CSE’s James Black recently sat down with John Clarke, VP of Sales and Marketing at PUDO Inc. (CSE:PDO), to discuss the challenges presented by eCommerce through the “final mile” of fulfillment (1:46), the environmental impact of limiting missed deliveries (5:43), and the unique challenges of urban versus suburban delivery (8:03).
Listen until the end to hear about John’s experience at Google, what it means to bring a “scrappy” mentality to sales, and how big etailers like Amazon and Walmart stand to benefit from a final mile solution like PUDO Point.
The CSE proudly welcomed PUDO Inc. (CSE:PDO) for a Market Open at the CSE Media Centre on December 10th, 2019.
Headquartered in Canada, PUDO Inc. operates as a courier and integrated express package distribution company. It is currently North America’s only carrier-neutral parcel pick-up and drop-off technology and logistics network, offering pick-up and delivery of letters, small packages, and documents. PUDO members, participating e-commerce retail customers, and any business sector with a home-based workforce can pick up their parcels from easily accessible locations with extended hours, such as convenience stores, gas stations, or grocery stores, at any time, including evenings and weekends.
“To open the market today is an absolute privilege. Being with this group of senior management here that I well know, and the CSE has been a privilege to know, and I’m really proud to be here for four years. And hopefully it’ll continue for another 40 years,” said CEO Frank Coccia.
“It’s not easy to do what we’ve done, and open up a national network as we have, and we brought in professionals to help us go to market with this program. We were a little bit ahead of our time when we launched in 2015, as ecommerce is now becoming a much more mature market. The team is just growing day in, day out. And I think the biggest satisfaction we get as a team with our network is the smiles that we put on the owners of our convenience stores, which are typically ma & pa shops that are working 18 hours a day, and they’re family-run businesses, and we’re bringing foot traffic back into their stores. And it absolutely brings us so much joy.”
Joining Coccia at the Market Open was John Clarke, VP of Sales and Marketing at PUDO.
View the podcast on this Market Open featuring John Clarke here.
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PUDO Inc. debuted on the CSE on July 28, 2015 at $0.70, proceeded to drop to $0.18, yet within two weeks was conducting a private placement of 1.1 million shares at $0.63. Using that as a reference price, the stock has closed up as much as 443%, and as of publication date is up a still respectable 280%.
“While you are out and about, we’re here accepting your deliveries” reads the tagline on the company’s website, and that pretty much captures the essence of the PUDO service. We all know how frustrating it is to be waiting for a package, only to arrive home and find that someone tried to deliver it, but unable to do so left a sticky message indicating that you cannot obtain your parcel until the following day. Even more annoying is learning that the package had been delivered, only to be stolen off the front stoop.
PUDO completely eliminates this inefficiency by creating locations called PUDO Points where customers can specify their parcels be dropped off so as to be picked up at their convenience.
The benefits to all participants in a transaction run deeper than that, but at its core the service makes life more convenient for consumers. It is the simplicity and connection to all of us that PUDO CEO Frank Coccia believes is behind the impressive performance by the company’s shares in the short time the company has been public.
“It is a story that everyone understands,” says Coccia. “It is not a biotech company or mining exploration where it can be difficult to see the real potential. I enjoy going out and speaking with investors. They see that couriers, retailers and consumers can have a field day with this.”
Digging a little deeper, one learns why the concept would have more natural allies than competitors. Coccia explains that PUDO seeks nothing more than to provide pick-up points inside convenience stores and other established physical locations.
Couriers thus know they have a guaranteed delivery and save money by not having to attempt re-deliveries after a failed visit. Retailers that ship product to fulfill customer orders gain flexibility to negotiate with multiple couriers and thereby reduce their shipping costs. The consumer gains the peace of mind that comes with knowing a parcel is available to pick up at a convenient location whenever they like. Convenience stores and other PUDO Points not only earn fees for holding and putting parcels in the hands of their owners, but also from impulse buys thanks to the extra foot traffic.
Coccia says that investors also like the fact that PUDO keeps its costs under control by needing little more than to maintain and support the technology behind the service. “The beauty of PUDO is that we don’t own anything outside the technology,” explains Coccia. “The bricks and mortar is already there. We are just taking advantage of the elements in an ecosystem that already exists.”
Growth on the ground has been quick to date, with Coccia saying that the company has already established some 800 PUDO Points in Canada and the US and over 6,000 registered locations, this latter category being locations signed up that have yet to go through training so they are fully ready to roll.
“Once we hit 3,500 to 4,000 locations in Canada then we should be exactly where we want to be,” Coccia says. “In the US we have over 3,700 registered locations at present and ultimately want 16,000 to 20,000. Once we reach those two numbers we will have a fixed cost with a control centre that manages everything.”
Experience helps small companies avoid costly mistakes, and fortunately for PUDO Coccia has been at this for 35 years. “I built niche courier systems, which basically are courier systems for one industry. We did it for the travel industry and the financial services sector and for lawyers serving one another documents and papers. It is all about consolidation where people can pick up mail and drop off their mail.”
Coccia expects growth to continue apace, thanks in part to several potential partners he is talking to in the US. “We’d suddenly have a network in the US that could rival that of any national carrier – UPS or even the post office,” he says.
With just 15.6 million shares outstanding, PUDO has plenty of room to maneuver if Coccia deems it necessary to raise equity capital for supporting growth. And while the company is not flush with cash, liabilities are fairly low as well, so with revenue beginning to come in Coccia has a good shot at preserving a nice share structure until PUDO reaches the point at which it becomes self-funding.
Experienced management, enviable share structure, rapid growth, consistent communication. Does that qualify as a formula?