How I Make 500K Per Year From Mini Mail Boxes

So Lisa you're making over $500,000 a year in this mini mailbox business how does it work and how do people get into it how did you get started I love this business model basically this is independent mailbox rental pack and Chip store so think like a UPS store but independent so we're an independent store ship Las Vegas are what I called mine and we service UPS FedEx and the Postal Service the way the business model works is that think of your mailboxes as manyi storage units these are um mailboxes that we have just kind of right in the front of the store and we rent them out um at $20 a month for the smalls 30 a month for the medium 35 a month for the larges so the mailboxes are the steady recurring Revenue that's what keeps your lights on that's what pays your your staff and then the shipping is ancillary and seasonal so we've added a few other Revenue lines as well to that between shipping notary and U-Haul and other items I would imagine how many do you need in each store because once those are filled or occupied I guess you use occup mhm um that's reoccurring exactly it's all reoccurring and so um I started out each store with around 220 boxes and my goal was to fill up those 220 within the first year or two I gave myself up to two years of Runway because it's a small business right so I think what the statistic out there is that you should plan for you know three years to break even or whatever on just a normal small business um so I had kind of just mentally planned for two years um I ended up hitting a break even Point around 18 months um but I have some student mentees who have hit break even in month four so I don't know what I was doing wrong some of them are hit four so all right thanks so so 220 boxes at how much a month on the average so the aggregate average is going to be around $32 because it's the 20 a month and then 30 a month for medium 35 a month for the largest so in one panel so the qu part is is once you get that out of the way you now have everything covered and that's dependent on your rent right so my rent I'm in an urban area in Las Vegas right so my rent is going to be higher for example than um there's a girl Leslie who she owns a store called ship Arizona she's out in Benson Arizona it's a rural area and her rent is like I think less than a thousand bucks a month so her um you know Break Even nut of what she needs to make per month just from mailboxes to cover her rent is going to be lower than mine yeah well what I love about it is so inside of the mailbox business there's passive income and then there's a little bit more active income because I think people could understand like when we have tenants they pay reoccurring based on a lease that's more of a passive income but then the people in the office that are doing all the other stuff that's you know that generates more of an active right so so you have the passive piece which is the reoccurring monthly rent and then you have all the other services that are a little more active right that that's like open from 99 to 6 every day is that how that works exactly so think of it just like a normal retail store where um just like a local UPS Store is usually the concept that people can assimilate the most quickly um so it's just shipping so if someone comes in they say hey I need to ship this item to New York wherever it has to go we can do the label for them um and because we're an independent store we get to be authorized shipper for all the carriers and that's Postal Service GPS and FedEx so we actually can aggregate the best rates for you and then give you the option of which one you want to use so how do they manage your uh operating expenses so like if you're working with UPS or even the Postal Service they have their number right and do you do you negotiate that in a bulk then yeah so that's what's nice with being um an independent store is that we have a corporate rate with them so this is going to be lower than like the normal retail counter rate if you were just like to go into the post office so the the customer really doesn't see a difference no exactly yeah so you've negotiated that profit for the store exactly and and again as an independent store I can set my margins at what I want them to so I can set them at for example a 50% margin and I know that I'm going to be able even if the shipping rate which is dynamic will change right even I think up to last year FedEx still had a covid searge in their in their base shipping rate so even if they have rate changes that'll fluctuate holiday shipping they always all Spike their rates during holidays um we know that we're not it's not going to affect our margin because we make sure we set it in the software we use a software called postal mate and that that um Aggregates all your shipping rates for you it has your corporate rate already embedded in there um based on your shipper ID and then it also has mailbox management so it's really like an all-in-one which is is very very helpful so let's talk about how you got into the mailbox business because that's a very unique and interesting story and it's something that everybody could do yes so um it it all started um I had had a mailbox that I was renting from a local UPS Store in Las Vegas and they would Auto charge my credit card every year for the box and I'd get the receipt and I was like oh I should probably cancel that I'm not really using it that much and then I wouldn't cancel it and I was like what is this business mod I know we all have that credit card that goes