Recently I’ve been hearing radio ads promoting photocopy and bindery discounts at The UPS Store. Photocopy? Huh? If this isn’t an example of how to dilute your brand I need to go back to school. *cough*
Why do I say that? Because the UPS brand is all about delivering my package. It’s not about copying in color for only 39 cents a sheet. It’s not about the fact that they can also bind my presentation for me. It certainly isn’t about color prints vs black and white.
Looking back a few years, remember how when FedEx purchased Kinko’s they purposefully kept the Kinko’s name? That was a smart move on their part because for one, Kinko’s had a name. The two brands stand on their own.
When UPS purchased Mailboxes Etc. last year they didn’t get as good a deal. Mailboxes Etc. didn’t have mass market appeal and was more about your neighborhood post office box — not photocopying and printing. Despite this fact UPS is trying to be all things to all people. A big mistake. It won’t hurt them in the long run however they will only dilute the UPS name and waste time and money. UPS means shipping. It can’t also mean “color copies.”
What should UPS have done? They should have made a gutsy move to purchase Alpha Graphics and rebranded the stores as Alpha Graphics UPS. That would have kept both ideas separate in my mind and would have presented a business advantage.
Lastly, if Alpha Graphics had said no I still think it makes sense to purchase Mailboxes Etc., however what was done next should have been different. UPS should have come up with a clever name (something cool like Kinko’s) and launched a new photocopy center overnight.
We all know what this is really about. It’s not about photocopies and it certainly isn’t about helping small businesses print their next set of generic business cards. This is about major shipping services having a location. A place in people’s minds that they can reference any time they need to ship something. In this case, FedEx Kinko’s is doing everything right and UPS should focus on what they do best — shipping.
1,505 responses to “The UPS Store vs FedEx Kinko’s”
There’s a lot more to this than you think. The way each of the companies operate is completely different. I used to work for a UPS Store location and we did suffer for a lot of the problems you’re talking about above. But then again, it’s still not just a factor of who bought who and who kept what.
Hi Bryan,
That’s a great point. I realize that UPS didn’t buy a copy shop like Kinko’s. They bought a company that also had much more like post office boxes. So their approach would have been different.
Chris
And FedEx only bought Kinko’s after NowDocs went belly up.
The fact that you came up on this on your own proves that you are an insightful individual. The owners of The UPS Stores have been struggling with this issue for three years, and now we’ve decided to litigate.
When we were sold this bill of goods (it was our choice whether or not to convert from the MBE name), we were told that if we accepted lower shipping margins, this would drive more traffic to our stores, and therefore the stores would be more profitable. More people would mean an increase in sales from our other profit centers.
That didn’t happen. Stores began springing up all over the place because people were buying on name alone; thinking they were getting a piece of the UPS pie. Our franchisor, UPS/MBE became a franchise factory. Customer counts dropped and we were left with only lower shipping margins.
We tried desparately to negotiate with MBE in order to fix the broken business model for over a year, to no avail. Now UPS has told us to stop concentrating on what we know best, packing and shipping, and concentrate on our other profit centers, like copying and mailbox rentals. Well good grief if that’s the case, why change the name from Mailboxes, etc.?
We intend to right the injustice done to us. For more information, go to http://www.thebrownboard.com, or http://www.talkbrown.com.
You should point out that UPS was much smarter than FedEx. They used the franchisee’s captiol to finance their foray into “retail” pack and ship.
As pointed out above there is a law suit on the horizon but there have been several lawsuits vs UPS for the past several years. When queried by the press UPS just says that these are run by dissadents and there is no further press coverage.
I wonder why?
I think Bernie and MikeS have valid points. I think it would be a long shot to say that UPS didn’t have good intentions. I suppose the law doesn’t care about intentions though.
I’m a firm believer in moving on when things aren’t good. Change is good and it sounds to me that it’s time for people to maybe move on from The UPS Store. Who knows.
It’s hard Chris. Many of us have over $200k invested in our stores, and numbers don’t lie, so it’s difficult to get our investments back. We attempted every means of negotiation possible with UPS in order to right the ship, but they wouldn’t hear us.
I will give you one word of caution on this topic (and I thank you sincerely for you bringing this to light), UPS doesn’t mess around. You may think I’m paranoid, but MikeS and myself are moderators on other forums. If our corporate sees this site, they will pose as store owners and begin to insult yourself or the others here. They will use profanity. They do this on a regular basis to make the owners look silly. Remember to delete them and report them if this happens. Maybe my warning here will deter.
A retail business calling itself “The UPS Store” will always be known for one thing: UPS Shipping. Many of us who were successful Mail Boxes Etc. owners fought the name change, and for exactly the reasons pointed out in the article. Do you go to a Midas Muffler shop for tires? Burger King for pizza? Nope, and you won’t go to a UPS Store for copies. When your brand and product are as tightly linked as “The UPS Store,” anyone who thinks those stores will succeed as anything else besides shipping centers is either chronically stupid or tragically misinformed.
