Two up: How Sendle is challenging Australia Post

Move over, Australia Post. Parcel-delivery startup Sendle is planning to disrupt the logistics market. Co-founders James Chin Moody and Craig Davis explain how.

What is Sendle?

With more than two million small and medium businesses in Australia as a potential customer base, Sydney-based Sendle offers a door-to-door delivery service at a cheaper price point than Australia Post, using technology to exploit spare capacity on existing courier networks — and, in the process, steal market share from the former retail delivery monopoly.

“Sending a parcel should not cost the earth,” says chief marketing officer Craig Davis. “We can be cheaper by between 20 and 40 per cent — and still offset carbon.”

Why was it set up?

In 2012, CEO James Chin Moody started a giving network, TuShare, diverting useful items from landfill to rehome them with people who could use them. It had certain logistics requirements — it needed to be door-to-door, able to ship one item at a time and affordable.

“Australia Post was only one of those things,” says Moody. “You had to line up and it was expensive. We solved it, with what has now become Sendle, by realising that there is an infrastructure network that we can tap into with technology.”

The team at Sendle discovered there was a demand for a more affordable logistics service than traditional post — and there was only one entity servicing that market. “We started thinking that maybe our business was making this delivery service available to everybody,” says Moody. “We said: ‘Let’s create a service that is 100 per cent focused on the needs of small business, particularly small business ecommerce.’”

How is it gaining market share?

Sendle uses traditional marketing methods to reach new consumers, but its customer service and ability to convert people who come into contact with the business into potential clients is where the real opportunities lie.

“We’ve grown the business through partnerships that bring credibility,” says Davis. “They introduce us to their database, which is exposure we simply couldn’t afford.”

“Viral loops” also play a role. When someone receives a parcel via Sendle, it creates the chance to turn that person into a referrer. Much of the business growth comes from these first contacts with consumers. Moody claims that Sendle’s delivery service generates word-of-mouth recommendations.

When a shopper cancels an online purchase before they complete the transaction, it’s usually due to shipping costs. Sendle sees this potential and is working to embed the company as a delivery option within existing ecommerce platforms such as eBay, Shopify and Xero. Partner sites will allow shoppers to print off a Sendle shipping voucher at checkout.

What about Amazon…?

Sendle views the coming of Amazon to Australia as an opportunity. “In the short term, I think its arrival will be positive,” says Moody. “It will further accelerate the number of people buying online. And they won’t just be shopping on Amazon. After that, it’s about staying competitive. Why only sell to Australia? Why only sell to 24 million people? Why not sell to seven billion people? The answer is simple: logistics.” Sendle’s recent announcement of a partnership with DHL was the first phase of a global operation that now ships to 220 countries worldwide. “It’s about being smart about using technology, because it’s our biggest competitive advantage.”

The potential for Australian business is revisiting how fulfilment and shipping are traditionally viewed. Delivery has been seen as an unavoidable cost base, an invisible and unchangeable component in the fulfilment chain, but Amazon has turned delivery to a competitive advantage.