When MT spoke to Adam Ewart back in 2012, he was fresh off an appearance on Dragons’ Den. He’d just pitched the idea of Send my Bag: a door to door luggage delivery service that now - thanks initially in part to the publicity the show brought - ships to over 100 countries worldwide.
Ewart set up the company in 2010 after being slapped with a £50 excess baggage fine. After realising that no one was challenging the budget airlines on baggage fees, he brokered deals with various international logistics companies for cargo space to provide a bespoke baggage delivery service that cut queues at check-in for business travellers and students alike.
Ewart won’t disclose revenue figures (turnover’s ‘in the millions’) but tells MT Send my Bag has been growing rapidly, having established routes to the US, Australia and South America among others (this year it's sent over 200,000 bags).
MT: You’ve grown since we last met you.
Ewart: The airlines have been creating this market for us. If you go back to 2007, they took $400m in baggage revenues; last quarter this year they took over $1bn. Legacy airlines like United have launched economy fares that don't come with hand luggage, BA just announced that boarding would be done in order of ticket price, and Ryanair started to charge for hand luggage.
You have all these costs burdening the industry worldwide, but they don't want to raise their ticket prices because they’re all competing for low fares, so they make their money through different add-ons. For Ryanair, 27% of revenue is ancillary.
MT: It’s interesting that you’ve targeted the student market. What was behind that decision?
Ewart: A lot of students will have the experience of being ripped off by the airlines for an excess baggage charge. We aim to provide the best price as well as the best service, not just among the options to ship something, but over the airlines as well.
The question we often is get is ‘why would I pay you $100 to send a bag when I can get a free bag with an airline?’ The answer is that for all of our long haul routes is if you check a second bag with Emirates for example for Dubai to London, it's like $700. A lot have big fees with second bags. So we’re often cheaper than the airlines, our allowances are so much greater, and our excesses rules are so sensible. If you go over by 2kg we'll charge you £2 not £25.
MT: What has been your approach to funding?
Ewart: It was always necessary to make money as soon as possible. The key to doing that is keeping the costs low: prove the model with as low a cost as possible. We made money within the first few months and have been profitable every year since we were founded. We were fortunately from that kind of background where we could build up money and do self funding. I’ve never had to take on VC money.
Back in 2011 I did take investment from a local entrepreneur (Danny Moore, who led the sale of Wombat for over $200m) who was one of the only people in Northern Ireland who had had a large exit when he sold his business and was a great person to have onboard. I wasn't looking for investment at the time, but felt that down the line this guy would be great to have there to help and provide guidance.
I took £100,000 from him but as a profitable business growing in double digits for over five years now, we've never spent that money. From our side it's never been a problem. We've been able to invest in the millions and it's all been funded through the business.
MT: How did it work out with hiring?
Ewart: In the early days, the business is like your baby. I looked for people that would be a great fit, so if I met someone who I thought was really good at something they might find themselves with a job offer. A lot of the senior team are people I've met through different walks of life.
Every year for the last three or four years we’ve raised our customer service pay by 5-10%. We've added something like £5,000 to our entry level wage. We also offer levels to our customer service team. To achieve a level, you have to have been with us for a minimum number of years and have to do certain things in the business. A lot of our guys have achieved this over three years. When I say we want to provide the best customer service, we can't provide that without the best people. We try to look after each other.
MT: What are the most useful lessons you’ve learned running businesses?
Ewart: I had a musical instruments business before starting this. We bought coloured violins to the UK in a big way, we were selling thousands of them, but there's only so many you are going to sell here.
If you just go for it, you'll get there. The key is you don't give up. Work as hard as you can, throw absolutely everything into it. If it doesn’t work, dust yourself off, maybe do something else before you get stuck into another business idea, but keep going. There are so many lessons I have learned over the years from things that don't work out.
Anything you learn could benefit you at some point. It may not be the right business idea right now, but you can't just sit at home and come up with another idea that will put you on the right track.
What will happen is that you will see an opportunity and because of the experience you have you'll be in a position to make the most of it. I was lucky that I was in Gatwick and was charged for excess baggage. It was my other experience that allowed me to act on that.
Image Credit: Send My Bag