The attempt to promote other products and services is because one can only imagine the hit that these took with the name change. However, I think no feasable, affordable amount of promotional investment will make a lasting, worthwhile difference. The name on your door is what you do, and it’s “The UPS Store.” This is not rocket surgery to figure out.
This, of course, is just my not-too-humble opinion, after 25 years in the marketing communications business..
I like the way that they bait and switch on the sell of these franchise. They exploit the brand name of UPS and lead the buyer into believing that shipping will be their business. Then Stuart Mathis in is annual 2006 letter to the network makes a point of saying that we have to move away form shipping. Now DS is our game. I am confused, but why is it that the UPS Shield is above TUPSS door and is in our brand name. Oh yes so that I can make my money in copies.
right on,you couldnt be more on the mark. i just wish ups wasnt so deceptive during their rebranding roadshow. i believed them,after all why would ups lie? theyre a billion dollar company they must know what their doing.i wish i could go back and vote no and stayed an mbe.i cant even sell this piece of garbage.
UPS uses deception in all areas to lure more customers their way, The deceive the public into believeing the UPS Stores are company owned. The deceive their shipping customers by providing pre-paid shipping label for returns on products that contain hazardous material and know that the person using that label has never been trained to recognize hazardous materials. The let UPS account holders to believe that they can get alot of free services at the UPS Stores.
If they intended to make the UPS Stores into drop-boxes that also act like a copy shop, why did they change the name from Mail Boxes, Etc? UPS = shipping, doesn;t it?
They are building their business on the backs of small, independent business owners, who have invested over $200k and who can’t make enough profits to pay themselves. Their response? The owners must be doing something wrong.
Approximately 15% of the store owners in the US are actively engaged in lawsuits against MBE/UPS. That speaks volumne’s!
Consumers- don’t boycott the UPS Stores, just UPS.
Thanks
The word is getting out folks. Just spoke to a reporter from The Wall Street Journal about the state of this franchise. He is speaking to alot of franchisee’s about their plight in this unfortunate experiment that UPS has put on our backs. All I ask is that if you are contacted by this reporter, please be very fortcoming and tell the whole story about how UPS has destroyed a good franchise and countless innocent franchisee’s. This is the time to stand up and tell Goliath that the little guy is not going to take it anymore.
I stayed an MBE because I didn’t like the contract being offered by UPS. The contract, in my opinion, turned a busines owner into a manager for UPS. The contract was so fully-loaded to benefit UPS and give them unprecedented power to take stores away that I was floored how many people actually signed it. The reason most gave for signing it was what the poster above said “why would UPS lie?”. But they did. This isn’t a “told you so” rant” I am trying to help illuminate what UPS has down to our (all of us)businesses. They lied and decived everybody. The presentation we saw at our Gold Shield meeting was the ultimate dog and pony show. There were pages missing in our hand-outs that they showed in the slide show. Yeah, the pages with the figures; how about that? When pressed by a few members in our group about them (UPS) having the right to TAKE a store that scored low on three mystery shoppers their response was “you guys are taking this too literally, we wouldn’t do that”. That was countered with “then put it in the contract” and the reply was you guys are being too nit-picky”. When the dissenters showed they weren’t going to let up the UPS presenter just said “we’re moving on” and that was the end of it. UPS has it’s own agenda and the fact that some people are declaring bankruptcy on what was supposed to be their retirement, or maybe their life savings, or lost their home does not mean a thing. We are just pawns in a corporate game. Sorry this was so long but I am still mad as hell.
I am one of those poor souls who bought into this ponzi scheme and has lost his life savings, retirement nest egg, my children’s college fund. It will be a miracle if I do not have to file for bankruptcy. Since my house is collateral on the SBA start up loan, it is a given that I will loose that too.
It is a fact that any business venture carries risk. It is also true that UPS/MBE discloses to potential franchisees that they make no earnings guarantees. In fact, they do not disclose historical earnings of existing locations until after you become a financially committed franchisee. This makes due diligence difficult and in place of hard numbers you can easily come to the conclusion that if there is a network out there with so many stores and the backing of a major corporation, how bad could it be? Franchise literature touts the best of both worlds – the tested business model of MBE and the brand name recognition of UPS.
For me and many like me, the reality of the situation becomes clear only a few months into the venture when the kool-aid hangover starts to wear off. At the time of the brand conversion comments were made by corporate representative like “million dollar (yearly gross) stores will be commonplace”. “Don’t worry about the UPS brand because shipping revenue alone will carry a store.” Three years later, it is very clear that those predictions could not have been more off the mark. Mr. Tingom, your article hit the bulls eye as to what is wrong with The UPS Store concept.
