Mail, shipping, and eBay franchises are part of the greater packing & shipping service franchise industry. These franchises are closely related to courier franchises.
Mail and Shipping Franchises
As for mail and shipping, most people are likely well aware of the major services, such as FedEx, UPS, and—of course—the United States Postal Service. However, mail and shipping franchises vary in size and are more accessible to own for prospective franchisees than many imagine.
Mail and shipping franchises function similarly to the postal service. However, their services are provided in a more on-demand fashion. Mail and shipping franchises also tend to have fewer restrictions in the way of size, weight and/or commodity because they are in the private sector.
In addition, many of these franchises offer an array of retail services that can be used not only by business owners, but one-off customers as well. These services can include mailbox rental, package receiving, postal, printing, copying, packaging, shipping, office supplies, passport photo, notary, and certain other business support services such as website design, webhosting and email marketing.
A major development in the mail and shipping industry was the development of internet selling, also known as e-commerce.
Though traditional postal services were put somewhat into flux by an increase in electronics usage, particularly the advent of email and online billing, e-commerce has had less of a negative effect on the future prospects for mail and shipping franchises.
As stated by market research company IBISWorld, “packing and shipping service franchises will likely benefit from the rising volume of packages, mainly from online purchases, that are shipped domestically and internationally between consumers.”
And one of the biggest contributors to the rising volume of packages being mailed and shipped in the world of e-commerce is eBay.
eBay Franchises
eBay is one of the most popular online marketplaces in the world boasting 135 million users worldwide who have bought something on eBay at least once in the past 12 months (as of Q3 2022).
eBay franchises allow aspiring business owners the possibility of cashing in on ever-popular eBay auctions without coming up with a business plan from scratch.
Franchises like these can be operated from a brick-and-mortar store location or, in certain instances, from the franchisee's home. With these kinds of franchises, franchisees typically make money by a combination of two ways. The first is by consignment, meaning franchisees sell items people bring to them and collect service fees from the sale. The second is selling overstock products, whether they be acquired from the surplus of other companies or customer returns.
Below is a basic outline of how the process works:
- Products are brought/delivered to the franchise. The more popular way is customers bring in items to consign. Franchisees hold the items for a limited time until they are sold or returned to the customer. The other way to acquire inventory is to order items from manifest statements of overstock items that were destined for sale on eBay, or other outlets such as Amazon or Craigslist.
- Products taken into inventory are inspected, researched and, if applicable, tested by the franchisee as research before creating a selling description, also known as a listing.
- The franchisee creates a listing by writing copy and taking photos of the item for sale. After posting the listing online, franchisees also monitor the auction through completion.
- When the item sells, the franchisee collects the winning bid. The franchisee also packages and ships the item to the winning bidder.
- After the auction and shipping of the purchased item is complete, the franchisee sends the proceeds (the winning bid minus any service fees per the signed agreement) to the customer who brought in the item to sell. If the item was part of the franchisee’s own inventory, the proceeds are theirs to keep minus any applicable online fees.
The Initial Investment and Opening Costs for Mail, Shipping, and eBay Franchises
The amount necessary to open a franchise varies depending on the unique business system and execution requirements for that particular franchise. The initial investment required for a mail, shipping or eBay franchise can range widely, mostly dependent on the level of real estate purchase that will be needed.
In addition, for the function of certain business models in this field, you might need to factor in the lease or purchase, along with the maintenance, of a reliable vehicle to your initial budget estimates, if you don’t already have one.
Our franchise profiles will present you with a basic range for the initial investment or minimum cash required to open a franchise. But when it comes to finding out the details of an initial investment, the FDD is the best place to look. Franchisors offer itemized estimates in their FDD based upon their experience establishing, and in some cases operating, units.
Keep in mind these estimates are just that, though—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Ongoing Costs for Mail, Shipping, and eBay Franchises
Throughout the length of the agreement there are costs for being a part of the franchisor’s business system. These costs include items such as royalty fees, charges for technical support, and continued advertising/marketing costs.
The most common is the royalty fee. Royalty fees are assessed for the continued use of the franchisor’s trademarks and patented processes, along with certain types of operational support. In addition to regularly assessed fees, other fees are charged on an “as needed” basis such as audit fees, or costs for additional, non-mandatory, training.
In addition, it’s important to note that while many initial and ongoing costs are detailed in the FDD, there are some costs inherent to business ownership, like employee wages or utility costs, that aren’t.