UPS Store Margin Question

Discussion in 'UPS Discussions' started by Dnceaccess1, Apr 25, 2015.

  1. Dnceaccess1

    Dnceaccess1 New Member

    Hope this is the right forum to ask this question and I can find someone to answer. I am flirting with the idea of owning a UPS or FedEx store, and had a conversation with a current owner. I've read a not of online bolgs that seem to be saying that they don't make money. However, I spoke with an "Authorized UPS Shipper" this week and he mentioned that UPS and FedEx give him as much as 50% discount on their shipping. That means for a next day service that might cost the customer $100, he gets to give UPS or FedEx only $50 (assuming a 50% discount). I was confused because many of the complaints I see online is that many of the UPS stores were struggling or going out of business because they were not making money from shipping. And this authorized shipper is saying that he gets that huge discount. Does anyone know if this is true...that these guys are getting that much of a discount? I am confused...please help.
     
  2. upschuck

    upschuck Avatar bet gone wrong

    From what I understand, they would get a 30-40% discount, but then they also have AAA, AARP, and UPS employee discounts that cut into that margin. They make most of their money from packaging, tape, and other services, rather than the shipping charges. Also, the farther they are from a UPS Customer Counter, the more they seem to charge, which may put the margin up that high.
     
  3. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    They make their money on prepaid drop offs, printing and talking customers in to paying for additional services that they really don't need.
     
  4. Baba gounj

    Baba gounj pensioner

    You would be better off on opening a full service parcel shop not associated with either shipper .
    The Mail Boxes Etc ( later bought out & renamed The UPS Store ) stores were money makers . They had the choice of which shipper to use thus increasing their range of services .
    That is how to make money , not to be tied down to using only one shipper .
    The concept can still work , the highest grossing MBE store was located near a major university and they had multiple pick-ups daily .
     
  5. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Our local MBE store prefers FedEx over us.
     
  6. trickpony1

    trickpony1 Well-Known Member

    Do you make that pick up?
     
  7. Jlemansk

    Jlemansk Active Member

    I would never own one of those stores, unless you like being broke. UPS stores have turned into designated drop of centers. Other than offering mail boxes, and a place to drop off ARS packages, they serve no purpose.
     
  8. They may get a 50% discount but I'm sure their overhead is pretty high. Retail isn't cheap.

    Aren't FedEx office stores all corporate owned?
     
  9. By The Book

    By The Book Well-Known Member

    Want fries with that?
     
  10. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Our local UPS Store and the one in Lake Placid (NY) make a killing.

    Shipping is but a small portion of their business. They make their money by upselling (adding services that the shipper doesn't really need), renting mail boxes and printing.
     
  11. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    FedEx Office stores (formerly Kinko's) are corporate owned.
     
  12. ISC

    ISC New Member

    Don't do it. Sure, you get 40% off all the shipping you do but The UPS Store corporate will squeeze every penny they can out of you. You won't be making much. Maybe $30K a year unless your store is downtown or something.

    "Authorized UPS Shipper"? Were you inside Staples or something? Their shipping corner doesn't have nearly as much overhead as a UPS Store does.
     
  13. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    $30K/year? Maybe in the middle of nowhere but the two UPS Stores locally net much more than $30K/year.

    The owner of the one that I pickup from has two locations----both are close to the Canadian border and rely heavily on Canadian traffic. During this past Peak it was nothing to pickup 200-300 packages per day.

    My UPS Store makes their money from printing, mailbox rental and "upsells" on shipping. Prepaid dropoffs are the easiest thing they do----$1 to scan a package and add it to the outgoing pile----but they are often the biggest pain in the butt due to the poor condition of many of the packages left there. I have lost count of how many prepaids I have refused to pick up for that very reason.
     
  14. ISC

    ISC New Member

    I don't know how much the store nets but the owner's take home pay is around $30K, and it's definitely not in the middle of nowhere. I think it is a slower store though.
     
  15. JackStraw

    JackStraw Active Member

    Location,Location,Location.
     
  16. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    My store has this one Canadian customer who ships out flat screen TV's in handmade plywood and 2"x2" containers. They all go out NDA and are each insured for $1,100. He spends $500 to ship out each one. I picked up 3 on Friday----$1,500 in shipping plus $3,000 total in additional insurance. They are already packed and ready to go----all the clerk does is process the shipment and then help me load them on to the pkg car.

    They also print the flyers for our local race track. 4,000 or so each week during the season. All they do is place the original on the copier and make sure there is enough paper----the copier does the rest. They then collect the flyers and put them in to a box to be picked up later that night.

    They love to push their premium services and will often get a customer to ship something NDA that will get there the next day by ground.

    They must be doing something right as there is always a line when I go there to make my pickup.
     
  17. upssouth

    upssouth Member

    Ups stores in general do not make money. I worked at one when I was 16..it was me and worked there for 6 years until moving into ups. They keep less than 50% of the revenue from shipping a package and on top of that pay royalties every month for everything they sell I think it's about 15%.
     
  18. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Most companies would drool over a 15% net profit margin.
     
  19. By The Book

    By The Book Well-Known Member

    Plain ol good customer service.
     
  20. By The Book

    By The Book Well-Known Member

    I wonder what percent of drivers have thought about running a UPS store. Guilty