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Mail Order Business - How To Cope With A Postal Strike

Datalite UK Ltd Shares Business Experience During United Kingdoms Autumn 2007 Royal Mail Industrial Action
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John D Henry BA BSc, Managing Director of  DATALITE UK LTD
Find a great range of picture frames and personalised gifts at http://www.dluk.info.
john@dluk.info
All content is Copyright DATALITE UK Ltd 2007
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The United Kingdom garnered rather a bad name in international commerce during the 1970s due to a continuing serious of major strikes.  This culminated in the country working a three day week, a television curfew from 10pm each evening, and a power cut every night from 10:30pm to save the ever diminishing coal stocks due to a minors strike.  The country was literally brought to its knees.

Strong Unions often claim the high moral ground, with an ethos that corporations under a free market will always seek to minimise working conditions and pay for its workers.  They can epitomise a view that without the Union Victorian working conditions will immediately resume, with young boys being sent up chimneys, and workers being paid ‘tuppence’ a day - or even less!  However, this is only part of the story.  A company needs to be successful and efficient to make sufficient profits to pay its workers.  Without the successful company, there will be no jobs or conditions to dispute over.  The United Kingdom saw such a phenomenon with a vociferous strike at a car company called British Leyland.  The industrial action was most complete and had the desired effect of bringing the company to task - the problem was British Leyland went bust as a result.  Not much of a victory for the union, nor the workers on strike, if you manage to kill off the Golden Goose.  The few percent of wages under dispute, pales in to total insignificance compared with a total loss.

The consequent problem was that the United Kingdom’s reputation for industrial action directly effected further investment - particularly pertinent in an ever increasing international market.  This resulted in tougher laws to regulate unions, including mandatory secret ballots, and strict limits to the striking scope.  It is generally recognised that a Company needs to be efficient, to employ and pay its workers.  Ever increasing efficiency is really in the interest of the wider workforce, provided the spoils are fairly shared, of course.  Industrial action nowadays is comparatively rare for United Kingdom companies in the free market private sector.  Though Royal Mail is in fact a private company, it in effect shares much of the traits of an inefficient public sector organisation as it remains wholly owned by the government. 

The taxpayer funded public sector is a different matter.  When a public sector worker considers his position, and those of his friends and colleagues; there is precious little incentive for a government agency to be efficient.  This could result in job cuts, with the realisation that a significant proportion of the people employed do not really achieve much in the way of meaningful work.   An inefficient public sector is self serving; capitalism and profit seeking may be dirty words in some quarters - but certainly provide a strong incentive for the owners of a company to maximise efficiency and hence profit.  In the United Kingdom for the year 2006 official statistics show that over 95 percent of strike action involved government employed personnel.

The United Kingdom’s series of postal strikes in Autumn 2007, had a devastating effect for numerous small business as well as alienating much of its customer base.  Indeed, a private mail company would commit an act of commercial suicide if it emulated the Royal Mail’s disregard for its own paying customers. 

However, for a small business the politics of a devastating strike are irrelevant.  What is pertinent is a survival strategy - and this is where Datalite UK Ltd can share some of its coping strategies and tips.

The first observation is to stress the importance of a business overview.  The old adage ‘don’t have all your eggs in one basket’ is extremely pertinent.  By way of example Datalite UK Ltd has the following business streams:

Personalised Gift Products - Direct sales to customer.
Personalised Gift Products - Mail Order mostly by website http://www.dayborn.com
Personalised Gift Products - Mail Order Catalogue Supplier
Picture Frames - Small Quantities - Mail Order again mainly by website
http://www.framesonlineuk.com
Picture Frames - Medium Supplies -Courier Delivered
Picture Frames - Bulk Supply - Delivered by Pallet

A quick glance shows that roughly half is dependant on Royal Mail.  If a business is solely dependant on Mail Order delivered by one provider - a failure by this provider such as the Autumn Royal Mail series of strike can literally break the company.  Out of the six business streams above, there is only one which could not readily be adapted to a strike by the mail provider; this is the supply of personalised gift products on behalf of mail order catalogues.  The catalogue owner has already formulated the delivery method; however the Royal Mail strike would have highlighted to them the dangers of relying on one provider.  Indeed it is noted that a number of similar companies in the UK have already changed its main mail provider from Royal Mail to a private company.

