The Canada Post strike and lockout are over but some e-tailers say it will take a long time to recover from the damage done to their businesses.
“A half-million-dollar-a-year business was reduced to zero. It crippled us,” said Matt McDougall, owner of Moviemat Entertainment Ltd. The company sells goods including toys, music CDs, movies and sports memorabilia from a bricks-and-mortar store in Renfrew, Ont. as well as over its Web site www.moviemat.com and through eBay. Without its usual shipping method available, the company saw online orders grind to a halt.
The rotating walkouts by Canada Post employees that began June 3 had almost no effect on McDougall’s business. But when the crown corporation locked out all of its 48,000 workers on June 14 “we went to zero revenue for the whole lockout,” McDougall said.
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“Orders plummeted. It just stopped. People realized they couldn’t get their stuff so they stopped buying. We do a lot of business with hockey memorabilia and we noticed right after the (NHL) playoffs that orders from the west coast just stopped,” he said, referring to an expected boost in orders from Vancouver Canucks fans that never materialized although the team made it to the Stanley Cup final.
“It stole the Christmas (retail) season from us,” McDougall said, noting that he would normally get 60 orders per day online for Stanley Cup related items but “we didn’t get a single order.”
McDougall ships out about 10,000 orders combined per year over his own site and eBay. This past weekend as the lockout continued, he received only two orders online. The company didn’t bother using alternative shipping methods such as private couriers because there was no point without orders coming in, he said.
“Since the strike my sales are down at least 60 to 70 per cent,” said Rod O’Driscoll, owner of Eastcoastcoins.ca in St. John’s, Nfld. The business sells collectable items such as coins, stamps and military memorabilia over eBay as well as its own Web site.
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“I would estimate so far (I’ve lost sales) probably in excess of $10,000 just during the strike,” said O’Driscoll, explaining that most of his online order volume dried up as customers feared their purchases wouldn’t get to them.
About 70 orders O’Driscoll shipped through Canada Post right before the strike are stuck in the system right now, he said. He normally ships all of his goods through Canada Post but sent a coin via letter mail to New York using FedEx last week. He said he didn’t use other alternative couriers during the labour disruption because that one delivery cost so much: $47 for the standard overnight U.S. shipping rate. As for using a private shipping service like Purolator, UPS or FedEx in future to avoid Canada Post disruptions, McDougall said he’ll stick with the crown corporation.
“I have no choice. There’s really no cost effective alternatives,” he says.
McDougall said he isn’t the only e-tailer feeling pain from the Canada Post situation.
“I just got back from a coin show in Toronto and a lot of the guys were experiencing the same,” McDougall said.
Did the strike slow traffic or sales transactions at eBay.ca?
“There’s no specific sales data but most of what we have at this point is anecdotal,” said Kevin Wolfley, who is responsible for customer support as community relations manager at eBay Canada Inc. “Canada Post is the only shipping option we offer in our online shipping calculator tool,” he pointed out.
In a survey last week by the online business magazine Canada One, 85 per cent of small businesses surveyed said the labour stoppage was hurting their business. Fifty-seven per cent said they would consider alternative payment options and nearly 80 per cent of those said they’ve already switched and have no plans of using Canada Post again.
eBay transactions normally account for a quarter of the $5 billion spent annually by Canadians in online purchases excluding travel and groceries. Although eBay’s sales figures during the strike period won’t be made public until the company’s next earnings release, eBay Canada did notice more questions in its online forums asking about the strike and looking for ways to cope, Wolfley said. The company posted suggestions for coping with the labour dispute such as:
- post a reminder to customers – especially those from outside of Canada — on your Web site that mail would be disrupted by the Canada Post situation
- communicate with your buyer to find out how soon they need their purchase delivered and if they can wait until the strike is over
- offer customers alternate shipping options such as Fedex, Purolator, UPS or even a local courier service if the item is only being moved locally
- if your business is located near the U.S. border and you have items destined for the U.S., consider driving or couriering them just over the U.S. border; if their final destination is further into the U.S., have them mailed or shipped using American mail or courier services once you take them just over the border
Another tip offered by the Canadian Federation of Independent Business on its Web site was to use Interac e-Transfer services to send payments to suppliers to whom you would normally mail cheques.
One of the few e-businesses booming specifically because of the strike is ShipGooder.com, a Mississauga-based Web site where consumers can comparison shop for the best prices on mailing and shipping. Its Web traffic skyrocketed from the normal 500 hits a day to almost 5,000 on June 24 after the site put out a press release promoting itself during the strike.
“We certainly hope it’ll translate into more revenue. We thought the strike was an opportunity to reach out and try to get more subscribers on our website,” said Nancy Chafee, vice-president of marketing at the site.
Canada Post mail is expected to start moving again today after back-to-work legislation was passed Sunday following a marathon debate in the House of Commons.