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Evaluating Post, Courier, and Delivery Franchises

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evaluation

There are many courier franchise opportunities and you should investigate them all. This summary is our opinion of the key principles, services and products of these opportunities. of our competitors and their products, in our opinion.

It is as important for you, as it is to us, to choose what is the right franchise for YOU!

Driver Franchise

Such as: DPD or Yodel or Amazon Franchise

Overview: It’s a driver franchise where you (and others, in time, you can recruit) are running multi drop deliveries in an area. You don’t have to do sales, your collections and deliveries are prescribed to you every day. You don’t have to have a depot, just a van and the potential to build a turnover of £140k to £170k in 3 years by adding delivery groups. You will be part of a HUGE well funded organisation and (so tech should be ace) organisation.

Some of the Benefits:

Theses DPD, Amazon or Yodel franchises work really well if you are not into sales and business development. We don’t gift you work. Yet. These franchises tend to be lower costs and some can even help you acquire vehicles.

The diamond Difference:

We don’t delivery multi drop – we collect from our own clients and either input into 10+ of the major carriers or we despatch via our own band of subcontractors.

We are also small and personal. Although we are growing fast – it’s more like joining a family here –not a corporation. So you need to make your call regarding culture.

At diamond you do need to sell and build you own client base in the local area. If you’re not a sales person then you’ll need to partner with one.

Consolidators Type Franchises

Such as: InExpress/World Options

Overview: It’s a reseller model. Primarily the carriers collect direct from your clients, and you bill and do customer services. They have many franchises around the UK.  Some are international brands and have 15+ year experience in the UK.  You build up local clients and service them via external subcontractors – with the carriers collecting directly from the client.  Franchises cost circa £30k.  I am not sure if you get geographical exclusivity.

Benefits: You don’t have to have logistics experience.  The businesses can be run from home or a very small office. Its low capital investment and can be run part time.

The diamond Difference: Our franchise opportunity is not for someone who wants a lifestyle business. Its hard graft – with the rewards that accompany that.

As consolidators we like to develop close relationships with our own clients. We manage them closely including collections daily. 

Our local crew deliver the same day direct too – it’s not outsourced to the companies like Citysprint who work with InExpress for example.

We believe consolidation is a sustainable system benefiting the carriers – servicing the niche below their optimum client revenue – which enable our carrier to access volume without the challenge of collecting from 1000’s of smaller customers, with the ensuing administration. This consolidation makes it very mutually beneficial for our carriers – so they love it. And that volume in consolidation buys us preferential rates too.

We have to have proper depots because of our diamond fulfilment - we store, pick and despatch stuff for our clients and this market is BOOMING. In fact my storage and fulfilment in Guildford is 50% of my revenue now.

Plus our franchise costs start from £14998 plus training dependant on area. We insist that more investment goes in to building your business, not in our fees, so equal capital is needed. But your investment is best spent on your depot, not our franchise fee.

You also get geographic exclusivity of a HUGE areas, so you can expand and preserve your area. 

Same Day Courier Only Franchises

Such as: Speedy Freight or Atlas

Overview: Speedy Freight is a same day courier franchise. It centralised admin and gives you a proven formulae to start as same day company. Their franchise starts from £33500.

Some of the benefits: Centralised admin, training and a template to build your business. Simple business model so easy to learn.

The diamond Difference: At diamond, back in the day, we used to be same day only – but finding new clients started to be a bit like finding a needle in a haystack. Don’t get me wrong – same day still represent 1/3 of my turnover – but to grow and stabilise I fully believed I need to diversify into other services.  Same day has been in decline in the UK since 2008 so we diversified in 2011 to add multi carrier overnight solutions to our services list plus add storage and fulfilment to enjoy the opportunity that the online revolution has brought to us.

Basically when I had just a same day company I was totally reliant on just one service. And same day can be erratic. Now with three services I can just about service any clients need – from big to small, overnight to international to UK, and I get my rent paid for by all my storage clients – and I earn revenue from all their despatches.  It’s just like a three legged stool – nice and steady.

Carrier Network Franchises

Such as: APC/XDP/Interlink/Palletways

Overview: To be a Carrier Network Franchisee you purchase an area and have to provide the delivery infrastructure in that area – say PE (Peterborough). So you would provide vans and when the hub send you your daily deliveries you then deliver them first thing in the morning. You may need to have your depot open from 0400 to receive your goods, and your night trunk may be as late as 10pm – there is a big time commitment.

In most of these networks profit is not made on deliveries. You make money on the afternoon collections from your own clients. You have to run this huge operation to buy the right to input in to the network at cost rates. And there can be weight restrictions on what you can ship, which can reduce the goods you can despatch.

Some of the Benefits: You are usually up and running with turnover form day one – busy with your deliveries. Some of these networks are very well established and growing well. Check their accounts to see who’s running well. There are some very wealthy original founders of these networks who have had the prime postcodes for years.

The diamond Difference: Now when I worked consulting within a pallet network (their model is very similar) in 2010 and 2011 I decided this model was not for me. Why? Because the onus, stress and strain is on the local depot. When deliveries go down, as they did then – you still have a capital infrastructure to support - it’s not economically dynamic enough to ensure you can cut your costs in event of a down turn of work.  You have so many trucks and vans and drivers and fuel.

So bearing in mind, mostly network members make money on the collection they input, I decided to cut out the deliveries and create a great collection only model for the overnight element of our business. Less turnover, more profit. I wanted to build great working relationships with established carriers and I certainly didn’t want a depot that had to be open at 0400 and closed at 2200.

Retail Postal and Courier Franchises

Such as: Pack and Send, Mailboxes

Overview: These are retail opportunities and have a walk in store with global names and brand recognition that will drive some work in to you from day one.

You need retail premises with a shop front, and quite a bit of money to capitalise – up to £85,000 and £130,000 (including working capital) of which franchisees would need to have at least 30% - 50% as liquid funds for Pack and Send for example (website 18012017).  And its more of a consumer led business.

Some of the Benefits:  A recognisable high street brand. Access to consumer market and walk ins. And access to removals market.

The diamond Difference: At Diamond we are B2B – all out clients are businesses – and they may deliver to consumers but we personally deal with businesses. It’s a different space that tends to have repeat business with a higher net value per long term client relationship. We don’t tend to do much in the removals space. Lost of furniture deliveries but household removals.

If you think a diamond franchise might be the one you are looking for then here’s the even better news:

Modular franchises start from as little as £12K with a full exclusive franchise from £30k.

I hope our thoughts help you evaluate the market and helps you to decide what kind of franchise might be right for you.

Get in touch if you have any questions to kate@diamondlogistics.co.uk or call 07974 015635