Package Deal (UPS Store franchisees suing UPS)

The Wall Street Journal ^ | 8 May 2006 | Richard Gibson

[Basselope]

UPS's purchase of Mail Boxes Etc. looked great on paper. Then came the culture clash.

By RICHARD GIBSON

May 8, 2006; Page R13

When United Parcel Service Inc. announced it was acquiring the Mail Boxes Etc. shipping chain five years ago, franchisee Dana Houser thought his entrepreneurial dreams were finally coming true.

UPS was one of the biggest names in the business, known for prompt, reliable service. Mr. Houser figured the company's reputation would send customers surging into his Mail Boxes Etc. store in Lincoln, Neb.

UPS, he recalls, told him that outlets would see so much more volume they could easily hit $1 million in annual revenue, about four times what he was pulling in then. "They were going to make us the premiere shipping channel," he says.

But today Mr. Houser is wondering how much longer he can keep the doors open at his shop, now doing business as the UPS Store. His anticipated volume increase never arrived, while profit margins vanished as UPS cut the fees he got for handling packages. And the company opened another store nearby, which siphoned customers, the 34-year-old franchisee says.

Mr. Houser says that when he sees UPS ads that ask "What can Brown do for you?" his response is: "Stop competing with me."

[dhuffman@awod.com]

No comment OP? 'Er ya glad or sad? Rank capitalism is of mixed blessings.

[steve86]

Dallas Morning News article thread

http://www.freerepublic.com/focus/f-news/1628655/posts

[mhx]

The expected volume increase never arrived because people like me won't use UPS.

In my business we use fedex -- the packages are handled better, they get where they're supposed to on time, and fedex ground is even cheaper than UPS. I just can't think of a reason I would want to use UPS.

[NJ_gent]

"In my business we use fedex -- the packages are handled better, they get where they're supposed to on time, and fedex ground is even cheaper than UPS. I just can't think of a reason I would want to use UPS."

It's the exact opposite here. UPS gets the packages there on time and relatively safely at a lower price. FedEx, when we're forced/suckered into using them, has a tendency to show up at the very end of the day, if at all, and absolutely destroys our packages. We had a 19" LCD monitor with a boot print on the box and a large hole at the top of the boot print. Go FedEx!

That's why I would want to use UPS.

[mhx]

I guess it varies by locality or something. That's strange. I've never had fedex wreck a box on me, but it's pretty common with UPS.

On the other hand, my favorite recent shipping experience is the person who shipped me a monitor in a way oversized box with no packing material at all in it. The monitor was just rolling around inside.

Miraculously, it arrived in working order. It also was a non-fedex and non-UPS shipper. And the box was pretty beaten up, so it's not like the shipper handled it really carefully.

[rwilson99]

I see bad marketing all over the place here.

1. Would you go to the UPS store to pick up your mail?

MBE's original core business was private mail boxes, where up to a couple hundred PMB customers would pay around $50 per quarter to get mail and overnight packages handled. $10,000 a quarter at a minimum.

These daily mail pick up customers where often small businesses who would also ship with a number of services offered by MBE via FedEx, UPS and the USPS. The MBE type location that I worked with the past also offered direct mail and a number of other services.

I guess rebranding MBE as the UPS store has a major disadvantage... the impression you can't get you mail or FEDex packages anymore... fewer daily mail clients... fewer small businesses ordering shipping.

Bad marketing.