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written by | September 14, 2022

Everything You Need to Know About Post Office Franchise

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Table of Content


The Indian Postal Service has played a significant role in our county for decades. The Indian Postal Service is currently one of the most reliable public postal service systems and remains unaffected by its rivals, such as courier services and other mail and document delivery services. It offers various services like delivery of mails, acceptance of deposits under Small Savings Schemes, life insurance coverage under Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI), and retail services like bill collection and the sale of forms.

To address the increasing demand from citizens, the India Post announced the post office franchise scheme under which the counter services will be franchised while the department will continue to handle the delivery and transmission of posts. The franchisee shall be able to work around the clock and provide services in return for a commission.

Did you know? 

India has the largest postal network in the world, with over 1.55 lakh post offices, 89% of which are located in rural areas.

Also read: Top 10 Business Ideas After Lockdown

Indian Post Office Franchise Models

The post office franchise scheme has two franchisee models:

  • Franchise Outlets: 

In regions which have a need for postal services but where no post office can be established, counter services can be provided through franchise outlets. You can also refer to the types of franchises available in India to get an idea about the same.

  • Postal Agents: 

In urban and rural regions, postal agents sell stationery and stamps.

Features of Post Office Franchise

The Indian Postal Department announced the Indian Post Office Franchise plan primarily to increase its reach in locations where opening an office is challenging. However, in addition to serving that purpose, franchise owners also have the chance to make money by offering the following services and goods:

  1. The franchisee can make reservations for e-post, fast post, enlisted post, and money orders (based on the EDBO or Extra Departmental Branch Office model). There are no restrictions on the number of bulk orders or speed post articles undertaken, but bulk speed post articles orders do not qualify for a refund. Also, Franchisees aren't permitted to accept large orders from Book Now Pay Later clients.
  2. The franchisee is permitted to sell stamps and stationery that contains philatelic items. Philatelic items refers to collection of stamps and related items, bought by collectors. However, the franchise owners are not allowed to book or sell any money orders worth less than ₹100. Franchise owners may also represent Postal Life Insurance and collect the premiums regularly from clients.
  3. Franchise owners are also permitted to offer retail services, but only those associated with other organizations. Examples include the sale of revenue stamps, CRF (Central Recruitment Fees) Stamps, tagline collection, and bill or service payments for the department.

Eligibility for India Post Franchise

To become associated with the post office franchise, you must meet specific requirements set forth by the Post Office:

  • Any person who wants to work as an agent must be at least 18 years old.
  • They must be a citizen of India.
  • They must have completed the eighth standard or above in a recognized school.
  • Postal pensioners and anyone with knowledge of computers are preferred.
  • Urban and rural individuals, institutions, organizations, and other entities are all eligible to apply under this program.
  • Candidates with a family member employed by the postal service are ineligible to apply for a franchise.
  • Small business owners, utility stores, and stationery stores in cities and towns can also participate as agents in addition to individuals.
  • Additionally, eligible persons and their respective companies can set up postal services in SEZs, emerging industries, colleges, polytechnics, universities, and even private colleges.
  • After receiving the application, the concerned Divisional Head shall decide based on a report from the ASP(Assistant Superintendent of Posts)/SDI(Sub-Divisional Inspector of Posts).

How to Apply for the Indian Post Office Franchise

You can either pick up an application for a post office franchise from your local Indian Post Office or access the same online by visiting the official website. The following steps explain how to go about it.

  • Step 1: Franchise applicants would have to apply for the Indian Post Office Franchise in a specific format along with a fee of ₹5,000.
  • Step 2: The department and the chosen franchisee will sign a Memorandum of Agreement. 
  • Step 3: The ASP/SDI confirms that the applicant meets the selection criteria.  They take into account the requirement to select individuals with the ability to manage and advertise a variety of products. They also consider if the applicant has a sense of the community's needs and the public accountability of the profession, and a willingness to accept technology solutions.

Note: Before applying, confirm that there are no post offices within 10 kilometers of your location and that postal services are required there. This will increase your chances of selection for running a post office franchise.

Also read: 10 Best Wholesale Business in India 2022-23

Components of Post Office Franchise Form

To become a part of the Indian Post Office Franchise Scheme, one can easily apply online and fill out the post office franchise application form. The particulars of the post office franchise application form are mentioned below:

  • Name of the Applicant
  • Country of Origin
  • Age (Min. 18 years with attached proof)
  • Whether Income Tax applies to DoP pensioners, Yes or No. 
  • PAN number of the applicant
  • Current Business/Profession
  • The current address of the business
  • Proposed Business hours and ownership of the business place (Owned, Rented & Leased)
  • Prior retail experience Information with at least 2 references, including addresses
  • Business Strategy for the Franchise

Commission from Post Office Franchise Scheme

Depending on the sales of the goods and services rendered at the outlet, the applicant may begin receiving commission from the department. Depending on the number of customers, the initial earnings can start around ₹20,000 and go upto ₹50,000.

The rates of commission are described below:

Services

Commission per Transaction

Booking of Registered Articles

₹ 3.00

Booking of Speed Post Articles

₹ 5.00

Booking of Money Orders:

(i) with a value of ₹ 100 to ₹ 200

(ii) with a value above ₹ 200

 

₹ 3.50

₹ 5.00

Booking of Registered Post Articles and  Speed Post Articles beyond 1000 articles

20% additional commission for respective articles.

Sale of Postage stamps and stationery (including philatelic items)

5% of the sale amount 

Retail services including the sale of revenue stamps, central recruitment fee stamps

40% of the commission earned by DoP

Monthly Business (from Registered Parcel and Speed Post Parcel, separately)

Commission on monthly business

 

Speed Post Parcel

Registered Parcel

Up to ₹ 5,00,000

10%

7%

₹ 5,00,001  to ₹ 100,00,000

20%

13%

₹ 100, 00,001 to ₹ 500,00,000

25%

16%

Above ₹ 500,00,000

30%

20%

Also read: All About the Floriculture Business In India

Conclusion 

The Indian Postal Department has declared its intention to provide franchises to Indian citizens to help them expand their horizons by reaching places where it is challenging to open an office and operate delivery services. With a small initial investment, one can start an Indian Post Office franchise and earn a respectable income from the various commissions.

An individual or business owner must make an informed decision to launch the franchise. In addition, several requirements, eligibility standards, and fulfillments must be met before obtaining or launching the post office franchise. Some of the best courier franchises in India can be studied for an in-depth analysis. Thus, careful SWOT(Strengths, Weaknesses, Opportunities, and Threats) analysis and study are required before making a decision.
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FAQs

Q: How many days does it require to complete the registration procedure for the India post franchise?

Ans:

The average time taken to complete the registration process of India Post Franchise is approximately 14 working days.

Q: How much will I make monthly if I start Post Office Franchise?

Ans:

Initial monthly earnings can range from ₹20,000 to ₹25,000. As the business grows and depending on the number of customers, you may be able to gross up to ₹ 50,000 per month.

Q: What is the amount of deposit required to be made?

Ans:

The deposit required to be made ₹5000.

Q: How much investment is required to start a post office franchise?

Ans:

Interestingly, only ₹5000 is required to commence a post office franchise. Hence, the amount of investment needed is not a limitation.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.