The UPS Store: Fan Mail From Some Flounder(ers)
April 27, 2008 by Sean Kelly
Filed under Business
(FranchisePick.Com) “One would think that the UPS franchise owners would have generated a lot of support from fellow business owners… But I’ve found the UPS store owners to be a tough group to love.”
I have posted extensively on the struggles of The UPS Store franchise owners, who claim they have suffered a raw deal at the hands of the corporate giant.
Many of them purchased Mail Boxes, Etc. (MBE) franchises, and initially offered multiple shipping options, including both FedEx and UPS. When MBE was acquired by UPS, many franchisees claim they were pressured to both convert to the UPS name and drop competitive shipping alternatives like FedEx. Once they did, many franchisees allege, UPS began undercutting them by marketing lower rates directly to their potential consumers. To make matters worse, parcel-delivery-associated UPS name impaired their ability to market add-on services such as photocopying and document printing.
The franchisees have at least two lawsuits in progress against UPS.
It’s ironic that UPS, a company that caters to business owners, would treat their own small business owners so harshly. One would think that the UPS franchise owners would have generated a lot of support from fellow business owners and UPS stockholders.
My “bubble [wrap] of self-importance” is popped by barbed Cliches du Jour.
But I’ve found the UPS store owners to be a tough group to love. On my first trip to one of their forums, I was almost immediately attacked as a spy and outsider. When I recently suggested that UPS owners should bolster their contentions by providing some specific examples of stores that were operated by the book but still failed or failing, I was assailed with several insulting emails from a store owner who posts anonymously as “Fedup”:
You have an unjustifiably inflated opinion of yourself, as perhaps befits someone with a writing degree from a third-tier school…. Now that I’ve insulted you, as you did me on your blog, I hope I’ve been able to puncture your bubble of self-importance and get your attention so you can focus on the ‘graph following, which is provided as CONFIDENTIAL
This was followed by more vague ramblings and no “graph.” When I suggested to him that it would be possible to provide specific examples without undermining their lawsuit by, say, linking to published stories, I got more insults:
Your above attempt at sarcasm is both banal and pathetic. Being in a lawsuit precludes litigants from making specific statements could work against them, period…
And as a final reminder, once again, I repeat: As to whether we can prevail–or, to use your awkward expression, “outgun a corporate giant”–you seem to forget that a guy named David outgunned a giant quite handily. Or, to use another cliché de jour, “It’s not the size of the dog in the fight, it’s the size of the fight in the dog.”
…I’m through engaging in a battle of wits with the unarmed.
Whew! This is how UPS owners communicate with writers sympathetic to their cause?
My bubble [wrap] of self-importance had been pierced and my writing ability trashed by a man who uses the term cliché de jour.
I didn’t have the energy to clarify that a children’s Bible story involving a giant, a rock and a slingshot was not what I meant by a specific, tangible example…
I resisted the temptation to stoop to his level, to lash back that if he was so smart, why’d his Ivy League education lead him to owning a money-losing mailroom where daily he curses the very packing peanuts and bubble wrap that once brought him such delight? And why, pray tell, is he such a dick?
(Ok. I lied. I didn’t resist that last temptation).
I will continue to try to remember that one loudmouthed jerk should not reflect poorly on all The UPS Store owners. I will even consider that he may be a corporate shill, one of them outside agitators. But UPS franchise owners might want to consider reining in some of their colleagues.
It’s great to see there’s a lot of fight in the dog, but sometimes a leash, muzzle and few sessions at BarkBusters can do wonders for your public image.
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
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Jeeze, Sean–ref your last post. Ya really shouldn’t go near the keyboard after that last martini.
Honestly, my primary reason for being here is to caution against falling into the trap Sean is urging us toward by baiting us to make statements that could work against us.
I knew there was a reason. I promise that I will not solicit any comments or show any interest in anything any UPS litigant has to say. Your work here is done. Godspeed.
My position still stands– The disgruntled UPS owners would rather whine than go out and try and drum up business. You are expending so much negative energy here. Go out and get some corporate accounts, build customer loyalty, EARN the business–not just think it should be handed to you by the parent company. Advertising in one thing. Grass roots marketing is another. Shut down the computer. Quit calling fellow franchisees to complain and GO CREATE the change you want to see with YOUR BUSINESS you are responsible for.
