How We Make $120k a year from Mini-Mailboxes?

huh she started a business with twenty two thousand dollars and turned it into a business that'll do hundreds of thousands of dollars a year it's called mini mailboxes how about investing twenty two thousand dollars and making somewhere between 120 000 to 260 000 a year on a mini mailbox store so essentially what this is is it's like you know ups where you go to ship your boxes and all of that jazz except this one's independently owned it's owned by my friend lisa and she's gonna break down for us exactly what she did to start one of these to buy one of these to scale them up and cash flow on a business that somebody else runs for her so let's go check it out [Music] i wanted to cover this story because my friend lisa basically told me that she was starting a package ship center which is what we're in right now she was doing it with like 22 500 bucks and the way that she break down broke down the startup costs i thought were fascinating so this business isn't one that you had to have millions of dollars to start or hundreds of thousands of dollars to start you could start delivering in your community you could provide a service and you could do it with tens of thousands of dollars so break down like what are your startup costs for this type of business that's right so when you're thinking about a business model right i mean restaurants for example hundreds of thousands of dollars of ti is going to be required even if you go into a second generation space our startup costs were really really low i spent 62 000 on two stores to get everything open and running and that included buying banks of mailboxes included all of the material and labor to build out these counters and they called them custom counters because they were just built our specs they're not gucci or anything and you needed some paint uh we redid the flooring in this store the other store we did not redo the flooring and ten thousand dollars of that startup number went to me paying somebody so that i could learn this business [Music] the biggest way that you can screw this up is by not knowing what you're doing right it's like spending too much money in bad areas it's you know not having the right location it's not having the the right software all of these little things can add up to a business failing pretty quickly and you're like i want to decrease my risk on how this business could actually fail how could i do it and you came up with a plan that that was brilliant the first time i ever met lisa she told me this plan and i was like you're a genius so i loved the idea of the business model these mailboxes being mini storage units being this steady form of recurring revenue that was low maintenance and low overhead but i don't know anything about running a shipping store i've never worked in a ups retail store or anything like that so i went up the street to my local independent pack and ship mailbox rental store up the street from my house where i'd been a patron for years and i went to their owner there and i said hey i've got a business proposition for you i'm going to open up one of these down at 215 in flamingo so it's far enough away that it's not competition for you location wise but i don't know anything about running one of these stores i will pay you ten thousand dollars if you let me follow you around for two weeks and i'll capture all of your processes and make you a nice little handbook and and put it all together and he was just like are you serious and i was like yes and he agreed and so the next day i showed him at his store at 8 45 in the morning they opened the doors at nine he unlocked the front door and then he unlocked a folding gate so i said oh i just started writing out something i need a folding gate i copied everything that he had in the store down to the software on his computer what type of postal software do they use type what operating system do they have what type of formatting do they use for their mailbox agreements i copied everything and then turned that into sops and procedures and then obviously we've modified as we opened our stores and and got going but that was one of the best things i could have done because it was an investment in that business model for me so i could i interned there literally for two weeks i was like a new hire i was like working the counter work in the register if i didn't like it or if i didn't think it was going to be a viable business model for me that 10 000 would have been my investment into that endeavor and i could have walked after those two weeks of of being in the store and working there and say you know what this isn't what i thought it was going to be not going to be for me and i would have walked i would have been totally happy about that so that was my way to to learn about the business and what i thought was a very mitigated fashion and it's turned into a business that we still have to this day i love it all right so my favorite story is obviously like i'm dressed like this lisa's in 37-inch stilettos always it's like i can't even wear those things to a party um but when she showed me what she started to do to build out this business she was literally she had like power tools and wood things and she was like putting this all together and i was like i don't buy it um but but one thing that i thought was really smart is like for some of the startup costs you're like these are custom counters you know right but you had friend of yours basically build the counter so like saved yourself i don't know how much were they gonna charge you for that the contractor was gonna charge me 8 000 for what he called custom counters and that just means we took the length of the wall