Buying a Aust Post Franchise

[TMNT]

So id like to to think I know a thing about small businesses.

Is anybody close to know anyone involved in one?

I used to be good friends at my local Aust Post since I was there almost everyday,

he was a retired or semi retired guy with 3 of them, I think he sold one or two of them to his son for whatever reason,

previous owners had it for 9 years, they bought it for $300k ish and sold it for $800kish,

new guy seemed to be doing well especially when the one nearest by in a shopping centre closed down.

question: assuming there are no micro influences, such as another one going up close by, your shop front getting blocked off or changed for whatever reason


assuming the aust post market is going to remain steady,(ive heard two contradictory stories that aust post is going to decline big time because nobody sends letters any more to aust post is going to boom because of online shopping)

assuming the price you buy it, I believe its on the expensive side of 4 times multiples of earnings,

wouldnt this be a very safe investment, almost likea PAYG job?

one nearby has gone up for sale for about $1m, I believe the net profits are $250k, (not too sure if this includes bank interest, and I think thats assuming you work there full time)

 

[ok180]

Australia Post - The Millionaire Factory?

 

[wylie]

We watched a senate enquiry (or something like that) on the A-Pac channel a few weeks ago which was taking details from three different franchisees of post offices. They were in dire straits, holding down other jobs just to keep their post offices open. All were losing money, but couldn't afford to sell for fear of losing even more so they were working for no income themselves. One lady was selling off her IPs to keep the doors open. I guess selling the business at a loss would mean they would lose their own houses. They seemed to be on a treadmill to nowhere.

One man explained that in his business, the parcels have increased from something like 30 per month to 300 with no extra income brought in, but they needed to pay for extra staff as the parcel side of the business continued to grow.

It was fascinating watching and I was amazed because I thought these business were "gold mines".

Some survive on the "impulse" buying stock in their stores but Aust Post controls what they can sell. Some have more leeway to increase sales via this, but others are highly restricted.

I'm not sure if you can find out how to get hold of this particular show but it made for sobering watching.

 

[Truly Exotic]

A lifetime ago when I had an imports business, my local post office guy who I was quite chatty with, saw all the stuff I was importing,and asked me to get him 20 USB sticks to sell in his stands, which I did, so I guess they have a fair bit of flexibility on what and when they want to sell

 

[wylie]

A lifetime ago when I had an imports business, my local post office guy who I was quite chatty with, saw all the stuff I was importing,and asked me to get him 20 USB sticks to sell in his stands, which I did, so I guess they have a fair bit of flexibility on what and when they want to sell

This A-Pac show said some franchisees have better chance of selling a larger range, and others were very restricted.

Here is the link to A-Pac. I'm not sure how to get to the post office programme but anybody wanting to buy one would be well advised to watch this first.

http://www.a-pac.tv

 

[Truly Exotic]

This A-Pac show said some franchisees have better chance of selling a larger range, and others were very restricted.

Here is the link to A-Pac. I'm not sure how to get to the post office programme but anybody wanting to buy one would be well advised to watch this first.

http://www.a-pac.tv

looks good, I might have a look at it too,

admittedly, something like this nearer to retirement for cashflow might be good,and if you can find a good full time worker, then you'd be set

 

[wylie]

looks good, I might have a look at it too,

admittedly, something like this nearer to retirement for cashflow might be good,and if you can find a good full time worker, then you'd be set

The three people profiled and answering questions of the senators in the room were far from "set". They were in dire financial straits. That is not to say they might not be franchisees who do very well, but clearly there is a big issue with many of them due to Aust Post not increasing their payments for the handling of so many (and ever increasing numbers of) parcels but the franchisees having to pay wages for staff to handle the increases.

 

[Mr. Fabulous]

Is anybody close to know anyone involved in one?

Just go around to every Aust Post you can find, ask to talk to the owner, tell them you are interested in buying a franchise and ask them if they would be happy to answer your questions over lunch (your shout, obviously).

 

[ok180]

The three people profiled and answering questions of the senators in the room were far from "set". They were in dire financial straits. That is not to say they might not be franchisees who do very well, but clearly there is a big issue with many of them due to Aust Post not increasing their payments for the handling of so many (and ever increasing numbers of) parcels but the franchisees having to pay wages for staff to handle the increases.

Also with the increase in parcels, I have noticed the two local post offices close to me now look terrible when I go in. Parcels all over the the place stacked 6 and 7 high.

