licence set-up costs
make an investment in your own future
The initial fee of £27,900 +VAT gives you exclusive rights to operate an expost Mail Centre within the reserved, protected, territory of the North of England for a term of five years. It covers the cost of training, IT hardware, specialist equipment, sales & marketing, all consumables for the first 12 months, access to our bespoke software, ongoing support and system development.
We know, from the frequency of telephone and email enquiries, that virtual addresses in Manchester are in particularly high demand. Part of this is undoubtably due to the region being so heavily populated, with a high proportion of businesses, Manchester having largely taken over from Birmingham as the UK's second commercial city.
licence renewal fees
There are none! All you will need to pay for a further five year term is a £2,000 + VAT contribution toward the legal costs involved in drawing up your new contract. Renewal of the Licence will also renew your geographical exclusivity for the same period.
bringing opportunity within reach!
We are not in the business of selling Licences. Because we will only ever have eight Mail Centres across the UK, we need to find exactly the right person, in the right place, with the skills and character necessary to run this prime Territory. We don't want to lose that person just because they don't have access to the necessary investment, which is why we offer Capital Assistance.
how capital assistance works
You only pay half of the total set-up costs ( £13,900 +VAT ) and we carry the balance. . . which only becomes payable if and when you decide that it makes economic sense for your business. We are able to finance the programme by simply increasing our Royalty rate from 30% to 40% whilst you operate under the Capital Assistance scheme, but the moment you decide to settle the balance, these Royalties immediately revert to the lower rate.
This is NOT a credit agreement. The outstanding balance is not a debt, it never becomes 'due', and we don't charge interest on it. In fact, you don't ever need to pay the balance at all. . . you could decide to continue trading under Capital Assistance for the whole of your 5 year Licence term!
on-going & sales related costs
Our income is limited to the Royalties on account sales and mail handling, we only profit from your financial success!
Even though all sales, marketing, advertising, customer support and administration is handled exclusively by our team at Philbeach on your behalf, we only retain 30% of gross revenues as a Royalty ( 40% whilst under Capital Assistance ), with the balance credited to your account at the end of each month.
third party sales commission
We have a direct sales campaign in operation, the 'Ambassador Program', better described in sales & support. The agreed commission rate per sale is capped at £50.00, only applies to 12 month accounts, and is deducted from the account fee before our royalties are calculated. No third party commissions are payable on subsequent account renewals or operational revenues.
If you intend to operate the Manchester Mail Centre yourself, from home, then you should have no additional workspace or staff related outgoings whatsoever. The business is effectively overhead free, aside from broadband internet and some form of commercial insurance ( this may be required by law if you are trading as a Limited Company ). For your guidance, a minimum of £10,000 all risks cover is suggested for computer hardware, mailsort furniture and consumables held in stock.
Mail held at your Centre is only insured at the rate of £1 per letter, £2 per large letter and £10 a parcel, with the limit on any single claim of £100 in aggregate, and so we have found that the most cost effective option was to self-insure mail-in-hand. Your Mail Centre management reports include a real-time update on the current insurance exposure.
The largest operational cost is, by far, the postage and courier charges incurred when forwarding your customers' mail.
But you don't pay them! Whether you are forwarding a single letter to Swindon via the Royal Mail, or despatching two 20Kg parcels to South Africa by DHL or UPS, the postal and shipping costs are all covered by our national credit accounts!
( call our development team for more information on 0333 789 0011 )
earnings & income
sales, renewals, handling & scanning
Please note that the sales figures used in the following projections are drawn directly from the actual performance of your closest active Licence, in Telford, which serves a very similar demographic. . . although we confidently expect the Manchester Mail Centre to exceed this performance, possibly by as much as 20%.
The income from the sale of new accounts, and their subsequent renewals, constitutes your primary revenue stream. To help put these projections into perspective; even in year three, they still represent less than one account sale per day.
3 month account: £100
6 month account: £180
12 month account: £240
Average sales value: £216
Net of Royalties: £138
(Net of Capital Assistance Royalties: £112)
New account sales are augmented by renewals in subsequent years. The current retention rate for accounts across our UK network of Mail Centres is almost 80% and there is no evidence to suggest that this figure would be any lower in Manchester.
As your Mail Centre accumulates customer accounts, the income arising from mail handling fees, scanning and surcharges ( 'Operational Revenues' ) grows proportionately, because the longer a customer holds an account with you, the more mail they will process through the Centre each month.
Letter handling: £0.60
Large Letter handling: £1.00
Parcel handling: £3.00
Although the Operational Revenue in our Head Office Mail Centre now exceeds that generated by Account Sales, for the purposes of the projections it has been assumed that the mean Operational Revenue per active Account will equate to just 45% of the Sales value in year one, rising to 85% in subsequent years, as your customers' account usage matures.
36 month projections - expost north
Year 1 total account sales: 100
Year 2 total account sales: 140
Year 3 total account sales: 180
Active accounts, year 3: 365
TOTAL SET-UP COST: £27,900 (+ VAT)
Year 1 Projected revenue: £20,050 ( net of Royalties )
Year 2 Projected revenue: £48,500 ( net of Royalties )
Year 3 Projected revenue: £81,100 ( net of Royalties )
or, under capital assistance
TOTAL SET-UP COST: £13,900 (+ VAT)
Year 1 Projected revenue: £16,300 ( net of Royalties )
Year 2 Projected revenue: £39,500 ( net of Royalties )
Year 3 Projected revenue: £65,900 ( net of Royalties )
billing & reconciliation
ProPost incorporates a comprehensive accounting module that keeps track of every letter and parcel you handle, every scan, customer credit, royalty payment, transaction fee, surcharge and VAT; then uses this data to present you with a real-time, fully reconciled, statement of account. At the end of each calendar month, the net revenue due is transferred from expost's client account, directly into your real-world bank.