiving services, eBay and online sellers, courier services, post box rental, storage services and lots more. Founded in 2012, there are now shops dotted all over the UK.

In order to invest in a Post & Packaging franchise, you will need a minimum investment of £25,000.
 

Becky Martin, Point Franchise ©