I did a facebook post on this earlier today but realised that I had so much to say that it really warranted a blog post! Today (with no prior warning), Australia Post put up their shipping charges by an average of 30%. It is a short-sighted attempt to cash in on online shopping but actually just puts another nail in the coffin of Australian small business. Small business is Australia's largest employer with approximately 2.7 million small businesses in Australia employing over 5 million people. That's around 2/3rd's of the labour force. This price gouge will be a direct hit on many of them. You will very rarely find me whinging about running Queen B. I love it passionately. I consider it a privilege to do what I love 80 hours a week. I still have to pinch myself that I get to ship our 'light' every day and at the same time to make a difference in so many lives. Yes, the Australian dollar is high... we'll deal with it. I understand that it is complicated and our dollar was floated several decades ago. Our product is world class. I still think we can compete. Yes, people can buy stuff overseas and not pay GST on orders under $1,000... I understand that it would be expensive to administer. We'll deal with that too. Yes, our manufacturing labour costs are the most expensive in the OECD (all interesting reading but in particular read page 19 and on)... I understand our cost of living is ridiculously high in Australia. We can even struggle through that (although we are understaffed because we can't afford to hire the staff we need). But the rort that is Australia Post's shipping charges is incomprehensible to me. It is just plain stupid and I am gob-smacked that a small beeswax candlemaker in Brookvale has more economic ability and common sense than the entire senior management team of Australia Post combined and our Federal Government.
As I mentioned in my Facebook post, I have a friend who runs an online business in the UK selling natural skincare and cosmetics (including many well known Australian brands). A few Christmas' ago we shipped a 2kg hamper to the UK on behalf of a client and it cost us over $90 to send. I was so shocked that I asked my friend what it would have cost him to send. Turn out that what cost us $90 to ship from Sydney to UK would have cost him £4.62 (less than AUD$6.00) to ship from the UK to Sydney. I thought he was exaggerating, so I asked for a copy of his contract with Royal Mail. Turns out it was true. In fact, it is cheaper for him to send a parcel from London to Manly Beach (16,700 km's) than it is for us to send a parcel from Brookvale to Manly Beach (less than 5kms).
Which goes a long way to explaining why so many international businesses are able to offer free or extremely cheap shipping to Australia (and why Australian businesses can't do the same... and even struggle to ship cheaply within Australia). We recently shipped a $140 parcel to WA and paid $26 in postage alone... which does leave a lot of room for the cost to hand make, pure Australian beeswax candles, package them ethically, use only Australian made boxes, sealed with water activated gum paper tape (it's non-toxic) and the labour to process the order, create the invoice, pick the goods, pack the goodies, handwrite a lovely note and pay for a 250 square metre building, electricity, wages, website and the like. Yes, we are rorted on domestic shipping charges too.
The saddest part about it is that so many Australian companies are setting up their dispatch operations overseas. Yes, Australian website, but all goods are shipped from overseas. So Australia Post get only a very small % of the delivery fee charged by the international operator rather than 100% of the fee if that business had been able to base themselves locally.
And what really gets me is that rorting small business on shipping charges is a job killer. Looking at our Google Analytics, we get as many hits from the UK and USA as we do in Australia, but we ship .0001% of the parcels to those destinations. If we were able to get shipping rates comparative to what businesses of our size in those countries can get, we would need to employ a minimum of 2 additional people to handle those orders and the Government would have their hand in my pocket for company tax and in the pockets of those employees for income tax. I am sure that the tax they would reap would more than compensate for any losses suffered by Australia Post. And, yes, it is the Federal Government who own Australia Post and who could fix this immediately.
Now, just before you think this is one big whinge and that I've done nothing to try to fix it myself, think again. I have raised this on 4 occasions with our "Relationship Manager" at Australia Post (and provided copies of my friend's contract with Royal Mail so that they have hard, factual information). Nothing has been done. I raised it almost 2 years ago with the NSW Small Business Commissioner and again provided factual proof of the rates being offered by national carriers overseas and again nothing has been done (in fact Australia Post have had 3 massive price increases since then). I've raised it with the Federal Small Business Minister (Brendan O'Connor at the time). As you can see his response (which took 6 weeks to send) doesn't actually address the problem or provide a solution. 20120814 Letter from Small Business Minister. My email back to him along those lines was not answered.
So, what can you do?
Firstly, there is now a petition you can sign. It says it is being sent to Australia Post. I sincerely hope that it is also sent to the Federal Small Business Minister and the Chamber of Commerce.
You could also write to the Minister for Small Business asking him to intervene personally in this decision made by a wholly owned Federal Government Enterprise that is killing the ability of Australian small business to compete internationally.
While you're at it, why not write to Julia Gillard? She claims to be the people's Prime Minister, championing small business as "the engine room of the economy". Why then does she bend over backwards for big business and the mining sector and allow a government Business Enterprise to kill Australian small business.
Please feel free to share our facebook post. This is something that affects EVERY Australian. Whether you're in mining, banking, fundraising, lawyering, small business, being a parent or any of the myriad of jobs we have, if we keep allowing money to flow out of the Australian economy (which is what happens when you order stuff from overseas) and we don't have corresponding inflows (because our shipping charges are a joke... witness our current account deficit) then businesses fail which means less employment which means less money in the economy and that affects everyone.
This has to stop. Not only must this decision be reversed, but Australian small businesses need to be offered globally competitive domestic and international shipping rates. Fine, they may not want to offer those rates to everyone, but any small business shipping a reasonable number of parcels needs to be given rates that will allow them to compete.
Thank you for your time. I implore you to please take action. Whilst you may not think that this impacts on you, it does. Regardless of what your job is, your future prosperity depends on a vibrant Australian economy and that means a vibrant, internationally competitive small business sector.