Tracey Barnes runs a small candle and homewares business, FrothnFlames Candles and Soap, and she has a bit of a problem. When she goes for a courier comparison, her profit margin shrinks.
As the lead up to Christmas in the AU looms, parcel delivery fees are increasing, and Barnes’ business is one of the many victims as these rates go up beyond the consumer price index, which is leading to the small businesses dependent on parcel delivery services to start hurting.
As a result, many several smaller online retailers are speaking out right before of the Aussie Christmas retail rush, claiming consumer expectations paired with recent parcel delivery price increases that Australia Post implemented has lead to them having a lot of issue competing with the larger retailers.
In contrast, larger retailers like Amazon Australia offer free shipping on orders more than $50 in value, or two-day delivery from around $10, while Australia Post charges $11.30 for the sending of a single express post parcel.
The service recently announced its annual increase in parcel delivery costs at early in October, on top of changes to their “Send and Save” discounts for their business customers in November. These changes meant that business customers got bigger discounts for sending parcels to the same metro area, up by 35% for sending mail in large volumes.
However, many smaller businesses have pointed out that the policy didn’t include and discounts for sending orders across regional areas in Australia, which they say are what the increased cost pressures stem from.
In response, Australia Post says that the business discounts for regional orders are still there, saying that customers pricing changes will be offset largely by the savings that they get from sending their parcels between metro areas and major regional centres. They add that MyPost Business customers who send predominantly to regional areas can still get savings up to 12.5% through buying bulk pre-paid satchels, according to a spokesperson for Australia Post.
On the other end, small startup like courier service Sendle are seeing the difficulty that small businesses were facing as an opportunity with flat rate global shipping offers, which they can see with a courier comparison, allowing small businesses the opportunity to try and compete with larger retailers.
Try being the operative term, as some are pointing out that the system is reliant on picking up deliveries, which doesn’t always go well. On top of all that, small business owners say that they just compete with the larger retailers who absorb postage and can offer free shipping.