Rita:
You make a good point and Fedups keeps providing a compelling example. If franchisees have a legitimate gripe and actionable complaint, that’s fine. They can pursue it separately. They don’t need to poison their own well and sabotage their own business to prove their point.
In fact, they’re proving the opposite. Fedups has spent a day and a half here basically saying nothing except that she can’t say anything. Not only is that time that could have been spent servicing accounts or prospecting for new customers, it seems unlikely that her negativity does not affect her employees and, ultimately, customers. I have seen many negative comments from UPS franchisees about their drop-off customers, as if it is their fault that they want to ship as cheaply as possible.
Wouldn’t it be great to see a UPS franchisee forum dedicated to making the best of a bad situation, finding new and better ways to provide value to customers that makes them willing to pay more because of the benefits The UPS Store franchisees provide to their business.
While their complaints against UPS seem well-founded and should be rectified, I also think that many of their comments indicate that they think they are in a commodity business when they are, in fact, in a service business.
To succeed in a service business, you’ve got to embrace a true dedication to serving your customers. I may be wrong, but I just don’t see a lot of evidence of that.
Sean & Rita,
Some confusion comes in because there are actually 3 different types of franchisees within the MBE system. 1. There are the Mail Boxes Etc. owners. These folks bought into a successful franchise and choose to remain with that business model. 2. There are previous Mail Boxes Etc. owners that converted to The UPS Store business model. 3. Those franchisees that bought into The UPS Store franchise.
Lets look at a current situation. Arby’s now owns Wendy’s. What if Arby’s now mandates that all Wendy’s restaurants will become Arby’s? What if a Wendy’s owner prefers to sell fresh square hamburgers instead of roast beef sandwiches? Should they just go out and promote their new restaurant and quit complaining? Are they just lazy and won’t work the system? At least Arby’s had been a franchisor previously and UPS was not. UPS had no track record with The UPS Store business model.
When you say that The UPS Store owners are a hard group to love, I think you need to distinguish which group you’re talking about. Just because they got bought by UPS shouldn’t allow UPS to pull the rug out from under their successful business that they have invested their blood, sweat and tears.
Sean wrote: “I have seen many negative comments from UPS franchisees about their drop-off customers, as if it is their fault that they want to ship as cheaply as possible.”
Sean, that would be dead on -except for that is not the complaint.
The complaint is this: UPS tells the drop-offs that a) all they need to do is fill in online the mailing info, and b) just drop-off the package.
The problem is that the drop-offs don’t have simple mailings and too often they pay a low fee to UPS, but the extra service is done by the franchisee who was to eat his or her time.
Let me give you an analogy. Suppose that I could get a taxi from my home to downtown for a flat rate of $5. The timed run is $25.
The brokerage, UPS, offers the online service of $5 to people who show up at my taxi stand with a chit that I have to take.
Good for them for getting downtown cheaply. Good for UPS for offering a great deal.
Really bad for me, who has to eat $20 and make it up on the volume.
That in a nutshell is the UPS business model for its franchisees, plus a little churning on the side.
Michael: Understood completely. My point is that it’s not the customer’s fault that they’re getting hosed by their franchisor. If the franchisee’s frustration toward UPS is misdirected at the customers, which is understandable, even predictable, total failure becomes a self-fulfilling prophecy.
Regular customer Joe HomeBiz comes in 20 minutes before closing with an armload of 5 boxes with the shoe samples he regularly sends to prospective customers. Last month he would have paid $7 per package for the franchisee to ship. But now UPS hooked him up with his own lil account & home printer and he saves a few bucks by bringing them in with his own preprinted labels. Only some aren’t sealed correctly and the Zee has to give him a packing lesson that backs up the line, and has to give him free tape to boot. Zee now gets $1 a box, and rakes in $5 total. Last month, it would have been a $30 transaction, but his own franchisor undercut him and made the store Zee financed with his life savings and home equity their personal, staffed drop box.
