Economics of Mailboxes Etc franchises and why you may not want to rent a mailbox there Mailboxes New Logo

From reading a few articles on-line, and from looking at a few posts on Talkbrown, I have seen a few complaints from franchise owners about the difficulty of making a profit.

The economics of the "mailboxes" part must be especially unattractive. It's a lot of work every day to sort mail into boxes. If you imagine a store with perhaps 200 active boxes, and rates of about $200 per year per box, it probably only generates $40,000 per year in mailbox revenue. After paying sales taxes (pretty high in California, especially in urban areas), and then payroll taxes and so on, that doesn't leave a lot of money to hire a competent employee to do the work necessary to operate those mailboxes, perhaps explaining the extremely high employee turnover I saw at 9663 Santa Monica Blvd. I would guess the mailbox rental part of the business runs at break-even at best.

My impression from reading the posts on TalkBrown is that their main revenue comes from selling UPS delivery services. They sell these services at a premium. They charge approximately twice what UPS itself charges directly. (There's nothing wrong with this; convenience is worth a premium.)

By this reasoning, they make their money on the "etc", not the "mailboxes", which goes a long way to explain why the owner of this particular franchise had so little concern for how his store handled a mailbox customer, and also why MBE corporate didn't care ("the phones are ringing" as Mario said, words which, in my opinion, should never be spoken by a customer service rep).

I notice also that these two stores are vigorously promoting their notary services. That's another high-markup service ($10 for 3 minutes of work) which is part of the "etc". My guess is they make their money in shipping, notary service, anything but the mailboxes.

Smart businesses cut the unprofitable areas out of their business entirely. Good restaurants have short menus. In future I won't get services from any business that does a certain service as loss leader or a way of attracting customers to their real profitable businesses.


Mailboxes 90210