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To secure and continually grow the value of The
UPS Store franchise for the independent franchise owner by
providing a pro-active, influential and independent voice
and to cause a paradigm shift in the operating business
model of The UPS Store franchise.
To increase store profitability by growing
total store revenues and reducing store operating costs.
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| Analysis of
Data from our Royalty reports indicates that there has been
a shift in our business mix. Revenues from Shipping have
increased dramatically to become the majority of our business.
Not surprising, since our signs say UPS and as far as the
public is concerned UPS = Shipping. |
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| Of all our
profit centers Shipping yields the lowest profit margin.
Why? Because UPS establishes both our shipping costs as
well as what we must sell it for via the CMS system. No
other franchise does this. |
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| UPS has effectively
reduced our profit margins by offering substantial discounts
to the public via the internet. It cost our customers less
to ship on line than in our stores. |
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| UPS has
become our greatest competitor. The Shipping mix is
changing to increased drop-offs, and less in-store
processing. Assuming an average shipping cost of $10,
UPS keeps $8.90 and we get $1.10. In this case UPS keeps
up to 89% of the on-line shipping revenue, while we
receive ONLY 11%. Can you make a profit on $1.10 or 11%?
For larger heavier packages the percentage profit for us
is even less. |
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| UPS's
yield (what they make per package) is achieved at no
cost to them since they fix our cost of shipping as well
as our selling price. On top of that they also levy our
sales through royalties. |
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| Those
stores that remain profitable, due to larger levels of
revenue and that do greater than average sales in
document services or mailbox rentals, would be much more
profitable if UPS put its purchasing power to work on
our behalf instead of using it exclusively for their
benefit and to our detriment. Case in point, MBE forces
us to purchase computers from them at a cost that is
substantially higher than they can be bought on the open
market or dealing with specific vendors directly. |
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| The
present business plan is definitely flawed. It makes no
sense whatsoever, at least from our store's point of
view, to operate under a plan whereby we are in
competition with our own Franchisor, and at a
competitive disadvantage. |
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