March 24, 2013 12:49 pm

CollectPlus to target small sellers

CollectPlus, the parcel delivery service that uses convenience stores for drop-offs and pick-ups, is targeting individual sellers for its next phase of growth.

Neil Ashworth, the new chief executive of the group, said his aim was to push small-time sellers from representing less than 20 per cent of business to at least half. “The lion’s share of the business is with the 160-odd retailers with whom we trade. But the small eBay seller is where the opportunities lie,” he said.

Half-owned by private equity-backed Yodel – the UK’s biggest delivery group by revenues after the Royal Mail – and half by listed payments group PayPoint, CollectPlus built its brand by catering to people who often miss deliveries to their homes.

Instead of being taken to residential addresses, parcels are delivered to selected corner stores or petrol stations, both of which offer longer hours than post offices.

The company this month announced a tie-up with Asda that will allow customers to buy non-food products online and have them delivered to a network of 5,000 pick-up points. The group’s other retail customers include John Lewis.

But Mr Ashworth said the small-seller market was growing at a more rapid pace than big retail volumes. The company will attempt to push that further in the coming year by improving the resilience of its system, which has earned some harsh online reviews from individual sellers.

“The small guys are living and dying on the basis of one customer interaction,” he explained.

The UK parcel market, estimated to be worth about £1.5bn in sales, is forecast to grow by between 10 per cent and 25 per cent a year. But competition is also steep, particularly for delivery services. Rentokil last week said City Link, its parcel delivery business, lost £26m last year in spite of a 17 per cent rise in delivery volumes.

Paypoint’s accounts for the year to March 2012 showed revenues from its 50 per cent share in CollectPlus rising threefold, to £4m, while losses increased from £1.5m to £1.8m.

For individuals sending packages, including returned goods, the Royal Mail is CollectPlus’ main – and formidable – rival.

Mr Ashworth argued his company would win that contest partly through simplicity: rather than being offered a full schedule of rates for differently sized parcels of differing weights, his customers have three choices – small, medium and large.

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