Courier Franchise UK – the TOP 10 MUST KNOWS about finding and running successful UK Courier Franchises.
They may not offer the best margins out there, but UK Courier Franchises do open up some interesting opportunities for those who are willing to carve out their own spaces.
We live in a hyperconnected world. With billions of smart devices floating around and the internet access deeper, wider than ever, it’s safe to say that communication is at its absolute peak.
Apart from the obvious changes the technology has made to interpersonal relationships, the internet has had a definitive impact on the way businesses run. The retail industry, for one, has been revolutionised beyond recognition.
More and more people now prefer to shop online for everything from computers and accessories to clothes and even groceries. The courier and delivery sector in the UK has grown exponentially larger as a by-product of these e-commerce trends. People may not be writing letters anymore – but they sure are making up for this by ordering tons of stuff online.
In this article, we will be taking a look and how UK courier franchises have been integral to this trend. We will also try to understand what the growth potential for delivery and Courier Franchises UK is in the context of the peculiar last-mile problem that routinely troubles the e-commerce businesses today.
Courier Franchise UK – Know Your Numbers
UK Courier Franchises have performed steadily over the last 10 years, thanks to the fundamental nature of the services they provide. Before we dig deeper into what keeps propping delivery and courier franchises UK up, it’s important to understand the vital numbers for this industry.
- The delivery, courier and postal industry in the UK has been a constant market fixture for centuries. Evolving from the systemic, far-reaching global trading outfit of the Victorian era, the present-day courier industry in the UK boasts of revenue in excess of £21 bn.
- Over 20,000 distinct business entities operate in the UK courier industry. A large number of these are estimated to be franchise units.
- The industry employs over 250,000 full-time workforce, making it one of the largest sectors in the UK in terms of employment generated.
- The market share is typically divided between a handful of major players (Royal Mail, being the largest) and scattered, regional operations. As far as courier franchises UK go, the market presence is limited to covering local, final stages of delivery.
- From 2014 through to 2019, the courier and postal industry in the UK has grown at about 7% per year. This rate is at par with the growth of the overall economy.
These statistical insights should be adequate to convey the fact that the courier industry has more to gain from perfecting their services rather than disrupting them altogether. It’s tempting to think about all the futuristic promises of drone deliveries and AI-fuelled algorithms, while also remembering that that’s clearly something more suited to big players with deeper pockets.
Courier Franchise UK – Making The Most Of Others’ Pain Points
In the introduction of this article, we pointed out that the growth of UK courier franchises – and the courier/postal industry in general – has a lot to do with the meteoric growth rates experienced by e-commerce businesses.
The life, however, isn’t easy for an e-commerce business. The pain points are many and the heavy emphasis on the personalisation of every aspect makes things worse.
Take the actual delivery of a product, for example.
When you order a product from an e-commerce website, you typically get to choose when it’ll be delivered to you. About 20 years ago, this would have been utterly impossible.
This one little luxury means that e-commerce businesses have to invest heavily in the way their inventory moves – giving a well-primed scene for courier companies to enter and take over.
The last mile problem is very much real and isn’t going anywhere any time soon. As long these market conditions persist, parcel and courier franchises UK can be confident of enjoying the same growth rates for the foreseeable future.
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What Do Parcel and Courier Franchises UK Do?
Parcel and courier franchises UK are much like any other franchise operation – they aim to offer local, territorial support to the franchisor.
The costs of moving goods from one place to another are huge – unless you operate at a scale that justifies the investments. Combine this with the razor-thin margins of the business and you won’t have much trouble understanding why smaller courier businesses fail to expand beyond a certain point – the bottlenecks are just too expensive to crack open.
Many such businesses that reach the point of saturation resort to adopting the franchising business model.
A courier franchisee typically handles one or more aspects for the franchisor business at the local level.
Types of Courier Franchise UK
Broadly speaking, there are two major types of parcel and courier franchises UK.
Distribution Centres/Holding Centres/Depots
Distribution centres (also known as depots or holding centres) are ‘nerve centres’ of activity in a given territory. A depot franchise typically looks over all the incoming and outgoing parcels, mails and deliveries for the territory and coordinates with other depots as well as smaller units to run an efficient network.
Running a depot courier franchise typically involves larger investments, stronger workforce, and is best suited to experienced franchisors who have some prior experience in the industry.
Local couriers are often the last cog in the logistics chain for franchisors. From the franchising point of view, these also happen to be the best bets in terms of availability.
A local courier franchise takes over the given (smaller) territory to complete the delivery for multiple courier businesses.
Perhaps, an example would better illustrate this point.
A FedEx package originating from London exchanges many hands before it reaches its destination in, let’s say, a Midlands village. The courier franchise takes advantage of the franchisor’s agreement with FedEx, securing a guaranteed business scale in their territory. Of course, multinational logistics and courier giants like FedEx have many such partnerships – so, it’s important to choose a franchisor that brings in some sort of unique selling point that your unit can rely upon.
