Pack and Ship Business Overview

Pack and ship stores provide shipping, packing, and mailing services to both individuals and businesses. These retail locations work as middlemen between customers and shipping companies like UPS, FedEx, and USPS, handling packages for both domestic and international delivery.

When customers visit a pack and ship store, they can drop off pre-packaged items or have their belongings professionally packed for safe transit. Store staff help customers select the right carrier based on cost, speed, and package requirements. These stores often become trusted shipping resources in their neighborhoods, serving both one-time customers and regular business clients.

Many pack and ship stores expand beyond basic shipping to offer additional business support services. These might include document printing, copying, faxing, scanning, private mailbox rentals, and notary services, creating a one-stop shop for various business needs.

The pack and ship industry operates through several common business structures:

• Independent Stores: Locally owned locations that work with multiple shipping carriers, offering flexibility in services and pricing
• Franchise Operations: Stores operating under established brands like The UPS Store or PostNet, following standardized procedures while paying franchise fees
• Carrier-Affiliated Stores: Retail locations with primary ties to one shipping company (like FedEx Office) while still accepting packages from other carriers
• Business Centers: Locations combining shipping with expanded business services like printing, copying, and mailbox rentals for a broader customer base

Each business structure has its advantages, from the independence and flexibility of local stores to the brand recognition and support systems of franchise operations. Your choice depends on your business goals, available capital, and desired level of operational support.

Related: Checklist to Start a Business

How Do Pack and Ship Stores Make Money?

Pack and ship stores generate revenue through multiple income streams related to shipping, packaging, and business services. These retail locations act as intermediaries between customers and shipping carriers, earning money from both the shipping process and related products and services.

Here are the common ways pack and ship stores earn income:

• Shipping Commissions: Pack and ship stores collect carrier shipping fees and receive a percentage as commission from companies like UPS, FedEx, and USPS. This is typically the largest revenue source because every customer needs a carrier to deliver their package, creating a guaranteed transaction with each visit.
• Packaging Materials: Stores sell boxes, envelopes, bubble wrap, tape, and other packing supplies at retail prices. These materials are purchased wholesale and marked up for retail sale, creating a significant profit margin on each item sold.
• Packing Services: Many customers pay for professional packing of their items, especially for fragile, valuable, or unusually shaped objects. Stores charge either hourly rates or flat fees based on the complexity and time required to properly pack items.
• Mailbox Rentals: Monthly or annual fees for private mailbox rentals provide reliable recurring revenue. Customers pay for secure mailboxes with street addresses rather than P.O. box numbers, which many businesses prefer for their professional image.
• Business Services: Additional revenue comes from document services like printing, copying, scanning, faxing, and notary services. These supplementary offerings attract customers who may also need shipping services.
• Freight Services: Stores coordinate larger shipments for business clients, earning commissions from freight companies. These less frequent but higher-value transactions can significantly boost monthly revenue.
• Passport and ID Photos: Many pack and ship stores offer passport photo services as a convenient add-on, requiring minimal equipment investment while providing a steady stream of customers, especially during peak travel seasons.

Industry Statistics

Pack and ship stores belong to the Packing and Crating Services industry under NAICS code 488991. This industry includes businesses that provide packaging and crating for transportation or storage, as well as shipping and mailing services.

Here are some statistics that show the current state of the pack and ship industry:

Pack and Ship Industry Size & Growth: The pack and ship industry generated $2 billion in revenue last year. Over the last 5 years, the industry has experienced an average annual growth rate of 1.6% and is projected to grow at a rate of 1.9% annually through the next five years. This continued growth comes from increased e-commerce shipping demand and expanding business-to-consumer delivery needs as more people shop online and require shipping solutions. (IBISWorld).

Pack and Ship Store Profit Margin: Pack and ship stores operate with average profit margins between 5% and 15% of total revenue. These figures represent earnings before interest and taxes, with variations based on location, services offered, and operational efficiency. Stores that add complementary services like mailbox rentals, notary services, and printing typically achieve higher margins than those focusing solely on shipping.

Costs To Start a Pack and Ship Store

Starting a pack and ship store could range from $75,000 to $250,000 in 2025. The lower end represents a small, independent store with basic services, while the higher range reflects a larger store with more equipment and inventory or a franchise location. These costs cover everything from securing a retail space to purchasing equipment and stocking initial inventory.

Here are some of the main costs to consider when starting a pack and ship store:

Location and Build-Out: Retail space costs include first and last month’s rent plus security deposit, which could range from $5,000 to $20,000 initially. Build-out expenses for counters, shelving, storage areas, and customer service spaces add another $20,000 to $75,000, depending on the size and condition of the space.