The sad thing is that UPS has the power to fix this thing. The reason they won’t is that they are blinded by greed. They set a retail rate that is higher than internet shipping. If you go on line, print your own label, pay by credit card, drop it off at the UPS Store, and save 10% in the process, then why go to The UPS Store and pay more? Small business that open 6 digit accounts have even more substantial discount even if they are low volume shippers. UPS has admitted to mining The UPS Stores data base of customers to steal higher volume customers, contacting them to open 6-digit accounts.
You would think that a The UPS Store location would have one of the best rates out there for what they have to pay UPS for shipping, right? Wrong! A dominos pizza franchisee, Edward Jones Rep, or ERA Realtor has better rates than a The UPS Store franchisee who actually has to make a living off shipping! The UPS Store network is in the top 10 of UPS customers by volume, but a local small business can get a better rate. Companies like Amazon,com, HSN, or Lands End with volumes similar to the network can get rates that are half of what a UPS Store owner pays. The stark reality is that stores are failing because once you pay the UPS Bill, rent, payroll, etc., not to mention 8.5% of your gross sales as royalties, you are lucky if you have broken even.
Slowly, MBE/UPS has come to acknowledge that the brand can’t carry itself on shipping as is. Instead of adjusting the shipping margins in a meaningful way, they have launched “a document services initiative”. Your article points out the major flaw of this – branding. Document Services is a crowded field already.
To compound this, FedEx Kinko’s, Quik Copy, Alpha Graphics, and many others including independents not only have names that say what they do, they also have more capabilities. 2 self serve B/W copiers, a color copier, a laminator, and a binding machine does not make a printing shop!
Technological advances are changing this market as much as shipping. A small business can get their own decent color copier for a fraction of the cost of what it would have cost just a couple of years ago. Market entry would be formidable enough even if the brand and capability issues where overcome.
UPS’s attempts at fixing this are so feeble that they are largely negligible. Ultimately, they do not care because they have 5500 drop off points that they don’t even have to pay for. In my opinion, they underestimate how quickly this network is unraveling.
The fact is that it is simply not in UPS’s financial interest to have TUPSS franchise succeed.
UPS will simply wait for stores to fail or take over the expiring foc’s of the stores they want to keep, and the owners will be roadkill.
Well Chris, bet you hadn’t counted on all of that! Either way, thanks for letting some good people vent on your blog. You’ve done a good thing here, whether you know it or not. Cheers!
Best wishes,
bigb5000
Great post Chris.
Hope we didn’t scare you off too much.
For more info go to:
http://www.talkbrown.com
I found this to be an interesting discussion, having worked for a long while at Kinko’s (pre-FedEx) and also short while at MBE (pre-UPS). I’ll be interested to hear how this all turns out in the coming months – hopefully UPS will right their wrongs as best they can at this point and everyone will emerge better for it.
Anybody thought about creating a website listing just UPS Stores for sale yet?
Actually Mike, yes they did. A store owner was gracious enough to create such a site which I believe was called upsstore4sale.com. He was handed a cease and desist letter by UPS and pulled it down.
I stumbled across this site looking for information on a UPS Store franchise. My husband and I have been considering buying one.
After reading the gorey details of what is going on, I think we will look elsewhere. Being independent sounds a lot better, and more profitable. Why not simply become a UPS drop-off spot? If you have to make your profits on other items anyway, just being a drop-off will bring customers in the door.
Thanks everybody for your posts, you may have saved us a lot of grief!
Has Fed Ex Kinkos been more successful than The UPS Store? The feed back that I get from customers suggests the opposite. Remember also that establish mail boxes and house accounts builds customer loyalty. Also a locally owned franchise can provide more customer service.
As far as diluting the brand, that is a legitimate concern and I would be interested to see if UPS corporate can address that issue in the future.
Is there any place where I could get a complete listing of UPS Store numbers, address, City, State, ZipCode, Phone number, Fax Number list in a spreadsheet or database?
Greg, you can find the locator on http://www.theupsstore.com and when you find my store–give me a call!
Wow…it looks like I am going to be the only voice on this page that supports this franchise (And no…I’m not a UPS employee acting incognito) 🙂
I purchased an existing UPS Store in March 2005. Since then, my revenue and profits have been steadily increasing.
I would certainly agree with others that the UPS Store brand strongly represents shipping. However, when my customers learn that we have mailbox rentals, color copies, packaging, etc., they are usually pleasantly surprised and use these services in addition to shipping. In fact, most of our customers are very pleased because our copy prices are generally lower than FedExKinkos and our service is superior.
Also, I prefer the UPS Store brand over the Mailboxes Etc brand. UPS has such a huge marketing budget, and I can ride the coattails of the corporate “What can brown do for you?” advertising campaign.
For prospective franchisees: I wouldn’t run scared due to comments above. There are so many other factors: location, management, growth of area, how driven ownership is, etc…
Also, the UPS Store is highly recognized for a reason (Top 5 in Entrepreneurship magazine). Of course, there will always be owners that are not satisfied. Just understand that many of us are very satisfied.