and measured it and i said i want two counters that are going to split that distance with enough room in the middle for us to get packages through and i was at home complaining about it and my boyfriend at the time that i was with he looked at it and he was like i could build those and i was like okay thanks for your support i was like no seriously it's a big problem i'm pissed you know and and lo and behold he did he went to lowe's and bought 500 worth of lumber and built it and literally these are the same counters that we have in the store and it's the same blueprints that we used for the next store it's the same blueprints we'll use for the subsequent stores you don't need a fancy contractor for this stuff these are not attached to the wall so it's like furniture when you think about putting together some of these sort of boring businesses that have like a limited upside you know this location probably cannot be a five million dollar location unless you're selling some other mailbox services and so um so i think you know one of the keys is keeping it tight on your costs i think that's one hack it's definitely you know if you think about your biggest uh costs try to think about if this were easy and cheaper how could i do it for the actual mailboxes you did something else because uh you told me the cost of mailboxes and then you told me how you got them cheaper what was that so you can buy brand new mailboxes direct from the manufacturer and they cost about sixty eight hundred dollars brand new we were able to find on craigslist uh used boxes it's the exact same manufacturer a few of them were missing the second set of keys there were a few broken doors that's all easily replaceable you can actually order replacement doors and replacement locks from amazon of all places and it costs me six dollars and fifty cents per lock to order new locks you basically saved yourself tens of thousands of dollars and you've done that a few times kind of looking for these just in like i call it our immigrant hustle you know it's just like things our parents would never pay full price for we don't either um what other hacks did you see to do it a little bit more like you know cost effectively so you could serve a you know give give a better service at a cheaper price and also open a few of these at the same time anything else just keeping our costs low to your point so even if you look at like the materials that we use um for these so it's literally two by four right and then this like tile part that's on these are sticky um like sticky tiles yeah so instead of looking for a one-piece countertop right that was thousands of dollars we literally buy we did the whole store with four boxes of these like sticky sticker tiles yeah and they serve its purpose and it's been durable and these are the same ones we've had on for four years love that story time all right guys this is kind of special because i just sold a website for 8k that i bought for about 100 bucks it was called grow getters a newsletter that talked about marketing growth i did it just for fun with two friends and it made me realize that i wanted to tell more people that you could start with small deals you could start with large deals but you can definitely start with online deals so i partnered with this company flippa thanks guys about where to buy online businesses it's my favorite site to buy any sort of online business period full stop that's why i'm trying to invest in them so maybe you guys can check this out so that i could get part of this uh series that'd be awesome thanks blake ceo because after all we know that 94 of startups fail that's why i like to buy them instead of build them and this is true on flipa2 for online businesses you can get loans or use seller financing although you got to put down some cash you can have profits on day one of owning the business you can use the cash flow of the business to fund your next brilliant idea but instead of paying for an idea you buy it first so here's the link go check them out there's 500 000 businesses that have been listed on flippa they've done billions of dollars in transactions cody you're forgetting that flipper is also the best place to sell an online business they even have a matching algorithm to get your business in front of the people most likely to buy so anyone out there looking to sell or even just find out what their business is worth check out flippa's free valuation tool here anyway back to you on stage cody so the cool thing about this space is that the postal industry is growing by like five to eight percent per year because amazon and our online shopping addiction at the same time if it's a in a recessionary environment like it is right now or an inflationary environment like it is right now you can raise your prices to match inflation which helps keep your business in order while the rest of the world might not have that kind of price and elasticity the other reason i think mailboxes are really interesting is like the size of the store how big is this store this is 1400 square feet so i love looking at how much money can i earn out of a smaller square footage the larger office space that you had you could technically i guess put more people in there but they were still like a price per square foot cost that's associated with that right how much output can you get price per square foot i mean this is 1400 square feet our store up north is 1200 square feet if you're in that sweet spot of under 2 000 square feet your rent is still very reasonable your electricity costs all those things that come along with being a business owner your cost monthly fixed costs are going to be relatively low so what are the tricks for like the