Pack and Ship Business Overview
Pack and ship stores provide individuals and businesses with shipping, packing, and mailing services. These retail locations serve as intermediaries between customers and shipping carriers, handling both domestic and international shipments. They offer professional packing services to protect items during transit, maintain relationships with multiple shipping carriers, and often become central shipping hubs in their local areas.
Many stores also function as one-stop shops for business support, offering document services and communication tools alongside their primary shipping operations.
These stores operate under several business models:
- Independent Store: A locally owned and operated location that works with multiple shipping carriers
- Franchise: A store operating under an established brand name, following standardized procedures and paying fees to the franchisor
- Carrier-Affiliated Store: A retail location that primarily partners with one shipping company while accepting other carriers
- Business Center: A store combining shipping services with other business services like printing, copying, and mailbox rentals
Related: Checklist to Start a Business
How Do Pack and Ship Stores Make Money?
Pack and ship stores build their revenue through a combination of shipping fees, material sales, and service charges. When processing shipments, stores earn money in three ways: they collect the carrier’s shipping fee (receiving a percentage as commission), charge handling fees for processing the shipment, and sell packing materials at retail prices.
Additional revenue comes from:
- Business Services: Printing documents, making copies, sending faxes, and scanning files
- Mailbox Rentals: Monthly or annual fees for private mailbox rental with street addresses for customers
- Freight Services: Coordinating larger shipments for business clients and earning commissions from freight companies
- Notary Services: Providing document notarization for a per-signature fee
- Packaging Labor: Charging hourly rates or flat fees to professionally pack items for shipping
Industry Statistics
Pack and ship stores operate in the Document Support Services industry under NAICS code 488991: Packing and Crating. Here are some statistics about this industry.
Pack and Ship Industry Size & Growth: The pack and ship industry generated $2.0 billion in revenue last year. The industry has grown at a rate of 1.6% over the past 5 years. Looking forward, revenue is projected to grow by 1.9% annually through the next five years, driven by increased e-commerce shipping demand and expanding business-to-consumer delivery needs (IBISWorld).
Pack and Ship Store Profit Margin: Pack and ship stores average a profit margin of 5% – 15% of total revenue. This represents earnings before interest and taxes, with variations based on location, services offered, and operating efficiency.
Startup Stories
Costs To Start a Pack and Ship Store
Starting a pack-and-ship store typically costs between $50,000 and $250,000. The lower range represents a small independent store with basic services, while the higher range reflects a larger store with more equipment and inventory.
Here are some of the more expensive items when opening a pack and ship store:
Location and Build-Out: Retail space rental deposits range from $5,000 to $15,000, with monthly rent between $2,000 and $8,000. Build-out costs for counters, shelving, and storage areas can add $20,000 to $75,000.
Equipment and Technology: Point-of-sale systems, computers, scales, printers, and security equipment cost between $15,000 and $40,000. This includes specialized shipping software and equipment for measuring packages.
Initial Inventory: Starting inventory of shipping supplies like boxes, packaging materials, tape, and shipping forms typically costs $10,000 to $30,000. This also includes retail displays and storage solutions.
Franchise Fee: For those choosing a franchise model, initial franchise fees range from $25,000 to $50,000, plus ongoing royalty payments. This often includes training and support but doesn’t cover other startup expenses.
These estimates provide a general idea of startup costs, but actual amounts will vary.