Natalie and Adam Bamford started Colleague Box during the Covid-19 pandemic, but its growth to a multi-million pound business in just two years is being hampered by Brexit barriers to exports.
We caught up with chief executive Adam Bamford to learn more. As a start-up, their experience shines a different light on trade after Brexit compared to that of established businesses we’ve covered previously.
Adam told us the company “grew from an idea our old CEO had when the pandemic first hit”. This was a time when that business had furloughed many of its 70 staff. He continues, “People were at home with kids, not really part of company day to day”. He describes the CEO calling him while he was painting fences to say, “I want to send everybody a gift”. He wanted something personalised, affordable and that would fit through the letterbox, because, Adam says, “we’re all looking at the bank balance at that time”.
They were able to make the gifts very personal as they knew all the staff, adding touches about ‘kids and dogs’, and the importance of people’s jobs even when not in the office. Each cost about £8.00, Adam recalls, adding “the response from staff was phenomenal”. He says that a few weeks after this they got a call from Lincoln City football club who had seen online posts about these gifts.
They wanted to take the opportunity to see if there was a possible business, so they agreed to Lincoln City’s request – in exchange for a press release. Liam Scully, Lincoln’s CEO “did us proud”, Adam recalls, “it caught the mood about making people feel loved and still part of a company”.
“It was almost like we’d walked through the door and given his colleagues a hug.”
This led to many more enquiries and was the real birth of Colleague Box as a personalised gifting company, “delivering happiness; bright colours, nice things through the post with a personalised message”. Adam continues, “we sold first boxes for actual cash in May 2020 and grew steadily through June, when we did a marketing campaign and got an order for 21,000 pumpkins”.
A well-known courier wanted to hold a pumpkin-carving competition for all their staff. Adam said yes before checking the numbers, thinking it would be just a few hundred. “When I went upstairs and told Natalie, her face was a picture”, he laughs.
At this point, they moved the business from their home to their first proper warehouse in Chaddesden, Derby. They ended up employing a lot of students, who were deprived of both university contact and hospitality jobs. He says they created a real buzz, they had youth and a ‘get it done’ energy.
The company grew rapidly with orders numbering thousands at a time, some for staff based in Europe. As this was in the transition period, Adam says they could just order without worrying.
By this point, they had peaked at some 65 staff and moved to a bigger warehouse in Derby. They had reached a turnover of £1.6m from a standing start, and without so much as a bank loan. Adam says, with some understatement, “it was phenomenal”.
He explains that they started at home and, it being lockdown, they would use their one outing a day to stock up on goodies at the supermarket. As they’ve grown, they’ve focused on sourcing from small independent businesses, or those with an ethic they shared. Adam says they looked at Lincoln companies like Naked Marshmallow and the Cocktail Delivery Company or start-ups like Made for Drink. Now they try and avoid big, well-known brands, looking for quality, niche suppliers in the UK.
The trouble started after another big order, this time for 23,000 boxes.
Put up the barriers
In January 2021, some of the new post-Brexit rules came into force. Delivery companies brought in new checks and overseas shipping costs went up. By the summer, more rules had arrived. Suddenly, for each order they had three different screens of information to full in.
The first, Adam says, was about the recipient. The second was the sending company. The third required details about each product. Not just a chocolate bar or bottle of beer but where it was made, where the raw materials came from. Its weight. Where it was sent to and where shipped from. Where it was made. For every single product in the box. He says, “It took 20 minutes per parcel for an order that might have 30 parcels”. Paperwork had to be stuck to the box, “but we had to swallow that”. Then, “there’s VAT and tax to add, and we could spend an hour, six hours trying to find tax rates until it got to customs. And we’d already given a price to customers”.
It gets worse
Adam Bamford says it is often impossible to get the actual amount of customs duty owed from UK systems. He says they recently quoted delivery for boxes to Portugal at 12 Euros, but two of them ended up costing 50 Euros. The five boxes had the same content and matching paperwork.
Now, he says, “we have to say to customers we don’t know how much it will cost”. He says they can’t employ a customs broker, because there might be weeks when they have no overseas orders.
“We ain’t got a clue what it’s going to be.”
He says, “It’s not sustainable. It’s crushing our spirit to go out into the EU and do what our customers want us to do”. Sometimes an order will have just one overseas box, but recently they turned down an order for 3000 boxes. Adam describes how “we had to say there’s no point in us looking at this, it’s going to cost tens of thousands on delivery fees”.
Like many businesses, they’re exploring setting up a base in the EU. “It’s a massive gamble and a massive amount of money to go out of the country”, Adam complains. But, he continues, while “it hurts on so many levels as you go through the supply chain, it’s not sustainable in the long term [to continue as we are]”.
“What the hell did we do that for?”
Businesses they talk to, he says, see no benefits and are are saying, “what the hell did we do that [Brexit] for?” It’s almost as though the government didn’t really understand what Brexit would really mean.
Adam and Natalie have been in touch with their local MP, Amanda Solloway, who has visited their warehouse. He says she asked them what she could do to help them. He laughs a little at this recollection, because “Brexit, cost of living, energy prices, we can’t do any of that, but they are literally the things holding us back. They’re hard, I get that but they are the things stopping us”.
He says cost rises and energy rises mean that suddenly it’s not looking sensible to upgrade vans and cars from diesel to electric. Struggles to ship to Europe and the current cost of living crisis “affects our growth and so how much we might invest and how many jobs we could create”.
He goes back to that order for 23,000 boxes. He describes how everything was ordered and most was ready, but they needed two items ordered from within the EU. Santa hats and gloves printed with a company logo – “these ended up delayed in customs, it was the 11th hour, and we had to refuse other orders”, because they needed to be able to get that order out when the products cleared. They only just made it.
Colleague Box is a pandemic success story. But its performance and overseas growth is being hobbled by Brexit.
Global Britain could do so much better.