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Amazon Post Office Trial and what’s bad about it

By Chris Dawson March 8, 2021 - 11:32 am

Amazon have signed a deal with the Post Office for a click & collect trial, currently live in 200 Post Offices across 3 cities. The Amazon Post Office trial beats to the punch the one we’re waiting for – surely eBay is talking to the Post Office?

While the Amazon Post Office trial is billed as intended for click & collect by The Grocer, which broke the news, the likelihood is that it’s a lot more interesting as a highly convenient location for returns. Especially at the moment where so many consumers are still working from home and so have no difficulties receiving parcels, however this will change as the country slowly starts to open up.

Whether it’s click & collect or returns, it’s still a highly significant deal as it’s the first time the Post Office have handled services for any carrier other than Royal Mail. If you’re in Newcastle, Preston or Edinburgh then Amazon is at a Post Office near you.

So here’s where it gets interesting, we know that the Post Office has a long term desire to become a multi-carrier parcel hub rather than solely an entry into the Royal Mail network. Having signed a renegotiated 10 year deal with Royal Mail, they now have freedom to negotiate other deals and the Amazon Post Office deal will likely be just the first.

And where it gets even more interesting is that, while we don’t know the terms of the Amazon Post Office deal, we already know it’s not very good – probably for both sides – but it’s crucial for the Post Office as a line in the sand has been drawn and it signifies they are open for business with other carriers.

Why’s the deal not very good? Well 200 Postmasters have apparently been sent a smartphone with the Amazon app installed (not the consumer app, this is the logistics app used by Amazon delivery drivers). They need this to scan parcels which doubtless will trigger a courier to come and collect them.

A smartphone for a Post Office might not sound that big a deal until you think about three key ways the process is working.

  1. Firstly, many Post Offices have multiple service windows and so one smartphone is going to be seriously inconvenient. One might wonder if any passwords will be needed for the smartphone or app and how many staff will need to be able to unlock it? We wish the Past Office good luck with traceability and figuring out which clerk accepted a particular parcel if they all use the same phone.
  2. Next, there are some 11,500 Post Offices in the country and to roll this out nationwide would cost a small fortune in infrastructure. We’re talking multiple millions of pounds to give one smartphone per location for the Amazon Post Office deal to roll out nationwide.
  3. What about Horizon? The Post Office are heavily committed to their in-house software solution and pretty much everything goes through it so why not Amazon? Well probably Amazon insisted on using their own app and to close the Amazon Post Office deal they rolled over and gritted their teeth.
  4. I said three issues… but here’s the fourth – what if next time the Post Office sign a deal, with say eBay, and eBay also insist they use an eBay app – does that mean another smartphone app, who paid for the smartphones – would it be permitted to install both an eBay app and an Amazon app on the same device? And even more importantly, when you wander into the Post Office with a parcel to send or return, think about the decision process for the clerk who has to decide if it’s a Horizon process or one of any number of multiple apps on one or more smartphones that might be sitting on someone else’s counter and for which they’ve forgotten the password or failed to keep the phone charged.

We don’t know what volumes Amazon have committed to (knowing Amazon probably zero), or what the commercial terms will be (knowing Amazon Shipping charges to merchants, probably pennies or fractions of pennies per parcel), but what we can conclude is that this isn’t a great deal.

However it’s a hugely significant deal for the Post Office who, at least in three cities, are no longer exclusively a Royal Mail partner. They’ve signed a high profile carrier deal with a second partner and that opens the doors to more in the future, so expect them to be effusive when they report success of the trial because it doesn’t matter how well or badly it performs or how inconvenient it is for Postmasters. All that matters is that it’s a deal they can shout about.

Final thought, when will the Post Office start selling Amazon Shipping as a consumer carrier service? That would mean taking money for selling a label and there’s no way that can take place on a smartphone – cash in the Post Office has to go through the till and that means Horizon. Are you thinking there are more problems with this deal than upsides with the exception that it’s great PR for the Post Office contracts negotiation team?

  • SAM
    2 months ago

    Post office staff still look at you with a blank expression when you turn up with a pre paid Royal Mail sack and dont know what to do.

  • Toby
    1 month ago

    Well here is the next issue. The post office have spent years closing post offices and moving them into other stores, reducing their size. Now what we have is a compnay trying to bring in more and more parcel business… but where will the space come from? I have had parcels turned away before becasue the person dealing with me said they simply had no more space to store anything!
    Sadly the post office have been as blinkered as royal mail the last 10 years and now it is playing catch up with it’s hands behind its back.
    In our local shop, the post office is also staffed by shop staff… this has already led to many not really knowing what they are doing and having to wait for another member of staff to be free to be able to help. We went from 2 counters to 1 counter and now sometimes no actual post office staff!
    I see this all ending in confusion and customer anger. As for ebay? Of course they are talking to the post office, just not about doing business. They will get round to that in 5 years time when the boat has sailed. Then they will be setting up a system where the post office is punished should a customer fail to take their parcel to them or collect it within a set time frame!

  • Wrex
    1 month ago

    “it’s still a highly significant deal as it’s the first time the Post Office have handled services for any carrier other than Royal Mail”

    Uhhh… I’ve been using the post office for Amazon pick ups for several years now.

    Change your site name to lamebay.com

  • Lorna Cammock
    1 month ago

    Amazon is so unethical. Look through Google. Tax dodging and lots more. …..

  • 1 month ago

    Did anyone else spot the Freudian slip…
    “We wish the Past Office good luck with traceability and figuring out which clerk accepted a particular parcel if they all use the same phone.”

  • NorthCrystal
    1 month ago

    Perhaps the deal is bad for both sides… The thing is Amazon can burn so much cash that they could probably afford to acquire the PostOffice together with RM along.

  • Terry
    1 month ago

    The laugh of all this is that Post Offices are closing at such a rate that this is all going to become rather academic if the current trajectory continues !

  • Mac
    1 month ago

    Never known amazon to be unethical.
    And they apparently pay the exact taxes required, just like the rest of us.

    However post offices – should be an interesting move forwards. Is a bad deal better than no deal? The same building, the same staff, the same utilities – so any deal for more business is potentially more profit. So long as the extra business can be catered to.

    Now if there isn’t sufficient space at the post office to store intake of mail, perhaps that needs looking at. More frequent collections, shifting stuff around to store more, even moving the counter forward to make more space back of the counter.
    Don’t know about anyone else but my local post office has a storeroom for stock. Can add dozens of bags in there – what can’t happen is the small post van sent out to the village post offices in our area getting full at 5.15pm – and no additional van will be sent (be 6.30 before could get an empty van there).
    Too much by way of parcels and royal mail would have to send bigger vans or more vans.
    So could see a knock on effect in costs.

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