The second observation is the absolute need to be flexible. The Royal Mail strike resulted in a dramatic reduction in orders from mail order customers - roughly 25 percent of the norm for this time of year.  The immediate objective was to find an alternative carrier.  In fact Datalite discovered that their existing courier Citylink were most helpful and provided a special deal for delivery of smaller items.  This meant Datalite were still able to continue to despatch personalised gift products, albeit at a higher delivery charge for own mail order customers.  One plus was that finding such a solution can put a company at a distinct advantage, as compared to others that fully resign themselves to the effects of industrial action.  However this was offset, by a general reduction in demand for mail order products by the general public due to the affects of the Royal Mail strike action.  As a rough estimate Datalite saw a 75 percent reduction in customer mail orders normally despatched by Royal Mail, directly attributable to the strike.

The third observation and tip, is to keep the customer fully informed.  For Datalite’s internet customers, each despatch E-Mail was accompanied with a latest information on strike E-Mail.  This reassured customers that their products were on there way, and gave latest information on the mail strike. 

The fourth lesson learnt was to negotiate with existing suppliers.  By way of example Datalite UK Ltd’s postage franking machine is supplied by a company called Pitney Bowes.  The postage strike was not their fault, but gave us a fair credit for the reduction in use due to the postage strike.

The fifth tip concerns utilising a variety of ways for customers to order.  Customer’s can bypass Royal Mail altogether, by ordering over the web or via E-Mail.  Many customers still prefer traditional methods such as telephone ordering or even by fax.  Datalite UK Ltd already used all these methods of accepting orders, and this at least reduced the compound effects of mail delays to both receive and despatch orders.

The final lesson is to learn from the experience.  By way of example, if you receive a certain service or supply from one supplier, consider the worst case scenario of  company crisis (a strike is a crisis) or even worst if your supplier ceases trading?   As often cited in the military, ensure a back up plan is in place.  This is particularly pertinent for mail order companies; the strike has illustrated that solely relying on the Royal Mail is bad for business.

Incidentally as this article was written, Datalite’s own costs due to the Royal Mail strike action were significant, loss of sales amounted to thousands of pounds, postage franks were wasted due to unavailability of service, hire costs of postage franking facility ended up a waste of money (partially offset by Pitney Bowes most helpful assistance).  Datalite was able survive thanks to adopting the strategies above.  The company was therefore most surprised to find a card from the Royal Mail, Revenue Protection based in Portsmouth for the amount of four pence (i.e. 0.04 or 8 cents in USA money) for which they have billed the company 84 pence (including an ‘administrative fee’).  Royal Mail have cost the company (and many others) many thousands of pounds, directly due to their strike action (some of which broke United Kingdom laws) and had the cheek to bill for four pence plus an administrative fee. 

It must be said that many individuals within the Royal Mail, including those that physically deliver post and work at Post Offices and Sorting Offices, do a fine job as is Datalite’s overall experience on the Isle of Wight.  However, this applies to many an inefficient organisation - it can be the structure and ethos (i.e government vs private enterprise) not necessarily the individuals at fault.  The Royal Mail sits as a currently unhappy hybrid of government owned and pseudo private enterprise, in apparent desperate need of modernisation

In summary the United Kingdom’s Royal Mail strike had the potential to be devastating to numerous small (and not so small) businesses.  However, Datalite gained useful future business information, and has added courier next day delivery as a further option for customers of smaller items.  The real loser out of these strikes in our considered view is Royal Mail, they have lost much goodwill and indeed custom, much of which will never be retrieved.  What a way to run a business!

Further information on Datalite UK Limited can be found by visiting website
http://www.dluk.info

SUMMARY
The United Kingdom's Royal Mail Postal Strike  disruption in Autumn 2007 couldn't have come at a  worst time for small businesses; during the lead  up to Christmas.  Datalite UK Ltd passes on its  coping strategies for dealing with a major  disruption to a key service to business.

Royal Mail Red Postbox in Empty Street