How a Mail Center Makes Money
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How a Mail Center Makes Money

The Inner Workings of PO Box and Mailbox Rentals

If you think that a mail center makes its money by renting mailboxes…check out these calculations.

Let’s say a mailbox is rented at 15.00 per month.

And also agree that a typical mail center has 300 mailboxes to rent.

That means the mail center can generate about $ 4,500.00 per month. Or, $54,000.00 per year.

This is, of course if all the mailboxes are rented. But not bad.

Now here are some other facts:

  • You often see mail centers offering free months to attreact new renters.
  • You often see mail centers lowering their fees to attract new renters.
  • Mail centers seem to pop up everywhere, often a few blocks between mail centers.
  • Mail centers tend to become mini retail centers
    • Selling postal packaging and shipping services make sense.
    • Selling ancillary services, like notary, keys, lottery tickets.
    • Then selling a variety of other trinkets, gadgets, and supplies.
  • SO ALL IN ALL, a mail center can generate a decent yearly revenue stream.

However, renters stop renting, and renters also change locations. Mailboxes may not always be rented.

Afterall, renting ‘airspace’ is a great way to generate income but not if the mailbox is empty.

A decently run mail center must also have staff and employee costs are usually a heavy business expense.

With 2 part time empllayess, and mail center can cover a 6 day workweek fairly well.

Employee costs might range about $2,500.00 per month, or 30,000.00 per year.

You can see how just this cost can eat away at the $54,000 annual rental fees when fully rented.

Now, we dont know how many additional services or products each center has which can impact the center’s revenue stream, but we do know this:

Mail Centers do compete with each other but its mostly by reducing rent or giving free months to new renters.

In the end, it is the rental value that changes the yearly annual income stream and is used to attract new renters.

What if…

If you can increase the value of renting a mailbox, instead of giving rent away free, why wouldn’t you?

If you can reduce the cost of employee expenses, why wouldn’t you?

If you can enhance your customer experience in your store, why wouldn’t you?

Why they often miss the mark…

Most mail centers may be a franchisee, of a major mail center corporation.

While the corporation may work as a business entity, a mail center owner environment is more like a mama, papa shop.

This is not a criticism, this is a symbol of small business or small business mindset which makes sense.

Many owners work on an imipulse sell, with items, gadgets, trinkets filling all the shelves to get a dollar her a dollar there.

The staff is answering phone calls all day: “Do i have mail in my mailbox? Who is it from:?, Or juggling more than one phone call at a time.

Customers are also now in line more often, while the staff is scurrying around behind the counter.

FACTS:

Studies have shown that up to 3.5 hours per day can be spent on phone calls every day.

Solution: Reduce phone calls.

Result: Less taff time on phones, more staff time with customers.

Result: Happy customers, maybe more sales.

Result: Possible reduced hours of staff needed per shift

Result: Customer gets more value from mailbox services.

RESULT: Customers continue renting.

RESULT: Mail Center competes on Value, instead of Give Aways

SOLUTION 1

Yes, this is self serving for my business, but my 3 years of hands on research and results may be worth it.

My program is a simple QR Code that can solve most of the issues cited above.

I did not choose QR Codes for its simplicity, I chose it after a long process of finding just the right solution for mail centers.

I tried automated IOT complex coded electronic units that would react if a piece of mail was placed within a mailbox, and its motion sensor would trigger an email or text to the mailbox renter automatically over wifi and to their email or phone. Sounds wonderful but the headaches and issues popped up that I was not expecting.

AUTOMATED TECHNOLOGY:

Battery Life: These electronic units used battery power and would need changing too often

Wifi Access: Integration with mail center wifi could at times be limited

Cost: Cost of production and eventual Retail Cost too high for average renter.

BARCODES

This was actually a good option but barcodes are limited in the amount of data it can contain and actions it can trigger.

QR CODES

Initially this seemed likely a good option however at the time, and even though these codes can hold more data and perform more actions, the resultang QR Code was too dense to print and trigger actions efficiently.

THE DILEMMA

You can see the effective use of barcodes or qr codes with UPS for example. This company controls the creation of labels for their packages, so it is easy for them to implement a system to send an alert to recipeients of packages that come in to a mail center. If every person in the USA had a way to create a uniform label system, well that would be good. However all the mail that goes to every mailbox is unknown until it comes in your mailbox.

The maibox in a mail center seemed to be the best way to unify recipients of mail. That is, every mailbox has its own unque number or identificaiton. If we could create a fixed uniform identifier in each mailbox, we can then create an alert system that could be managed.

TECHNOLOGY INSIGHT

With the automated option off the table, we were left with barcodes and qr codes.

These 2 types of codes had their limitations.

But these are 2 very standard, accepted, and proven options.

Their simplicity made it easy to solve the cost factor, which means we can produce them easily and lets costly than electronics.

The cost factor is crucial as mail centers do not want to spend on items unless there is a tangible result (profit)

Or the cost could be offloaded to the renter instead. would they pay 5 or 10 dollars for a solution that saves them time, money and gas?

Again, it was the barcode or qr code that could be a solution.

LIGHT BULB!!!

We put our brains in gear, reflected upon what we know of the industry and came up with an insightful idea.

Lets take the simplicity and add technology ‘behind’ it.

Categories: Financial, Mail Center, PO Box

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