Eric was looking at a similar store to this, wondering if he should buy it and jump in. Can he be successful? What advice would I give to someone trying to get into this particular retail? I would never advise someone to start a pack and ship store from scratch. I am not sure that a ongoing concern is much better. Shipping has shifted away from retail. People can create their own shipping labels. They have access through the internet and a printer at home. In other words there is not an opportunity for growth. Can a retail pack and ship be successful? Yes. Can a retail pack and ship grow? Yes. Let’s look at my numbers. I don’t like looking at months so I am going to look at This year to date (February 22)

That looks like pretty good growth. I am not going to go into the details of the numbers. I am going to say that revenue is up. I want to break it down by category.

Again not digging into the details because that is a rabbit hole and these are the best numbers I have. Shipping is up which is good because it is about 40% of our sales. Gifts are nearly double but they only make up about 10% of our sales. Uhaul is up and even though it is 10% of our sales they are 30% of our gross profit. Mailboxes are critical. They are up about 300% from previous years, but down from last year. Well the reason it is down is because we raised prices last year and we gave everyone a chance to pay at the old rate. So a lot of customers paid for a full year.

I have tried a lot of things, but looking back this is what has worked.

First of all it was easy to increase the Uhaul commissions. It was the first question I asked our Uhaul rep. It is pretty simple. You can’t rent trucks if you do not have them. When I went to sign the lease for the store they had mentioned that they had agreed that the store would have 4 Uhaul trucks. I went back to my lease and there was nothing in the lease about the Uhual trucks. I immediately told the Uhual rep to send me more trucks. I have has as many as 30. Today I have 17. I won’t going in to details about how Uhaul works in this post. I will say that I collected $35K from Uhaul last year. That is 100% profit. There is no cost. If someone steals a Uhaul it is not my problem. I have zero risk. That was an easy win that continues to pay off.

Second thing I did was change how we did gifts. I never planned on being a gift store, although I now find that appealing. My first thought was just gut the store of all the gifts. Then I saw that there was some money to be made. Well if we were going to do gifts we were going to do nice gifts, gifts that made the store look nice. The gifts is another post but let me say that the store looks a lot better and I attribute our gain in shipping to how the store looks. In addition the sales of gifts is now 300% of what it used to be. In terms of cash flow though it is killer. We sold $27,000 worth of gifts making about $13,000. But the fact is that we spent $27,000 in gifts so in terms of cash flow we netted to zero. Yes we have inventory that can turn into cash, but until it does (if ever) it sits there looking pretty, helping us sell more shipping. Again another post for another time.

Third thing I did that attribute to our small success is the change in employees and their attitude. I went and visited a very successful Postal Annex franchise in Portland Oregon. The most important piece of information that I got from him was how important the right employee was. Going back to the belief that word of mouth marketing is the most important then the employees and how they interact with customers is critical. It is better to have an employee that makes mistakes costing me money yet treats customers right than to have an employee that never makes mistakes but makes customers uncomfortable. Brian in Portland said that he used to think that highering college students who were smart and relatively cheap was a smart business move. He now believes that he would rather pay more for an employee who was vested in the success of the business. So someone who wants the job, not someone who will take the job while they look for something better. And pay them so they will want to stay. I think we finally have someone who fits that bill, Christina. I have more to say about employees too. When I first got here they had 3 fulltime employees. I eventually cut all but 1 of them. I then tried a couple of different new employees as we wanted vacations, including Christina during Christmas and the January gift show. The remaining employee is good and detailed and valuable, but she is not the best with customers, which is more important to me. Kim and I are often trying to defend the employee we like the most. We will stay with the two we have for now.

Those are the things that I did that worked. I have done a lot that has NOT worked. That is for another post.