lease and this location i mean you're an expert on real estate you own a real estate company which we'll hit on later um how do you make sure that is a good property before you sign a lease to do a build-out cost that's pretty inexpensive i imagine your highest cost is this so one of the things i like to look for and we did that with this location is minimal tenant improvements that are going to be required there's not a lot that goes into the actual store layout itself anyway so we don't want a lot of obstacles in here had this store been full of different walls and different rooms and offices and stuff that would have raised our cost in addition we also asked the landlord to contribute to our ti cost so that way we decide to sign a longer lease instead of sign a three-year with no contribution we signed a five-year with a tenant improvement contribution from the landlord what else do you want in a location like how close should the closest one be how many cars do you have like a car count that you need to have go back do you want like what kind of demographics do you want how does that shake down so there's a lot of different aspects depending on the location we're in like quasi suburb so with this location in particular this street that we're on is a very very busy street but we're surrounded by residential so while this location in particular is not anchored by a grocery store for example there's still a ton of drive-by traffic and we are literally surrounded 360 degree by residential and when we moved in the apartments that are just across the street by the gas station over here were in the process of being constructed so we knew that there was going to be a large influx of renters that were living there who wanted access to a mailbox who wanted access to be able to pick up their packages if the office isn't open that kind of thing so it would be good when you're you know putting this all together and you're talking to realtors like how do you know what questions to ask your realtor because like for a person who's maybe never gotten a lease before i imagine it's actually really important that they find the right you the right realtor that could actually run this search for them or do most or do you recommend that they do it by themselves work with a professional commercial real estate agent if you are in business and you're looking for a location for your business you need to be working with a commercial realtor not a residential realtor who can also sell you a home to live in two totally different animals even though they're both real estate number two the other thing to remember when you're working with a commercial real estate advisor it doesn't cost you anything as the business owner as the tenant they get paid by the landlord they get paid by the building owner so it doesn't cost you anything and yet they have a fiduciary duty to look out for your best interest and protect you [Music] like you got a lot of stuff back here how like what stuff does a business person need to buy when they first start this out and also we have a whole blog post on this if you want to see it because she's going to pop these up all over the place i keep telling her that i want to invest in one with her but you know she's a little minx and she doesn't want my twelve dollars she needs to open the next one but uh so like what's this what's happening here what's in here how do you know how much to buy yes so when you're first starting out just literally think of the store right you're opening a mailbox rental pack and ship store so guess what you need mailboxes and you need stuff for pack and ship right so you can start with one computer as like your point-of-sale system right you need some counters you need a scale you need the mailboxes of course you need boxes um and even this like again a custom box holder right all we did was i took the uh box sizes that andrew uses the most that was the guy that i paid the ten thousand dollars for the um just consulting basically and i ordered bundles of those bundles come in 10. i ordered a couple bundles of those and then i had this built again using really cheap wood right this is not like fancy-schmancy stuff you don't have to have this you could do this on a storage rack and like lady is flat and and that would work too i just like to have things a little more organized you know what else you need that's really important you need a mascot oh [Music] um you do a lot of stuff for the community um and so one of the reasons you do stuff for the community is because you're a good human you know you were miss nevada you also ran for congress you care a lot about your community but also because um you know it brings in awareness of people what else do you do besides have an adorably you know hot dog like dog in the uh in the company well you know one of the main reasons why people come to our store instead of going to a ups retail store or a fedex franchise store is because we're a mom and pop we're part of the community we're a small business right we're a local small business that's independently owned by your neighbor and people like that and so we tried our best to do everything we can within the community so we have a book exchange table that we utilize um especially up at our other location there's actually um no nearby public library at that location and so our book exchange table up there is actually quite popular and i really appreciate that that's something that we can provide to the community that costs us nothing right and yet it's a value add [Music] [Applause] we utilize a software called postal mate and it's part of our pos system but it's also part of the shipping system as well this is that we found the