kach K I actually did one today I was like oh man yeah like I need to cancel that and then I didn't right so I was like what is this business model and so then I started looking into purchasing a UPS Store franchise it was around like 200 250,000 and I was like okay like maybe maybe that's the route maybe that's the way and I called a friend of mine Greg who owns three UPS stores in San Diego and I was like tell me about this business model and looking at maybe buying a franchise here and he was like okay he was like I like it he's like don't love you know paying the fees in the Corp marketing fees and all that kind of stuff he was like it's a solid business model though because here's how it breaks down the mailboxes are the study recurring Revenue the shipping is ancel and seasonal he said but if you were to call any of my stores right now and say hey I'm a new mailbox customer I want to open a mailbox he's like I don't even have one to give you and I was like what do you mean and he's like I can't even put in more mailboxes because the franchise dictates my floor layout so I was like interesting so he was like if I were you I'd go independent he's like you can then configure it however you want he's like if I were you I'd Slam in a thousand mailboxes into the front of the store and then you have shipping answer and seasonal and I was like that is so interesting so then quickly realized oh my gosh up the street from my house in Summerland is an independent store I'd been going there for years to go drop off my UPS and my um Amazon packages returns eBay stuff um for some reason I thought it was a UPS store but realizing I was like it's called postal Pros it's not a UPS store right so it was an independent store called postal Pros in summerin and I knew the owner Andrew because I was patron of his and so I popped in one day and I said Andrew would you ever want to expand and he was like no I was like okay I was like well I was like I think I'm going to open up one of these uh down at like kind of 215 Flamingo it's far enough away it's not competition for you um I don't know anything about running a retail store like this um I'll pay you $10,000 if you let me follow you around for two weeks I'll capture all your processes and build you a nice book handbook and you know if you'd let me come train in here and he was just like are you serious like you was just like you're so crazy Leisa 10 grand you probably had it in your purse I am Korean you know we carry on cash uh and so and so he was like all right like if you're serious like I'm down I'm down to do this and so literally the next day came uh met him at the store at like quarter to 9 they open up at 9:00 met him like 8:45 and he literally unlocked the front door and to this day that's the first step in our procedure of opening the store is like well number one unlock the front door number two unlock the folding gate like it's just like it's system atically literally everything he did in the store and I made little modifications here and there so for example at his Stores um their counter heights were at a height where if you're Seated on a stool it was it was the right counter height anytime a customer comes in you're standing up to greet them talk to them maybe get their package like you're weighing it you're doing these things so you're standing the whole time so for example in my stores I did my counters that they standing height just little small modifications um that there's no way I could have known it without being in someone's store right and I noticed also from when I went out and visited your stores I was interested in this business model you also had a gate that you could pull across so you could actually close the front part of the store from the back and so people could access their mailboxes I thought that was an interesting thing was that also a modification yes um so with Andrew for example um he also had a folding gate in the store but it was like this fancy drop- down one and when I was starting my stores I looked at that drop- down gate and it was like six grand and I was like that's a lot you know um and so the folding Gates I have in my stores we actually just bought them from Home Depot I think it was like 1,500 bucks um so just you know small modifications where it's like still the same function um but you can either go kind of as highend or lowend as you want again because it's an independent store if it's a franchise then they're going to dictate certain things that you have to have so two weeks go by you give them 10 Grand he obviously benefited not only financially but from the systems that you probably but then you it was almost like he got a free due diligence totally and because I looked at that 10 grand as an investment because initially you know I was looking at spending upwards of 250,000 right so I looked at 10 grand it's like I'm getting away with the steal if this business model is not what I think it is and the only way I'm going to know is if I'm in there working and obviously I was in there working every day so I got to see you know the daily sales that were coming in and they were you know sometimes they were in the hundreds sometimes they were in the thousands and I was just like how is this place that's 1,200 ft with you know two and a half employees cranking out the this kind of Revenue and knowing what their margins are right like because you showed me all on the supply side how much he's paying in boxes how much he's pay you know and the mailboxes he had bought them when they first open the store so there's