There has been quite a bit in the news recently about Royal Mail and Amazon. Specifically, the complaint that by setting up its own parcel
delivery service and so removing (some) of its custom from Royal Mail, Amazon
is cherry picking the lucrative part of Royal Mail’s service, leaving Royal
Mail with the much-less-lucrative rural delivery market.
I have been wrapping and sending off Christmas gifts and
cards over the past few days. Last week, I took two parcels (one national and
one international) and one card (international) to the Post Office. The total
price for sending these three items was in excess of £40! I was astonished—the
cost of delivery was almost more than the cost of the gifts themselves. My 2kg
parcel to Southern Ireland cost over £26 (via so-called globaleconomy!!); my (almost) 3kg parcel to
Scotland cost over £12; and my letter-sized card to Italy cost 90 pence. And
the lady behind the counter assured me that this was via the cheapest services
available. She was right—I checked online when I got home.
I am sure that Royal Mail would provide me with many reasons
for the enormous cost of delivering my items. But the bottom line is that it is
just too expensive for the consumer. I won’t be using Royal Mail to send my
Christmas gifts next year because I can’t afford it! I will have to explore
alternative options. And, yes, this may well include getting my gifts sent
direct to my family by Amazon using, I assume, Amazon’s own parcel delivery
service.
I don’t know anything about the ins and outs of parcel
delivery and the associated cost to the delivery company. However, based on my
personal experience, I can understand why Amazon has chosen to set up its own
company rather than using Royal Mail. In the end, if there’s a much cheaper and
equally reliable alternative, any sane person would take the cheaper option.
And as for competition and cherry picking parts of the market...well, that’s
how capitalism works. If someone can provide an equivalent service cheaper,
then they are likely to gain custom. Similarly, if you are a privatised
company, you can’t just expect to rely on people’s goodwill if you don’t
provide them with value for money.
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