Australia post is changing a lot, less letters and more bulky parcels. They have big competition now too with the like of Fastway and Couriers please very competitive to send similar items and they come to you to pick up.

 

[jackbak]

The only upside I can see from owning an Aus Post is the monopoly they hold over the mail delivery. Without that they will just become couriers like any other courier company.

IMO their future is very bleak, mail deliveries will soon go from daily to weekly - apparently their major customer for mail is the government because they are technologically so far behind, it won't be long until they start sending everything by email like the rest of us.

So that leaves parcels but unlike the mail, anyone can become a player in this and they will actually have to compete with every other courier to stay in business. In the longer term 3D printers will eventually erode this as well.

Their other revenue maker is bill payments. Surely this is only used by people who don't have access to the internet and will decrease year by year as older people become more confident using the internet, the NBN will only increase our use of the internet. I can't remember the last time I paid a bill at the internet.

What else do they do? Foreign exchange, passport photo's and small gadgets, I can't see any long term future in any of these. Too many competitors and people only buy these things from Aus Post because they are going there anyway.

Why are you considering them, where do you see their future?

 

[jackbak]

Also with the increase in parcels, I have noticed the two local post offices close to me now look terrible when I go in. Parcels all over the the place stacked 6 and 7 high.

That's true, I had 8 boxes delivered to my PO Box last year and they called me in hysterics telling me to come down immediately and get the boxes out of their shop. When I got down there they were stacked up at the front of the counter blocking the queue.

 

[ok180]

Just did a quick exercise.

Parcel being sent from Sydney 2000 to Brisbane 4000

30x30x30 3kg.

Australia Post - $18. Couriers Please - $15.

Couriers please come to me. Australia Post I have to go to them.

You Decide.

 

[Made_Man]

mail deliveries will soon go from daily to weekly -

i remember somebody saying to me that they wanted to change it to weekly and if you wanted to have the delivery daily you would have to pay $xx for the year.

 

[TMNT]

does anybody know how does the comission strucutre for an aust post shop work??

is it a %/set fee of all bills paid regardless of cash/cc/cheque
what about deposits?
and what about parcels,is it based on turnover ie the more parcels people send through your shop, the better the profits?

or is a set fee of $x per month for customers to be able to send packages to through you

 

[Singo]

1. People are not sending letters anymore.
2. Parcels are being sent through other companies
3. Bills are being paid online

I know an outlet which was bought just 18 months ago being sold recently for around 100k (20%) loss.

 

[Bats]

I heard a young person on the local radio the other day, stating she was involved in a survey ringing people to see if they would prefer to pay an annual fee of say $30 to continue receiving daily mail or receiving their mail every second day for no fee. This was for both householders and business.

The beginning of the end of Australia Post mail deliveries as we know it.

i remember somebody saying to me that they wanted to change it to weekly and if you wanted to have the delivery daily you would have to pay $xx for the year.

 

[Peter_Tersteeg]

i remember somebody saying to me that they wanted to change it to weekly and if you wanted to have the delivery daily you would have to pay $xx for the year.

There was an article about this in the The Age a few days ago. Most postal mail these days is bills and that's on the decline as many can be emailed these days.

Post offices however are still needed because a lot of online shopping is picked up directly from the local post office.

 

[Tony3008]

I heard a young person on the local radio the other day, stating she was involved in a survey ringing people to see if they would prefer to pay an annual fee of say $30 to continue receiving daily mail or receiving their mail every second day for no fee. This was for both householders and business.

The beginning of the end of Australia Post mail deliveries as we know it.

That could spark some Coalition infighting - urban Libs v. rural Nats. For many rural places, $30 (12c a day) for a daily delivery would still be a mega loss-maker, whilst in my high-rise our mail lady stands in our post room and does 500 addresses in a hour or so - it would probably be more costly to segregate mail for those who had or hadn't paid the $30 daily delivery charge than just deliver everyone's.

 

[willair]

The only question to ask yourself is what happens "IF" they combine centre-link with "AP" then sell it off to investors highly speculative..

 

[grand dad]

A good many Aust Posts are "used" by migration agents to get their clients PR. As a consequence, applicants don't really care how much they pay as long as its above the threshold required to qualify for a business migrant visa. Once they have gotten the visa, they sell - often very cheaply.