Equipment and Technology: This includes point-of-sale systems, computers, shipping scales, label printers, security equipment, and specialized shipping software. These essential tools for daily operations could cost between $15,000 and $50,000, with digital shipping stations being among the more substantial investments.

Initial Inventory: Starting inventory of shipping supplies like boxes, packaging materials, tape, bubble wrap, and shipping forms typically costs $10,000 to $30,000. This inventory also includes retail displays and storage solutions for organizing these materials efficiently.

Franchise Fee: For those choosing a franchise model, initial franchise fees range from $30,000 to $50,000. This fee generally includes training and support, but doesn’t cover other startup expenses. Some lower-cost franchise alternatives and independent store options can significantly reduce the overall investment compared to premium franchise brands.

Permits and Insurance: Business licenses, permits, carrier certifications, and insurance policies are necessary for legal operation. Insurance coverage should include general liability, property insurance, and workers’ compensation if you have employees.

These estimates provide a general idea of startup costs, but actual amounts will vary based on location, store size, service offerings, and whether you choose to open an independent store or a franchise.

Is a Pack and Ship Store a Good Business to Start?

If you’re thinking about opening a pack and ship store, it’s helpful to understand both the advantages and challenges of this business. Let’s take a close look at five important aspects of running a pack and ship store to help you decide if this might be the right business for you.

Durability (Grade C)

• Economic downturns have some impact, but shipping needs will continue
• Digital shipping solutions pose competition risks
• Limited protection from competitors without unique services
• Adding services like printing or a mailbox rental service helps adapt to market changes and add additional income

To enhance durability, successful owners focus on building specialized expertise for packaging unusual or fragile items that customers can’t easily handle themselves. Developing relationships with local businesses for their ongoing shipping needs also creates more stability than relying solely on walk-in customers.

Revenue & Profit Potential (Grade C)

• Profit margins typically range from 5-15%
• Income remains fairly steady with predictable busy seasons
• Business has both fixed costs (rent, equipment) and variable costs (supplies)
• Most stores take 1-3 years to become profitable

Pack and ship stores generate moderate profits and have fairly predictable income throughout the year, with higher volumes during holiday seasons (30-40% of annual revenue for most stores). Many store owners find that freight services for business clients, and charging for services like package tracking, packaging supplies, copying services, notary services, mailbox rentals, etc. adds significant profit with minimal additional overhead.

Execution Complexity (Grade B)

• Starting requires a $50,000-$250,000 investment
• Managing relationships with shipping carriers is straightforward
• Staffing needs are small (2-5 employees) with basic training requirements
• Regulations are simpler than in many other industries

Opening a pack and ship store involves moderate difficulty in setup and operation, and somewhat high startup costs to cover retail space, equipment, and starting inventory. Building relationships with major shipping carriers is necessary but not difficult. The business typically requires just a few employees who need training in shipping procedures and customer service. Regulations mainly involve standard business licenses and following the shipping rules set by carriers.

Available Market (Grade B)

• Industry shows steady growth at 1.9% per year
• Competition levels vary by location
• Customers have ongoing needs for shipping expertise and convenience
• People willingly pay for shipping help and professional packaging

The shipping services market continues to grow steadily at about 1.9% per year, thanks to more online shopping and increased shipping demand. Market research shows that residential customers within a 3-5 mile radius typically form the core customer base, with small businesses providing more consistent revenue. Location choice greatly affects success, with high-visibility spots near homes or businesses performing best.

Maximum Growth Potential (Grade C)

• Opening multiple locations requires a significant investment, but offers growth
• The business model works well across different geographic areas
• Adding related services creates expansion opportunities

Growth possibilities for pack and ship stores are moderate. Single-location stores have natural size limits, but successful owners can open additional locations or possibly franchise their business model. Adding services like business centers, e-commerce fulfillment, or special shipping options like international shipping can create more growth paths. The business transfers well to new locations with similar customer bases.

Overall Grade: C+

Success in this business depends heavily on choosing the right location, offering a variety of services, and running an efficient operation. New owners should plan for the substantial startup costs and set realistic profit expectations. The franchise route provides proven systems but costs more and limits flexibility. Independent stores offer more freedom but require more learning.

A pack and ship store represents a stable business with moderate potential. The business benefits from steady customer demand, multiple income streams, and straightforward operations. The main challenges include digital shipping options, modest profit margins, and more direct services from shipping carriers.

This business works well for people who enjoy customer service and building local business relationships. The best owners bring strong organizational skills, attention to detail, and a customer-first attitude. Before starting, research your local market thoroughly, talk with shipping carriers about partnership options, and create a business plan that includes both core shipping services and additional offerings to maximize your income potential.