I have heard from several people in the channel that the take up of the Hubbed bill payment agency has been slow and that people in and supporting Hubbed are wondering why this could be the case.
While I have had no discussions with Hubbed, from what I have seen of their documentation I can see two reasons why take up among newsagents would be slow:
- Agency versus retailer. More and more newsagents prefer top be retailers, controlling more of their business, the traffic generators and the gross profit they make. The success of Hubbed depends on Hubbed to generate interest and to provide a time and space efficient platform. Retailers comparing Hubbed to the Australia Post offering will see, as I have seen, that the Australia Post kiosk offering is next generation efficient while the Hubbed technology is out of date.
- Overall financial risk. Given the need to take a lease for computer equipment for the Hubbed premium offering and that the cost of the hardware included in the lease appears to be higher than one could buy equivalent gear on the street and that the finance agreement is separate to the Hubbed agreement, newsagents are naturally wary.
A newsagent turning over $50,000 in cards could invest the amount Hubbed is asking for into a carefully selected new retail product category and turn the (approx.) $2,500 or $6,200 a year into $10,000 or $30,000 in gross profit respectively. This goes to the heart of the retailer versus agent question.
My personal view is that retail newsagents have a brighter future focussing on being retailers than they have focussing on being agents.
No supplier will make us successful. Our success comes from our own decisions and actions as retailers.
I saw this setup in a Newsagency yesterday. It looked out of place. Is anyone having success with it?
I am seriously considering it. There is no Post Office in our area, just an Agency that can do everything EXCEPT bill payments and money orders. Talking to my customers, there will be a big demand for both the bill pay and the parcel service.
Yes, I do want to be a retailer, but I also need to keep in mind I have a very small local market, and the more I can do to, keep them coming through my door the more opportunities I have to sell other merchandise.
The feed back I am getting is encouraging, I just need to crunch the numbers to make sure I can cover the costs and make a decent profit.
Yes.
David,
The Hubbed service only appears to do 1, 3 and 5kg satchels. That’s a pretty limited selection for customers. While I haven’t seen the Aust Post kiosks I suspect they offer a far greater range of options.
In-store bill payment is a dying market. I can’t see this being a viable revenue stream in the medium or long term.
David you can go with Parcel Point or N Parcel for free.
Over the counter bill payment is dead – the traffic there today will only decline. Run the numbers, the real cost of the equipment lease, the floor space and the time.
You should not focus on covering costs. Yu should focus on profit – return on investment of time, capital and floorspace.
When asking your customers if they would use the service and pay you the penalty fee you will charge for the service.
Maybe I am wrong. Maybe Hubbed is making money. Newsagents offering the service today should jump in and comment.
Jarryd and Mark, thanks. You both make valid points, and the longevity of OTC bill pay concerns me, but I service a small semi-rural / urban fringe community who resent having to travel out of their way to pay bills, and don’t seem to have cottoned on to bpay and the interwebby thing. The extra dollar isn’t a factor for them taking in to account the convenience.
As to parcels, yes I am aware of the other services, but Hubbed gives me a bigger return per parcel.
Sure, its only 1, 2 & 3 kg nominal, but they don’t go by weight, but by what fits the satchel, so a kilo of feathers would need to go in the 3 kilo pack and a 3 kilos of gold could go in the 1kg pack.
Still investigating, looking at all the options, as well as the cost over return for the payout period on the hardware.
I’d love to hear from anyone actually using the Hubbed system. I do plan on meeting one or two of their existing SA agents for a chat.