no um recurring maintenance that's done on those for example just you buy them and you're done so I was like I looked at that 10 grand as if this business model is not what I think it is and I don't want to move forward with it that that's my money that I paid to like investigate it basically and I find it's a it's a bit of a niche when I asked you this question there's a lot of people that want a secondary box or a box because they're moving around or maybe they're just doing business in an area or U you know there's a lot of purposes of having a a mailbox somewhere where everything goes to especially if you're on the move right who's your traditional customer that gets that that reoccurring mailbox um you know it really expanded actually during covid so um I've had my store since 2018 and this business model has proven to be pandemic proof we actually experienced more growth in 2020 more mailbox customers because you had folks who all of a sudden were starting to work from home um so they wanted a a physical address where you know maybe they had porch Pirates or whatever was going on their mail was getting stolen that's a good point so they were like I want a safe secure place that I know my mail's going to get delivered so you guys take inbound too like pack abolutely yeah oh absolutely yeah Mak complete sense yeah so whatever doesn't fit in the Box we keep it in the back in storage and if so if you're living in an apartment complex where there's lots of people and you're not home all the time that they can deliver here and it's safe and secure and you can come get it and and that peace of mind people are happy to pay 20 bucks that makes ton of sense they're happy to pay it um and then we also have customers who are actually just small business owners um we we have a couple you know the landscape company they have a landscape company so they don't have like a corporate office right um they have their stuff that's housed mostly in their garage and so they need a business address where they have clients who send them checks and they send them to our store um we have customers who sell um homebased business so they sell on Etsy and they're creating things on Etsy um again they want to have a mailing business mailing address to fulfill not only like legal side of their business licensing paperwork but they again they also want a safe secure place where they can send their Goods um that they're using their materials that they're using to create the items that they make at home in sellon Etsy um and they don't want it sitting out on their porch that someone could take yeah that makes sense I you know I've done a lot of self storage uh in my career and it was interesting to me because there's a lot of independent Distributors and a lot of independent uh folks that actually come over there and store lots of stuff boxes materials products supplies uh maybe they're working for somebody maybe it's their own business but and then they also have a business address like at a mailbox so they have you know maybe all their boxes and all the stuff gets drop shipped at a self storage but then they have the spot you so it's they're like in two locations one's where the checks go and one's where all the products go right yeah exactly so let's talk about the location so obviously you've now done this a while I do want to talk about you're helping entrepreneurs and you're expanding all over the country I've been watching your your insta Channel and and and and all all the YouTube stuff what is the right location what's the wrong location because there has to be some demographics associated with this I would guess so in my experience again I'm in Vegas I'm in an urban setting so I looked for high density residential so Andrew store postal Pros they do a million bucks Topline out of that store granted has been there 14 years uh which just goes to show like over time this business model keeps getting better and better and better so the 500 Grand is oh I know I'm trying to get there I promise I'm getting there another sales issue we're in your six right now okay that's good um but you know Andrew store for example is anchored by in Albertson's a very busy um shopping center anchored by a very busy grocery store um and then he also got into a location where he he went to Summerland 14 years ago right so Summerland built up around him you know continued to grow around him so I would realized okay I want to also look for places where I'm seeing a lot of construction right maybe it's not a ton of residential at the moment but you're seeing all the construction happening nearby great so um my stores again surrounded by high density residential lots of apartment complexes because again like even our uh store up by Nelis Air Force Base um the apartment complexes around there they do have an issue of their um the apartment building mailbox is getting broken into yeah we've had that happen at our places yeah the cluster boxes yeah yeah they bust one big thing it opens up exactly exactly and especially for folks that are on like a fixed income right and they're waiting for that you know social security check or you know a veterans benefit check um when those cluster boxes get broken into even if nothing's taken it's just it's a mess right like they just leave it a total disarray and mail gets lost so um we have folks you know with with highdensity residential apartment complexes um and so I wasn't necessarily looking for like oh I want to make sure there's not a post office nearby or not a UPS store nearby because what I've learned