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Is a parcel price war about to break out?

By Dan Wilson January 24, 2014 - 4:39 pm

Now that the Royal Mail privatisation is settled, the battle to find supremacy in the parcel arena seems to be hotting up a bit. And the Parcel2go CEO is predicting a price war. January sees a dramatic drop of in the number of parcels being sent, so promotional prices and incentives are on the cards.

Royal Mail lowered some of their parcel prices late last year, but with plenty of choice from various couriers, with £2.60 being their lowest parcel price, there’s lots of scope for undercutting.

Parcel2go point out that their lowest parcel fee is 99p (for a shop to shop service). And Interparcel have just introduced a temporary £1.50 price.

James Greenbury, CEO Parcel2Go.com says: “The parcel sector is evolving more rapidly than ever before and it’s been interesting to watch how different companies are reacting. We’ve long been expecting a price war, and, as we are committed to offering the lowest price, naturally this is something Parcel2Go.com has been a major player in. Don’t be surprised if these initial skirmishes lead to an all-out price war – which would be great news for the consumer!”

The idea of a price war doesn’t really fill me with glee. In the long run, they don’t tend to lead to lower costs for consumers and the disruption they create can be a pain. And price is seldom the only concern when using a courier. Tracking, service and customer support all also count for a great deal to a serious business seller.

  • James
    3 years ago

    We have all seen what a race to the bottom in this market produces – Yodel! An effect that will take them many years to recover from.

    Seriously, the headline from Parcel2go may sound great but do we really think that UPS (one of the most expensive carriers in the UK market) are actually offering their Store to Store service for 99p? No!

    Royal Mail have the capacity, market share and infrastructure to set the true floor price and don’t expect it to reduce come the April price revision.

  • northumbrian
    3 years ago

    dont know what deal ebay struck with connect plus/yodel but their managed returns are great fun , we get about 2 buyers a month using managed returns and its always hassle

  • PayPalUser
    3 years ago

    I see stockshifters has gone bust

    • shopit
      3 years ago

      wonder why Tamebay hasn’t announced their demise ?

  • Mrbill
    3 years ago

    You get what you pay for. We use UPS exclusively. Yes, more expensive that the rest, but much less hassle, more professional, and customers like it.

  • Mark
    3 years ago

    A race to the bottom. Soon everyone will be like the wretched Yodel. The last seven parcels I have had from them (3 deliveries) were thrown over my gate and across my yard. Every parcel had some or all the contents destroyed and therefore had to be returned. It is difficult to know what courier you are going to get, retailers often don’t let you know.

  • 3 years ago

    Interesting article and price wars are good for the consumer the majority of the time, but companies never really win and can be brand damaging.

    As a user of these services, having used both companies/brokers and noticing the recent goings on, Parcel2Go dropped the price for the UPS store-to-store service to £2.99 (+VAT) and advertised this on Google as a price point to attract more customers; this undercut everyone in the market and it seems to have started the ‘price war’ the article above refers to.

    This then must have provoked Interparcel who had just been undercut by Parcel2Go to drop their lowest price to below their £2.99(+VAT) price and the rest is history really.

    Whether it is 99p (+VAT) or £1.50 (+VAT) it is just a lead in price/price that can be used for advertising and I am sure both companies must be making a potential loss on this or UPS will be, which I doubt being the global business they are.

    The other thing is both offers are slightly different for the same service. Both are for the UK only and Parcel2Go is for a parcel up to 1kg and the Interparcel offer is for a parcel up to a 5kgs and contrary to the point made in the article both offers are for a limited time only/introductory period/temporary offer.

    So under 1kg use Parcel2Go and over 1kg use Interparcel. This assumes though the receiver of the parcel/package you are sending has a UPS store/access point near them and are happy to pick up their goods.

    The winner from this is us consumers/users of the services and also UPS who are getting decent promotion at the cost of the re-seller/broker about there less well known store-to-store service.

    Best watch this space for better offers coming soon!

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