All it took was a lost book for Julian Leach to launch Parcel Champs, a service for the growing number of Australian consumers who have trouble with missed deliveries at home.
Parcel Champs, launched in September last year, enables customers to send their parcels to a local convenience store and then collect when it suits them.
Leach talks to StartupSmart about creating a new concept in the postal industry.
What inspired the idea for Parcel Champs – what niche did you identify?
The idea came to me when a book I had purchased online was returned to the US because I was too busy to collect it from the post office during working hours that week.
Frustrated by the experience, I started thinking about how often I needed to rearrange my day to get hold of a parcel.
An easier collection option would have saved me a big inconvenience, not to mention the cost and environmental impact of flying my book back and forth across the world.
I figured there must be a better way, given that so many people were around in my neighbourhood when I missed the delivery.
With parcel volumes rising at 11% per annum, I felt this was a great time to solve this large and growing problem for busy online shoppers.
After considering a few options, I decided convenience stores offer an ideal place for parcel drop-off and collection.
Their location and opening hours ensure it’s easy for busy people to collect parcels when it suits them.
Online shopping is generally convenient, efficient and great value. But if you miss the delivery, it can quickly become more trouble than it’s worth.
Parcel Champs is a simple service that makes it easier to receive your delivery.
How long did you work on the business before you launched it?
It took two months from idea to launch.
As you can imagine, this meant there was still a lot to do when the service went live. There was only one delivery and collection location at launch – my office at home.
I’m pleased I took a, “Get it out there, learn as you go” approach though.
The list of ideas for improvement is always endless, but it was better for me to launch when I did because you learn very quickly what works (and what doesn’t) when you’re in business.
Launching was just the beginning – the business has taken some major leaps forward since then.
How did you fund the business and what were your start-up costs?
I have self-funded to date, as I wanted to run a proof-of-concept and get some traction before raising funds.
Actual launch costs were very low (under $500) as I launched early and did most of the work myself, including areas where I didn’t have much prior experience (eg. design, website build).
Investment has increased steadily since launch, reflecting the growth of the business and building new relationships with convenience stores.
The biggest cost continues to be my time, as I left a well-paid corporate job in July last year. I’m confident though that it was the right decision to commit full-time to Parcel Champs.
I am now in discussions with a number of potential investors and business partners, with a view to growing the business significantly this year.
How do you promote the business?
The business started in Sydney’s eastern suburbs, and initial marketing was very localised to the area, using flyers and posters to reach our target customers.
A steadily building Facebook presence has yielded some good results. Online referrals and good old fashioned word-of-mouth are great avenues to new customers.
I am ramping up investment in online marketing, but as you can imagine not many people are currently searching directly for this type of service on Google because they know the problem but the solution is new.
How many staff do you have?
It’s currently just me, fulltime. I’ve had lots of support from some amazing family and friends around me though.
It has been very rewarding building the business by myself, taking responsibility for every aspect.
But I’m also looking forward to being in a position to build a team, having always worked with others previously.
What are your revenue projections for 2011/12?
I am currently running a very localised trial in the Sydney area. The strategy has been to test and refine the model then scale, so revenue results for this financial year will be small, reflecting the current footprint.
With a strong foundation in place, we will be significantly expanding the Parcel Champs network during the coming weeks.
I’m expecting 2012/13 to be an exciting financial year for revenue growth.
What has been your greatest challenge and how did you overcome it?
Countless new ideas crop up every day and it’s easy to get distracted by a list of things that is just too long to tackle.
I think it’s critical for solo entrepreneurs to keep making space to think creatively, and to be ready to (and expect to) make significant adjustments to their course along the journey.
But it’s also important to keep getting things finished, one at a time.
I try to review my priorities regularly so I know I’m working on the most important thing to move forward.
I also put myself under pressure to move on when something is ready to trial, rather than spending lots of time trying to perfect it (a natural tendency).
It usually ends up getting changed or improved later, but often in a way that I couldn’t have anticipated before trying it out.
What are your points of difference?
We have three major points of difference:
Convenience because our customers can collect parcels when and where it suits them.
Having to rearrange your day to meet parcel collection or redelivery times is a major inconvenience for many people.
We also don’t believe consumers want to travel further to access after-hours parcel services.
Parcel Champs enables after-hours collections at an ultra-local level, using a consumer’s existing community or neighbourhood network.
By leveraging convenience stores that are already open after-hours, we can provide this service cost-effectively.
We are not tied to any delivery service or online retailer, which means the service can work for any parcel.
Many other solutions require major investment in new delivery and collection infrastructure.
The Parcel Champs model works because of the benefits to convenience stores operating the service.
What’s the biggest risk you face?
Big players are looking at the same problem but this doesn’t mean that an innovative start-up can’t succeed.
There’s no doubt that this problem needs to be solved but it’s not yet clear which solution(s) will be most prevalent in one, three or five years.
I’m focused on creating a solution with broad consumer and industry benefits, which sets itself apart from costly alternatives.
The other big risk is growing too fast – or too slow.
What advice would you give to other entrepreneurs, particularly in your field?
It’s rarely one-size-fits-all, but a couple of things that have helped me:
Focusing on a narrow problem and solution is a major advantage. If it’s a big problem that people recognise instantly, you have a great starting point.
While lots of adjacent problems will come into play, I have found it helps to park them and stay focused on the simple core problem initially.
- Start small and scale when you’re ready. It has been said many times before, but I’m a great believer in this.
If you have issues with your business model, they will almost always get bigger if you expand before fixing them.
Starting small enables you to launch fast, which has big advantages, and remain very nimble while you hone your business model.