easiest most succinct way um and what the company with the company that we use the software from they actually have a customer service number as well that we can always call if any issues pop up this keeps track of all of our mailbox holders so if you want to open a new one if you want to renew an existing one if you need to find one let's say someone comes in and they forgot their key and their mailbox 88 right so we can just type that in pull their information up right away um and be able to service them when it comes to the shipping side you click shipping you know we type in cody sanchez right and we add her into the system and then we start clicking through to ask the next set of questions of where is she shipping um how far does it go where does he get there that kind of thing it's all housed into one system on our computers so that way it's very easy to track and then you also have all of your reports embedded within this system as well so at any time we can look up register activity we can look up sales volume we can find packages for customers if they've lost their receipt that had the tracking number on it we can look up all of that within the system it's all housed in one so you can buy the mailboxes in different size combinations what we went with was small medium and large so these are the smalls these are the mediums and these are the largest down here and from pricing we do 20 a month on the smalls 30 a month for the medium 35 a month for the larges and we do different tiered pricing so we require a three month minimum on any size but then after that you can go month to month if you'd like if you sign up and prepay for six months we give you one month free if you sign up and prepay for 12 months we give you two months free so on a small that brings the cost down to about 17 and 44 cents a month i believe if you did either the six months or 12 months with those additional free months we don't charge anything extra to hold packages in the back obviously there's not all mail or packages that can fit in a small for example and we'll hold it in the back for no charge which is different than the big franchise guys who will charge sometimes after seven days or they have different models for that we don't nickel and dime our customers and again that's part of the appeal of being an independent mom and pop shop you originally were looking at ups franchises and why you chose this one because basically half the game is these things it's not always the pack and the real idea is something about these is that true yes so with the ups franchise stores i looked into just purchasing into a franchise and i spoke to a friend who has several ups franchise stores he has three of them and i asked him i said if you could go back in time would you have gone franchise or independent and he said well there are perks with franchise he said in my contract i'm contractually limited in the amount of mailboxes i can have in my store because per franchise it has to be configured in a certain way the store layout has to be configured in a certain way so we said if i were you i would go independent and i would slam in a thousand mailboxes into the store and configure it in such a way that the emphasis is on mailboxes and then you have shipping in the back that's ancillary and seasonal the thing about these small businesses is i think you start to get these rhythms or like repetition that you start to recognize oh wait that's an opportunity this isn't really a pack and ship business this is a miniature real estate business and if i can get you know people in here to do pack and ship but they leave also with a mailbox then i have reoccurring monthly revenue with basically zero marginal cost because have you seen the size of these things yeah and it's like a self-storage business but with mailbox money that part i think is fascinating with even less risk than the self storage right with the self storage even if you have you know it's not that people can really ruin them but if they leave all their stuff in there right and then you wait for 30 days for the sheriff to come and do whatever you know procedures are required nothing happens with these right if your credit card goes bad or you ghost us on your monthly 20 a month we give we give you 30 days the other big guys don't again i think maybe seven we give you 30 days to come clean and like pay for your month and you get your mail otherwise we return everything to sender after that and then we change the lock and we slam in a new mailbox customer it's so low maintenance and so low overhead and yet it is kind of like a miniature real estate play [Music] you run like 37 businesses i doubt you have time to be here every single day so you need an operator to run the business for you how did you find this person the story is pretty wild so sarah is my partner and our general manager in this endeavor and she actually has a teaching background you know she didn't work in a pack and ship she didn't work for ups or anything like that prior but i approached her about it we were just friends good friends and i approached her with this idea that i wanted to start these stores and at the time she was actually working as a cocktail waitress on the strip um because you make more money working as a cocktail waitress than as a teacher that's the reality of the world these days and i said i want to start these stores i'd love to partner with you on this as an operator it i know it doesn't sound sexy you know mailboxes and pack and ship and stuff but i promise there's a larger vision behind this and it's going to be one of those endeavors where we're open monday through saturday nine to six and there's not work to take home right your