How Much Do Parcel and UK Courier Franchises Cost?
As far as investments go, courier franchises UK are at par with most other franchise sectors. To read more about other UK franchise sector, do bookmark our blog.
On average, a Courier Franchise UK will cost you anywhere between £15,000 and £40,000. The minimum initial investment for courier franchises UK comprises of two major costs:
- Initial franchise fees: This is a one-time fee that franchisees need to pay to buy a franchise unit from the franchisor. It reflects the business structure, brand value, operational expertise and market share of the franchisor.
- Infrastructure costs: Most franchisors expect you to put up a certain percentage of the minimum initial investment towards building a workable infrastructural setup. This involves leasing a warehouse/office location, acquiring vans, buying computers, putting in place adequate IT solutions and training.
The operational expenses for courier franchises UK include:
- Rent (this is a major component of ongoing, operational expenses if you’re renting a commercial warehouse)
- Staff salaries
- Marketing expenses
- Franchisor commissions
- IT expenses
- Utilities like electricity and internet
- Vehicle maintenance and fuel costs
How Do UK Courier Franchises Make Money?
The business model for UK courier and parcel franchises is straightforward.
Since you’ll be working as the local unit for the franchisor, the incomings will almost always be directly attributed to them. In most cases, the franchisees earn commissions based on the volume of parcels/deliveries handled each week in various categories. Larger, heavier parcels and packages often yield better revenues for businesses, pushing more and more UK courier franchises towards a B2B model.
A typical, well-run UK courier franchise can hope to break even within 20-24 months of trading. To account for this period, you need to make sure that you have enough working capital and cash reserves.
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How To Market Parcel A Courier Franchise UK?
As is the case with most businesses today, everything eventually boils down to how effective and efficient your marketing plans are.
“Running a well-oiled courier franchise means constantly re-investing in marketing. The sector is fiercely competitive to say the least, and your clients will never think twice before switching to your competitor who offers cheaper services – even by a single penny.”
Since we are referring to smaller, localised courier and parcel franchises UK, it’s safe to focus on affordable but effective marketing.
This usually involves a three-pronged approach:
The best way to secure a good deal of business and improve your visibility is to strike ‘deals of scale’ with local businesses. Almost every business out there has some need for courier partners. If you can find local e-commerce businesses, that’s even better. In other words, use networking as an essential marketing tool.
If B2C deliveries is your target market, it pays to advertise heavily at the local level. Offering on-call pickups, free quotes and express services are just some ways for courier businesses to win over customers.
Digital marketing is an important marketing arm for modern businesses. By working with experienced digital marketers, you can tap additional lead generation channels like social media, organic searches and PPC/PPE ads.
Parcel Courier Franchises – Are You The Right Fit?
Not knowing whether you’re fit to run a business or not is probably the most common reason for franchise businesses to fail.
So, before you invest your hard earned money in a courier franchise, here’s what you need to know:
- Courier franchises do not give you the flexibility you typically expect from your own business.
- As a courier franchisee, you’ll be expected to be open well before and beyond the regular working hours.
- Larger businesses have pretty much every aspect of the business automated and streamlined – you’ll need to work extremely hard to align your services with theirs if you are to win their business.
- Things will often be tough. If you don’t have what it takes to make good business decisions, don’t shy away from hiring someone who does.
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Top Courier Franchise UK
Here are our picks of some of the most popular UK parcel and courier franchises.
- Minimum Initial Investment: £24,999 (plus VAT)
- USP: Affordable logistics and courier solutions for SMEs
- World class carriers
- 350+ franchise units in 14 countries
- Full training
- Complete tech solutions
- Ongoing support
- Scalable marketing
- Full BFA Member
- Minimum Initial Investment: £25,000 (plus VAT)
- USP: Order fulfilment and packing services for businesses
- Innovative business model
- Full training
- Ongoing support
- Minimum Initial Investment: £8,000 (plus VAT)
- USP: Leaflet distribution and mailing partner for businesses
- Combines marketing with postal services
- 30+ years in business
- Full training and support
- Home-based opportunity
- Minimum Initial Investment: £38,500 (plus VAT)
- USP: Leading same day courier and freight business
- Over 2,500 vans on the road
- 30+ franchise units in operation
- Full training on offer
- Business support
- Full BFA Member
- Minimum Initial Investment: £32,500 (plus VAT)
- USP: B2B parcel delivery business
- Large network of clients
- Little to no overheads
- Home-based courier franchise
- Funding support available
- Full BFA Member
Parcel And Courier Franchise UK – The Takeaways
- Understand the competitive nature of the industry.
- Talk to franchisees that are already in operation.
- Know your numbers well.
- Be prepared to withstand the period before you start booking profits.
- Focus on franchisor businesses that offer locally favourable solutions.
- Try to carve out a niche – competing with big players as a franchise unit will take you nowhere.
If you have a first-hand experience of running a courier franchise, do let us know. We’ll make every effort to feature your submissions on our website.