How did logistics and distribution business Pack & Send boost franchisee revenue and embrace change?
Logistics and distribution is all about speed and service as Pack & Send founder Michael Paul knows all too well.
E-commerce has been a focus for the network for years and in FY2018–19 it achieved record sales. The current financial year saw 12 per cent same-store sales growth through July to October.
Because Pack & Send now both sends and receives, Paul explains, there has been a lift in business.
“We handle both outbound and inbound deliveries which has increased substantially our income growth. For example, our network acts as an alternate drop-off delivery point for people that buy goods online and we undertake substantially more import delivery jobs for customers.
“In order to capitalise on the rising growth opportunities in e-commerce, we have become a technology-driven logistics company.”
So how does the business maintain a competitive edge? In part it’s through a massive capital investment (more than $5 million) to support the digital strategy, says Paul. “Digital transformation begins and ends with how we think about and engage with customers – with technology on our side.”
As a result, growth is strong and the business agile and flexible. Providing customer solutions has brought in increased revenue and franchisee profits, he says.
Innovation continues with a software as a service (SaaS) shipping technology called PACK & SEND Live, which enables customers to create consignments, labels, and manifests in bulk from their own premises.
It reportedly seamlessly integrates with a wide range of e-commerce platforms (eBay, Amazon, Magento, Shopify, WooCommerce, etc.).
In addition to improved convenience for customers, the new technology enables franchisees to earn a recurring residual income stream from regular sender e-commerce clients, no matter how big or small.
Capital investment
Paul says investment to capitalise on future trends is crucial. “In looking at trends, you have to predict as best as you can where businesses will spend their money in the future.
“We believe the outsourcing of fulfilment services (storage, pick, pack and delivery) by SMEs will be in very high demand in the future and we are positioning ourselves to be at the forefront of e-commerce fulfilment for SMEs.”
He points out that increasing numbers of online sellers want their stock positioned as close as possible to their customers, in order to provide a quicker delivery or instant collect options. To answer this, the technology at Pack & Send will provide the capability to transfer stock between locations and optimise order processing.
Paul believes the company has a competitive advantage with the extensive service centre network, which is set to grow from 105 to 150 outlets in order to accommodate growing customer demand.
“Our biggest obstacle is perhaps internal – where there can be potential to become complacent – as complacency usually sets in, when everything in a business is going extremely well.
“However, when you believe the future will continue ‘as is’, then you will start to lose your competitive edge, and then lose customers. Complacency shows itself up in phrases like ‘this doesn’t apply to us’, or ‘we don’t have to provide this service’,” he points out.
“We have proven that our model is capable of franchisees operating multiple units with multi-million dollar sales income.”
Why Pack & Send is a good option for franchisees
Franchisee costs have been stripped back because of boosted productivity caused by technology enhancements. That means increased profits for franchisees, says Paul.
“One example of that is our investment in a proprietary point-of-sale (POS) technology system. Our POS technology (known as GMx) has not only improved customer service, but has also automated a lot of operational functions, allowing franchisees in some cases to more than triple sales revenue on their existing labour cost base.
“We are seeing very significant sales increases with franchisees on their existing labour cost base – which we were not able to achieve before. The magnitude of the sales increase would typically require extra labour to help – but with our technology we’ve taken that cost out.”
The tech investment also resulted in new income streams.
“The outlook for the brand is very positive with our transition to a technology-enabled logistics company, which has resulted in more Pack & Send franchise stores opening and an increase in existing franchisees purchasing their second and third stores as multi-unit owners.