Logistics still stand in companies way
San Francisco, CA -- (SBWIRE) -- 03/12/2013 -- South America's appetite for buying goods on the internet is both boosting online retailers and creating a huge growth drive for courier services.
Although the bulk of business is still reliant upon the companies shipping the packages to further companies, there are factors that drive the part of the business that involve the delivery directly to the consumers.
"An increasing number of people are using the Internet and access to credit cards, as well as the growth of the middle class means that a growing sector of the population are ordering online," says SA Express Parcel Association chief executive Garry Marshall
That fact does not mean that providing a service to the online retailer is easy money for anyone. Marshall pointed out that while there are generally a set of arrangements for delivery of goods to other companies (rather than direct), dropping off goods to a persons individual residence can be a tricky situation.
"Address databases are a major issue, as is the availability of the receiver at the time and place of the delivery. If a courier has to attempt a delivery more than once, they lose money on it."
Courier services have not only the basic address logistics to deal with, but also have to be an effective operator when it comes to scaling. "Network is critical. You have to be able to deliver to every single address in the country. There is a huge cost attached to this," he says.
Thus, online retail increases the revenue, but creating positive against via the internet deliveries is difficult for courier companies to attain.
"They are generally low-yielding products, and profitability is a concern," says Marshall.
Some couriers are willing to take on the challenge. Stephen Gliesner, who is managing director of The Courier Guy's stated that though it takes a lot of effort for e-commerce in the area, it can still be highly profitable if done right.
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