A Sydney startup is ramping up its challenge to Australia Post’s parcel business by launching a new satchel service for small business.
Sendle, a door-to-door parcel delivery using technology to drive down the costs of sending parcels, launches Sendle Satchels today, targeting one of the most profitable segments of Australia Post’s business, promising better prices and greater convenience for parcels as small as 500g.
Founder and CEO James Chin Moody says the 500g A4 satchels will be picked up from you and delivered nationally from $6.95.
“We are now cheaper and more convenient than the post office for sending parcels from 500g up to 25kg,” Moody said.
“What we’re offering is the option to send a satchel without needing to line up at the post office and without the need to pre-purchase in bulk to keep costs down.”
Launched in November 2014, Sendle started by concentrating on larger parcels, using private sector couriers. Moody saw an opportunity to take on Australia Post, which has used the parcel side of its business to offset the growing losses on the letter delivery side.
He calculates that Sendle customers have saved 41% compared to heading to the post office to send a parcel. Based on his calculations, that’s nearly $900,000 on the last 100,000 parcels the company sent.
“That’s huge if you’ve got a small business,” he said.
And with Australia Post recently increasing postage costs while simultaneously slowing down delivery times, Moody saw a new opportunity.
“This whole industry has been dominated for a monopoly for so long,” he said.
“True disruption comes when you can save both time and money. A lot of technologies out there save time, but they come at a premium.”
Sendle’s secret is using the empty back haul of couriers dispatched to the suburbs from warehouses that are returning empty-handed. It’s meant they can send a 25kg parcel in a city door-to-door for under $10, or a 10kg from Sydney to Perth for less than half the price of Australia Post.
“The real focus for us was on whether we could unlock that big business infrastructure, which is really efficient, and make available for the small end of town,” Moody said.
“We take big business logistics and make it available to small business and the way we do that is through technology. We’re filling that truck.”
He sees enormous potential in the two million small businesses in Australia who are spending a lot of time on logistics. Even better, delivery is to the door rather than a note from Australia Post telling you to come and pick the parcel up from the post office.
“Our market is people like the Etsy sellers who might sell 10 things a week, and had to line up at the post office each time,” Moody said.
“Anyone can use us. We have a really simple dashboard.”
Moody says they spent the last six months looking at how they’d be able to deliver 500g parcels, having previously offered 2kg, 5kg, 10kg and 25kg categories, and he’s confident it will work.
“This market is actually probably a lot bigger than anyone expected, or we expected, because no one ever does research into small business parcel logistics,” he said.
“The satchel product was the most requested thing that our customers asked for.”
Last year Sendle raised $1.8 million, including $1 million from the NRMA so it could offer the service to its members. Sendle also has partnerships with NAB and Velocity.
Moody says his company has other products Sendle plans to release later this year, along with plans for another capital raise as the business takes its fight up to Australia Post.