| FREQUENTLY ASKED QUESTIONS (An mock interview between a potential client and Sparx - Owner of Espresso) |
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| Q: What is Espresso Delivery Systems LLC? A: Espresso Delivery Systems LLC represents a radical departure from traditional urgent point to point messenger companies. Utilizing cutting edge communications technology (Nextel phones) we were the first courier company in the world that had multiple clients in conjunction with multiple order takers, multiple dispatchers, multiple couriers, but with no base of operation. Q: What do you mean about "no base of operation"? A: It simply means that the couriers themselves are rolling through traffic order taking and dispatching, while at the same time, accomplishing the deliveries. Q: Why would someone want to structure their company like this? A: Simply put, this new way of structuring a courier company has changed and will continue to change the face of the courier industry worldwide. What this system does is simply eliminate the "middle man" between the client and the individual/s doing the delivery. I am proud to claim that I was the first to introduce this business model. Q: What are the advantages of this system from the rider's perspective? A: The advantages are plentiful. Not having the overhead of rent/utilities/staff for an office somewhere means I can simply turn around and use this money to pay my messengers the absolute highest possible wages in San Francisco. At this time, depending on which company we're talking about, the commission rate for bikes ranges from 37% to 50% of the total delivery price, and vehicles maxing out at 35% of the total delivery price (plus 48.5 cents per mile). I pay out anywhere from 63% to 90% of the total delivery price for bikes, and 35% to 70% for vehicles (plus 48.5 cents per mile). These rates are undoubtedly the highest rates in San Francisco and quite possibly the highest commission rates in the world. Obviously, this is going to generate much interest amongst the best messengers. Other major selling points for couriers include the fact that Espresso is run in a quasi-collective fashion, and full medical and dental benefits are provided free of charge (which is unprecedented in this industry). Q: Why do you have variable commission rates for your employees? Is this normal? A: Actually, Espresso is the only courier company that I know of that does this. I'm somewhat of an odd capitalist, in so far as that when business is slow I increase the payout rates for my employees. Common capitalistic protocol would suggest that I should do the exact opposite - reduce costs when sales are down. While I do at times lose money over the short term with a variable payout schedule, it's actually a very effective long term business strategy - I'm simply investing in my future. Ultimately, I consider my employees my friends, and I want to take care of the people that take care of me. Paying out at a higher rate during slow times introduces paycheck consistency in an industry that is often "feast or famine". Plus it promotes a level of employee allegiance that is unparalleled. I can hire the best and they stick around for a very long time. Q: So what are the advantages of a "de-centralized" system from the client's perspective? A: First of all, not having the overhead of rent/utilities/staff for an office somewhere means that not only can I pass the savings along to the riders, but also to the clients. Overall, out of the thirty or so courier companies in San Francisco there are only five or six companies in San Francisco that I would deem "high performance" - in terms of consistently hiring quality people and consistency doing quality work. Amongst these companies we have lowest rates. Second of all, this system means instantaneous order taking and tracking of packages with the individuals actually handling the packages. Have you ever called your present courier company to track a specific delivery and heard, "I have that particular package. I'm currently rounding Second and Folsom and I'll be there in four and a half minutes." I doubt it. But you will hear that at Espresso. Q: What are the disadvantages of this system? A: The major disadvantage of this system may or may not actually be a disadvantage depending upon on your perspective: we simply cannot be a "large" or "high volume" company. We can only handle a certain volume of messengers/deliveries/information before reaching a point of diminishing returns. In essence, Espresso represents a closed system in which it is in everyone's best interest to limit the volume of couriers/deliveries/information that we're dealing with on a daily basis. The trick for Espresso is pick and choose our riders/clients very carefully to ensure that we have the highest possible quality within that closed system. Q: Isn't structuring a courier company as a "closed system" somewhat short-sighted and not really in your long-term best interest? After all, aren't you one day looking to get off the bike and just handle the clerical duties for Espresso? Without extensive volume and thus significant profit margin how do you plan on making the transition out of riding? A: Those are extraordinarily astute questions! Yes, it is quite true that most individuals that start courier companies view substantial growth as the "means" to the "end" of getting off a bike or out of a car. Let me begin my position by stating that after working in this industry for over twelve years and in multiple cities I have observed that virtually without exception one can always make this conclusion: there is an inverse relationship between the size of a messenger company and the quality of their service. Furthermore, I can tell you that there are two main types of courier companies: those that start out by offering low quality service, and as they expand continue to offer low quality service; and the other type that starts out by offering high performance service, and as they expand begin to lose their level of consistent quality. Why is this the case? Simply put, this is because there is always a limited pool of high performance messengers out there. And as these companies expand beyond the threshold of this limited pool, the quality of their service will inevitably decline. I have yet to meet any owner that has fully understood the ramifications of this painfully obvious inverse relationship. My goal as an owner is to simply achieve the highest possible return on investment for all parties involved by always maintaining a structure that promotes long term equilibrium between size and quality. Q: Espresso seems to be a rather small company. Have you ever found yourselves unable to cover a delivery because you only have a limited amount of messengers on the road? A: Yes. Actually our system is designed not to cover all of our work, but most of our work! We have realized that our system works most effectively with only four to six couriers on the road at all times (trust me, you would be extremely surprised with what four to six top messengers working together can accomplish in a limited amount of time). There have been peak times in the past (albeit, very rarely though) where we have needed seven or even eight messengers to accomplish the volume of work that we had. On the outset this appears to be quite problematic, however it's not because we have several "sister companies" - other companies that are interconnected with our communications system that we have immediate access to at all times. Because of these companies Espresso has access up to fifty messengers at any given point to cover virtually any volume of work. Internally, since everyone is paid on a commission basis it doesn't make any sense having seven or eight people on the road 100% of the time when four or five messengers can cover 100% of the work 90% of the time. We simply subcontract out deliveries whenever appropriate. With this system we don't dilute our commission based pool internally, yet we still have the "insurance policy" of our sister companies when necessary. Q: Well, you've sold me on Espresso. Anything else that you would like to add? A: I just want to state that Espresso Delivery Systems LLC represents the most cost effective way to spend your courier dollar here in San Francisco. In terms of quality, we simply dominate the high performance market. I am so confident in this that to this date I haven't spent a single penny on advertising, and am relying completely on "word of mouth" for the growth of the company (in terms of both messengers and clients). |
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