being in this business is that a post office and a and or a UPS franchise store actually are not direct competition and it's because so first off just taking the post office when's the last time you ever heard anyone Rave about customer service at the post office in a positive way well I always hear going postal and that's not a good thing that's what I've heard I mean the post office look it's I get it it's a government position right it's a government entity run by government employ so no surprise often times you know things get lost or or maybe it's not the best type of service so we have customers actually go out of their way to not go to the post office to come to us instead as an alternative and in addition yes you could go get a PO Box at a local post office I think it's like 14 bucks a month or something uh depending on your city um but your address is a PO Box po boox 123 and the post office will not accept Amazon packages FedEx UPS all those things they releas a storm anyway and like they're probably going to get lost so um if you need a mailbox with a street address number one and then number two also want just more robust service because you're like look I'm going to be sending Amazon packages I'm going to be sending other things there more than just regular letter mail going into the box that's why people come to us as well on the UPS side so the UPS franchise stores yes they have mailboxes you can rent them we have had um mail box customers leave The UPS Store when their exploration data is up and come switch over to us because we don't nickel and dime them so what they were experiencing at the UPS store that they were at was that they had a monthly rate maybe it was 18 bucks a month or 20 bucks a month but then they were getting hit with storage fees they were getting hit with um mail scan fees they were getting hit like they would call and the store would be busy so they were like hey can you check my mail to save me a trip and they just got bad service around that so they're just like I don't even want to deal with it anymore um we also realized that the UPS store they can give you rates for UPS they can also give you rates for the postal service but what we've learned is that the UPS Store will Jack up their Postal Service rate so high that it makes the UPS rate more appealing to the customer of course so with us I me we keep it All Uniform right so you can see and usually the post office is usually the most economical option um for our customers and that's all laid out right there so you can pick and choose if you really do need it today and and it's important we don't recommend the post office because they don't guarantee their dates whereas like FedEx UPS will guarantee it um so just little nuances like that where folks appreciate the flexibility um that we have in relation to the variety of carriers um so that's why it's crazy to say but post office and UPS franchise stores are actually not direct competition for independent store another independent store would be during competition that's interesting yeah so there uh one's government and wants two corporate exactly right ESS now like always the entrepreneur gets to come in and and do whatever they want and deliver what the customer needs exactly you find the product Market fit right and it'll be a little bit different in your area too of of what services might resonate more but that's the beauty of having an independent store is that you can try these different lines of Revenue and if it works great and if it doesn't you just don't do it that makes a lot of sense so um so the normal customer then because I would imag imagine they throw their crap at the car and then they go to the grocery store and while they're there they walk two stores down or three stores down and they go they kind of do everything dry cleaning and you know all the little things that they would do right is that essentially uh your your uh your typical customer yeah folks are just out running their errand right um so one of our stores the Ford Apache store um it is next to a very busy nail salon and so well folks are coming in for their nail appointment and they'll come drop something off real quick before um but it's just located in in enough of an easy place where there's like also a gas station nearby too so again folks are out kind of running their errands and they'll pop in drop off their stuff so for people that are listening what's the math behind this you know how does it work because if somebody's let's say a a lawyer and they want to do this uh you know what what's what are the expenses and and and when when can they expect to get a return so the main thing that you want to consider first is really just what are your fixed costs and in this business it's really just your rent and payroll um because for example on the shipping you don't pay out the shipping until the label is actually created and you have the customer right there in front of you and they're paying for the label oh wow so you're not like holding inventory on that perhaps um stamps you do have to pre- buby stamps and so we have stamp booklets you know available for purchase so we do pre- BU those but that's like a couple hundred bucks worth of stamp inventory otherwise you're your true just kind of fixed costs of again calculating like how much do I need to make uh to cover my expens is it's really your rent and your payroll um these stores that's the beauty of the independent store um you can operate it with as little as one person so if you're an owner operator you could technically