Random Thoughts: Delivering in Korea Part 1

If you order a box of chocolates at 7am from Flower Gift Korea today in Seoul, it is possible for that box of chocolates to get all the way to Busan the very next day. Google shows me that it is 325 kilometers from Seoul to Busan, which is quite a distance. Actually, that same box of chocolates can travel from one end of Korea to the other end of Korea by the very next day if you send out your order before 1pm. And it will roughly make it 99 out of 100 times within one day, as long as there aren’t holidays or Sundays included.

What’s so amazing about that? Other countries can ship packages 325 kilometers away the very next day as well. Well, they probably can, but how much does it cost?

Well, let’s just use the US as an example. From New York to Philadelphia, it is 156 kilometers, which is less than half the distance from Seoul to Busan. How much would it cost to ship something that is 2 pounds?

Let’s use FedEx as an example:

From New York zip code 10001 to Philadelphia I am given three rates:

Overnight by 8:00am delivery – $62.76

Overnight by 10:30am delivery – $30.44

Overnight by 3:00pm delivery – $28.51

From Seoul to Busan:

Overnight – less than 6,000won.

Of course the problem with Korea deliveries is that they do not guarantee the exact time but Korea offers these low delivery prices.¬†I still do not understand how these companies make enough money to stay in business because businesses with contracts with these delivery companies can pay less than 6000won per delivery regardless of size or weight! Yup! That’s right and I’ll tell you more about it later.

The above costs are open to the public. You will pay more or less that much if you send your package through a convenience store in Korea (or the post office) to almost anywhere in Korea. Yeah, convenience stores in Korea sell almost everything, it’s unbelievable and there are actually people who believe that there needs to be some regulations set on convenience stores so that other small businesses in Korea do not suffer, but that’s another story.

Well, do you want to know how much I pay for my deliveries at my flower business? I bet you do.

Well, before I tell you the rates that I get, which will blow your mind, I can tell you that I charge a flat $5 / 5,000won delivery fee for non-flower orders. We charge more for flower deliveries as they require more care, can’t travel in a box, and the price increases as the delivery location gets further away from Seoul, but we are able to match a time range. However, we don’t send flowers and other fragile items in boxes because we would run the risk of delivering a bad quality product. And I have purposely made my target market small so we could get have control of our flower deliveries which has helped us get a lot of good reviews for Flower Gift Korea. ¬†Anyways, so just that we are totally clear, we are only talking about deliveries that are sent in boxes. So yeah, say you order a snack gift box for your friend that lives all the way in Busan. You order a nice wrapped gift box with some snacks today before 1pm and it will arrive in Busan tomorrow. You will end up paying $5 or 5,000won for delivery at Flower Gift Korea. Before we were able to get a contract with a delivery company, we were paying anywhere from 4,000won – 6,000won per delivery that was around 1-2 kilograms because we were sending the deliveries through a convenience store. The delivery price at a convenience store was actually lower than sending it with a post office, which is pretty amazing if you ask me.

So if you think about it, we sometimes paid a little extra for the deliveries, which didn’t make me happy. We still had to make sure the delivery was made safely and do all of the customer service work. I originally wanted to charge more for delivery, but my wife told me that all businesses in Korea charge around 5000won or less for delivery, so I was like, okay, fine. So we used convenience stores to send our packages from April 2016 – February 2017, which is 10 months. But when February hit, which is usually our best month, we had a lot of packages to be sent around Korea for Valentine’s Day. So one day, my wife and I were just preparing some orders when some middle aged gentleman, wearing a delivery guy uniform came in and asked us if we were the ones sending all of the packages. Actually, the convenience stores we were using were kindly complaining because we were sending too many packages and we were taking up space in their convenience stores. We actually had to use two different convenience stores at times because we had a lot of orders and felt sorry for the convenience store owners. You see, convenience stores in Korea usually have like around 5-7 packages sent out a day, well more or less. But we sometimes sent way more than that, so we had to use two different convenience stores. So back to the story about the delivery guy coming in.

The delivery guy came in and he was like, why don’t we make a contract with him. He said it would be better for all of us. What I found out was that the convenience stores I our area had contracts with the same delivery company that picked up all of the orders in our area. So the delivery guy had been going to two different convenience stores to pick up our orders anyway. He said we could pay less than what we were paying the convenience store, that he would come to us to pick up the deliveries, and that we could pay a flat fee per box, regardless of weight or size! Yup! True story. So usually, you have to pay more if the package weighs more. For some reason, this delivery company was offering a flat rate per package regardless of size or weight. Honestly, I don’t know how they make any money…seriously. And we had a lot of packages going out at that time, so the delivery company thought we would have around that much. So we told them that we usually don’t have this many orders, but they said they were okay with it. In the end, we somehow made a deal for 3,000won per package! Unbelievable. My wife and I felt like we won the lottery. And the best part was that we no longer had to input all of the information in the convenience store packaging systems, which can take a long time. Instead, we print up the labels at our store, which saves us a whole lot of time. So yeah, making a deal with a delivery company can cost your business less time and money if you’re a business that ships goods to customers in Korea. Unfortunately, these delivery companies only make deals with people they want. Some companies will cut you a deal if you send out at least 100 deliveries a week. We had a few people ask us if we wanted to make a deal with them when we first started, but their minimum order count was too high for us at the time. In the end, the partner we have now felt like it was worth it for them to give us a deal.

We now have some software that has been installed on our computer, which we use to print out the order details. We print out the details on some sticker paper template and stick it to the box. Then the delivery guy comes with his scan and picks up the box and the money for the delivery. It’s awesome, they even have tracking numbers and we can see approximately when it will arrive, when it has arrived, and the details of the delivery guy.

So yeah, if you are thinking of doing a business in Korea, great! Make sure you take advantage of the great delivery services available in Korea. The delivery system in Korea is insane and I haven’t even talked about the motorcycle guys, the truck delivery services, and the grandfather subway delivery system! Yup, the grandfather delivery guys that use the subway to deliver goods since the subway is free for seniors. Maybe I’ll talk more about these other options in my next random thoughts post about delivering in Korea.

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Tony Teacher

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