phone's not gonna be ringing after six o'clock because someone didn't get something or whatever it is this is a kind of a lower maintenance endeavor yeah what i love about this is she's got this process where basically she hires a bunch of friends um to be her operators and businesses like sin city cupcakes which there's some over there in businesses like your partner that is in uh angle volckers and the thing i like about that is it's sort of like the devil you know versus the one you don't we all have our things i come with plenty of them as a partner to people but you have you kind of have insight into your friends and so as long as you structure this stuff right it works out now one of the reasons i think it works for you is because you used to be an attorney and so you understand a lot about structures and terms and how to put stuff together how do you put together contracts with operators where it's a win-win for both of you but you protect yourself as the you know money guy who would have a lot more to lose up front sure so first things first you have your operating agreement and that's basically just a fancy word for the rule book of the company it says who's in charge it says how you get paid it says what happens if you don't want to work together anymore it lays out roles responsibilities it's a really really important document and surprisingly there's a lot of small business owners that don't have an operating agreement for their entity or they have some generic ones they downloaded online and they never customized it or they just don't have one at all and the only time it comes up is when all of a sudden there's an issue a conflict and an attorney's asking where's your operating agreement so have one up front and have that conversation with your operator right away right and know also as well that your operating agreement can change over time it can be modified if parties agree that's no problem so it's not totally set in stone from day one because the business is going to flex and change as your partnership flexes and changes in relation to getting your partner incentivized right when you have an operating partner that has a different set of rules and responsibilities than you do you want to make sure that they're incentivized to grow with the company and so what we did was a tiered model for me i came in and i footed the bill on the financial needs of the company and i committed to continuing to provide the financial needs of the company for a set period of time because we have to test test it see how it goes right but when it comes to the operating side i built in tiers of length of time as well as revenue that's hit so that her equity could grow as the company grew as well yeah it's so smart it's all about incentive alignment you don't realize that humans are like pavlov's dogs we basically you know we do the things that we have been taught and that are aligned with our best interest our self-interest and it's not like a negative thing it's just the way the world works and so if you realize that and put it into documents you can start with the divorce in mind and it not be emotional whereas if you do that later on it always gets emotional i dig that so you can open a pack and but then how do you get people in here you've had some fun ways that you guys went about the community letting people know some of it has to do with this sign but what are the ways that you get people to come into ship yeah so when we first opened up our doors we basically um welcomed ourselves to the neighborhood and we put together cake bites from my other business from bakery business and we put together little cellophane bags of cake bites and we printed out these little stickers that said hi we're shipped las vegas you know we'd love for you to pop in and say hi to us and we went around to all the businesses that are around here and we just walked in with flyers business cards and little treats for them and then you put a bunch of these in smart places too you put waving sort of i don't know what you call giant flags giant flags out front you obviously have branding on this you have signage like this that goes sort of at the corners or whatever sometimes i think people overestimate how much hardcore online marketing you have to do for boring businesses and they don't realize a lot of it is just getting the signs right and it's just people driving by right or walking by this nail salon that we're right next door to gets a ton of foot traffic they all park over here and they have to walk past our sign every day and so we've had so many people come in to say oh i didn't know you guys were here and they come drop off their ups package or whatever it is especially in the beginning we didn't spend any money on like ads um now we run google ads for mailboxes and for notary but in the beginning when there's no budget because you've spent all your money on your tenant improvements um we literally just took like four by six versions of this we made little flyers and there's a walmart across the street and we were the annoying people that put the flyers in your car window we went and did that and then again we took cake bites and flyers and went around to all there's so many businesses that are right by here and we went in and literally welcomed ourselves to the neighborhood i love that did you do it in seven inch heels yes and a dress i wanted to make as many friends as possible so good we're here to get ship done [Laughter] and make some money doing it all right and that's a wrap

Channel: Codie Sanchez

Views: 694,282

Keywords: codie sanchez, mailbox, mini mailbox, contrarian thinking

Id: nbK-VV-inj8

Length: 26min 19sec (1579 seconds)

Published: Thu Jul 21 2022