What’s one of the best ways to make a ton of money with only 1200 square feet?
Sure, renting a home for that size gives you some recurring revenue. But this is one instance where you shouldn’t think big.
You can rake in far more with a 1200 square foot mailbox store than you would by renting one house that size!
Renting out only 100 mailboxes for $20/month would net you a $2K a month return. And that’s not even factoring in upsells and added shipping options with FedEx, UPS, and USPS.
Sending and receiving mail sounds too simple, right? Doesn’t the post office already handle that? What’s the catch?
The post office is a huge pain in the ass.
Anyone who waited 30 minutes in line to mail a Christmas present while one overworked and grumpy employee handles the line understands the idea behind “going postal.”
Home business owners don’t want their private addresses listed or used for most mail, either.
And porch pirates steal from 67% of Americans.
For entrepreneurs, this is a gold mine.
Americans need convenient places to send and receive mail.
One that doesn’t involve committing their entire lunch break to holding heavy boxes while someone pays for their stamps in pennies and holds up the line.
A place for physical mail storage so they can pick up their monthly Amazon deliveries whenever they want.
One potential solution for postal customers and entrepreneurs? Starting a mailbox store in your region. It’s an entrepreneurial move flying under the radar. A mailbox store can be a savvy investment with a ton of upside potential.
Follow this guide to get your foot in the door with your own virtual mailbox business.
Why Start a Mailbox Store?
UPS says they deliver 27 million packages a day. FedEx ships 10 million every day. The volume is huge.
Do one better: combine shipping for UPS, FedEx, and USPS in one place.
Give customers the best price and convenience: a real one-stop shop.
So maybe now you’re planning to buy a UPS or FedEx franchise. Don’t.
Those companies offer valuable franchises but cap your income in a secret way.
They limit how many boxes you can put in one location.
Start or buy your own private mailbox business and set it up the way you want instead.
Compared to other business models, it’s relatively easy and inexpensive to launch a virtual mailbox business.
Just ask Lisa Song Sutton, mailbox entrepreneur extraordinaire.
Case Study: $22K Down for a $120K Return
A few years ago, Lisa knew the real estate world but wanted a new venture.
One of Lisa’s mentors sent her down the rabbit hole with pack-and-ship stores years ago. She shadowed an existing store owner to learn the ropes, then rented a space, hired an operator, and got to work.
Now she’s a few locations deep, offering very similar options in each one:
- Notarizing legal documents
- Private mailboxes/hold services for incoming mail
- Packing and shipping for the major carriers
- Registered agent services
She made over $120k profit in doing this with very little cash down ($22k!).
Understanding the Business Model
You can serve three primary types of clients with the private mailbox store model:
- Business owners who need a virtual address for business registration, important document delivery, or privacy purposes
- People who need a place to pack up and ship materials
- People who need a place to receive mail and packages
What do these customers want?
Access, convenience, and customer service. That’s it.
People often overthink the process of becoming an entrepreneur, but sometimes the most basic and needed services bring the most opportunity.
Think about it.
Why reinvent the wheel when you can build a business with very little startup cash that exists because the other mailbox and pack/ship options are wildly inefficient?
You can start earning revenue even faster if you buy an existing mailbox business and improve operations.
Sure there are additional features you can offer alongside mailbox rental services, like:
- Mail shredding
- Mail/package forwarding
- Mail scanning/digital mail storage
- Check deposit service
- Fax sending/receiving
- Moving truck rentals
But just having a place to send and receive mail is a great entry point.
Steps to Start Your Own Mailbox Store
If you start from scratch, find a place to rent your space first.
Your rent is likely your biggest expense, and location matters so put effort into picking an ideal location. One of the big benefits of a private mailbox store is convenience.
Skip past many of the most common new business owner challenges by buying an existing pack-and-ship store.
To get traction ASAP, follow these steps:
- Research the market
- Find a rental space
- Build out the store
- Hire an operator
Do Your Research First
Get to know your potential customers. Spend time reading through comments and complaints about the typical issues with shipping things. Identify your target personas and how you might reach them.
Since you’ll be a shipping partner, check out how to become a UPS shipping partner and FedEx shipping partner.
Lisa cut her learning curve down by thousands of hours by doing one thing: finding a mentor.
She made an existing Las Vegas area pack-and-ship store owner a deal he couldn’t refuse. She followed him for two weeks, learned everything, documented his processes for him and for her, and promised not to compete in his direct area.
Even if you can’t shadow someone in your region, you can probably set up coffee with someone who owns one of these businesses.
Finding a Rental Space
The rent for your space is your biggest expense, so you want something that gives you good potential for ROI from foot and car traffic.
A few pro tips to keep top of mind:
- Choose something near other amenities (like a shopping center, gas stations, or apartment buildings) where it’s a no-brainer for someone to add this stop to their errands list.
- Verify it comes with enough space to build mailboxes, for a service counter, and a retail area with packing supplies.
- Don’t buy too much: smaller square feet may be better so you can maximize your per-square-foot income.
- Find a commercial real estate agent to help you (Doesn’t cost you anything!)
Building Out Your Store
You need a few things in the store at launch time:
- Counters
- Mailboxes and mailbox keys (look on Craigslist for used options!)
- Packing materials
- Flyers/signage/initial marketing materials
- Cash registers
- Access to shipping software (Check out PostalMate as an all-in-one)
Expect to spend $15-25k on your launch expenses. If you buy an existing store, you’ll spend much less.
Finding and Hiring an Operator
Unless you want to sit behind the counter yourself, get someone with customer service skills to do it for you.
An hourly or salaried job may not be enough for some.
Think about how you can make this a desirable job for the right person.
Offering bonuses or equity in your growing mailbox franchise could attract someone who wants to go above and beyond because they have a stake in it, too. A tiered incentive model provides room for growth.
A motivated, hungry, and customer service oriented operator can take a lot of work off your plate. You may only need a few key staff members in place, but filling these roles requires time and dedication to getting the right people.
You don’t necessarily need someone who has worked in or run a shipping and mailbox company before. Look for experts in similar industries (like hospitality) where customer care reigns supreme.
Use an operating agreement to clarify everything with your new hire.
Attracting Customers
It’s all about getting the attention of the locals for a mailbox business.
Clear, compelling signage with a bulleted list of services is a good way to start. From there, build out a website with an explanation of hours, services, and costs.
The bottom line? Make it easy for people to find and work with you.
A local campaign may also generate a lot of buzz in your early days. Things like:
- An open house
- Giveaways
- Ribbon cuttings
- Local newspaper ads
- Social media campaigns
- Offering a free month to your first X customers
Can all build your customer base.
As you grow, remember to ask customers to leave you reviews. This will help boost your presence online through your Google Business account.
The biggest challenge when you start is that people may not know you and what you do, so you need to consistently market the full range of services and the convenience aspect to position your company as a viable alternative.
Deliver Success with a Mailbox and Shipping Store
The American desire to send and receive packages is going nowhere. Now that more companies offer cheap shipping and simple returns, people spend a lot of time dealing with the mail.
That should be music to the ears of an aspiring mailbox store entrepreneur.
This business model is easy, hands-off, and takes limited cash to start. You can also bypass all the usual startup challenges by finding an existing mailbox store to buy.
Maybe it sounds like a boring business, but who cares? Too many people skip to the shiny, risk-filled startup ventures that pop like a balloon just a year or two later. Shouldn’t business be about serving customers?
People need to ship things and receive things.
Existing services suck.
Investing in low-risk businesses with a ton of upside potential is well worth it: think of this one like selling mini real estate!