just operate the store yourself um and there was a period of time where I did that I was operating one store and Sarah my operational partner was operating the other store the other store because we decided to open up two stores at the same time um which is unplanned but I'm glad we did it um but they can be run with as small as little as one person per store what's size of of the store like is 1,000 feet 2,000 ft yeah um so I mean Andre store is like 1,200 feet okay mine around between 1400 and 1800 feet um I have student mentees out there they have huge spaces some of them I was like over 2,000 feet but because they're also putting in other things in the store they have a whole retail site as well so it it's really just dependent on you know kind of what space you find and what could work for you um I don't know that I'd go less than 1,000 ft because you want the space for mailboxes you want the space for shipping counter you also want a little bit of space for storage in the back um you don't need a ton of storage space because even if you have hundreds of mailbox customers who are all receiving packages at different times in general folks are coming in to pick up their package so it's not that you're holding it for an extended period of time there's actually a pretty high turnover on the package holding so you don't need a ton of space for it but you do need some storage space but if if you've got say 220 boxes at you know 30 bucks uh you know you're looking at uh what about 880 70 80 $90,000 a year right and so I mean our fixed costs you know between rent and payroll we're pushing about 75,000 yeah so so the the the box that's on two stores yeah but the the mail oh wow so the the mailboxes more than cover your rent bu your payroll so then all the other things are kind of GRA it's gravy on top exactly and that's how I'd really designed kind of like even the marketing in the beginning we really pushed hard for mailbox customers um because I was that was was my goal I was like I want to fill up mailboxes enough where like at least I know like the rent could be paid right I know we're going to make five grand a month off mailboxes how do we get there how do we get there uh and then if you wanted to run it yourself for a year or two you wouldn't have that payroll exactly I mean you'd want to pay yourself but that would be one less thing and then really the only thing you would have would be the rent well and let's face it a big chunk of that is your payroll taxes and everything else you know what I mean so I'm talking about like all in payroll costs you know but if you're paying yourself um as an owner operator your payroll cost is atically reduced right right and and of course we started this video by saying that eventually you can get this thing up to half a million dollar a year even up to a million dollars a year depending on the location yeah Andrew does a million bucks out of Top Line This is gross you know but I mean a million out of 1,200 feet with you know three staff members and it's it's a nice lifestyle business that's a super profitable and does he work it he pops in yeah he pops in mhm but it's like it's a nice lifestyle business and but unlike a restaurant or something cuz you know you and I have friends at all restaurants you know those can go really late they can happen on weekends people don't call in you know there's um the mailbox business is kind of open at what 9 to 6 I guess yeah so we have our stores open Monday through Saturday 9: to 6 um again as an independent store you can set your hours there's a lot of independent stores out there that that'll be open let's say Monday through Friday 9 to 5 or 9 to6 and they'll be open Saturday 10 to 3 for example you you really set it based on like what your community needs um and then we're closed Sundays we're closed major holidays no one is working past 6 pm. and no customers are calling you after 6 p.m. that's nice no one has your cell phone number all businesses are like that yeah exactly exactly you can literally shut it down as if you were a W2 yes like you literally lock up you lock up the store and there's no like work to take home for the business right as a business owner sure like I'm there's always something you could do but as far as like operations of the store there's no like work to do at home before the next day so now let's talk about Limitless 2024 you ready to roll yeah of course first of all it was your idea on the title which is pageants to profit pageants to profit so I don't know how you say no to this but uh Lisa said I've going to get all a bunch of I'm going to get a bunch of my pageant girls Miss Texas Miss Tennessee yeah Mada and who else um oh Diane she's a former Mrs world yeah okay no big deal we got that well I'm excited it's August 29th 30th and 31st in in Dallas Texas uh www. Limitless expo.com so we're looking forward to seeing you guys there for that how do people reach you like what's the best way for them to reach you for yeah very active on social media so you know Instagram um Lisa song Sutton my website lisa.com

Channel: Ken McElroy

Views: 68,292

Keywords: Entrepreneurship, Investing, Personal Development, Get Wealthy, Earn Wealth, Ken McElroy, Entrepreneur, Success, Business, Self-Help, Coaching, Real Estate, Real Estate Entrepreneur, Real Estate Investing, Lifestyle Business, Ken McElroy Housing, Ken McElroy Real Estate, MC Companies, MC Companies Investments, Real Estate Investment, Investing in real estate

Id: C_cSAC6vjF0

Length: 25min 30sec (1530 seconds)

Published: Thu May 09 2024