If I were Zee, I’d be livid, flaming hot, potentially violent. And I’d do a slow burn when I see my ex-favorite customer clattering through the door to waste my time and pull the bread from my kid’s mouths. Maybe the whole staff rolls their eyes and sighs every time they see the big oaf coming in. Maybe some days I don’t even try to hide my disdain for Joe HomeBiz. I’m hoping he’ll go somewhere else and don’t care if he knows it.
I suspect that’s a common scenario, judging from many of the ways frustrated UPS Store franchisees talk about their customers.
What did Joe do wrong? He probably has no idea what’s happened. To him UPS is UPS. All he knows is the service there sucks and he starts dropping off at Staples, where he does his copying, photo printing, etc.
Who does this hurt? Not Joe, who’s used to crappy service and is saving a few bucks. Not Staples, who keeps the copying biz, etc. and get’s the $5 per trip. Not UPS, who still gets the shipping no matter what. It only hurts Zee, who lost the $5, plus the potential for whatever non-shipping business Joe could use them for; it hurt the store morale, because now staff thinks it’s ok to regard some customers with disdain; and it does real damage to the Zee’s future, because if they manage to get UPS to bump their share or cut them in on the home business, they’ve lost that customer for good.
I speak from experience. I was working with Unishipper’s, a DHL reseller. We shipped our work product to them in their prepaid flat-rate overnight delivery envelopes.
When called for a pickup, the DHL driver was really nice, as usual, until he saw that it was the Unishipper’s DHL envelopes, which is less margin for DHL. He immediately started treated my staff like crap. Our stuff never got there when it should have, which the local Uni rep said isn’t uncommon.
I’ve never used DHL direct again. We used to use them exclusively for International, but we’d pay more to go with a competitor. My opinion: Their profit margin is not my responsibility nor my problem. My opinion: Screw DHL. Jerks.
Guess what, Zee? That’s exactly what Joe HomeBiz thinks of your UPS Store.
You know that I have answer to this, don’t you.
Mostly, I agree with the scenario as laid out.
Ok, I will give you answer – run the scenario as negotiation problem with the UPS franchisees playing all parts and see what comes up as solution.
Repeat, rinse, repeat until you have a solution.
Michael Webster: I’m impressed with how fast you read that. But I’m afraid your answer is as cryptic as my last comments last night – when I was accused of being drunk yet was, alas, cold sober.
Chris: You make an excellent point and make the distinction that I attempted to make to Fedups, but got sidetracked by trying to get her to go away.
My request for an example was really most intended for the third group, but kept getting answered by the angriest of the second group. I was hoping for someone, other than me, to give the scenario we just ran through to show how – despite the high profile name & ad campaigns – this business model is not constructed for attractive franchisee margins.
Since UPS gave the franchisees a name that means “shipping,” then told them to sell photocopying, an even better example than Wendy’s/Arby’s would be if Shoe Town bought Wendy’s and jacked up their costs so they only made a dime a burger. When the Wendy’s franchisees screamed, the franchisor would point to the new display racks they made them buy and say “To make up the lost profit, just upsell them to a pair of loafers!”
Sean;
The scenario you have described is a 3 person bargaining game: shipper, UPS, and customer.
The current “solution” has the customer getting crappy service, UPS get some but not all it could get, and the shipper/franchisee getting nothing.
This is a bad bargain for everyone.
There are lots of professional negotiators which will take this game on and improve everyone’s outcome.
I was looking for information on franchising UPS stores and glad I found this.
My personal experience with UPS stores has been bad. I have visited two different stores in the past to drop off packages. In the first instance, I needed a box to put the shipment inside. The store gouged me on the box and even charged me for tape. In the second store, I only needed one 14″ piece of tape and the store tried to charge me $1 for the tape (I ended up going to the grocery store in the same strip mall and buying a whole roll of tape for $2.99. On the other hand, FedEx Kinkos gives boxes, tape, markers, staples, paper, etc. for free to use. So now I know why customer service is so bad at UPS stores — no one is making money so the owners are nickel-and-diming me on tape. (if you’d rather be in the tape and box business instead of the serving customers business, that’s probably why you’re losing money)
All the owners of the places are idiots and they deserve to lose money. The business model is stupid and they should have known it from the beginning. Business owners get their packages picked up by the courier, and savvy internet biz people use online shipping because it’s cheaper than retail. So basically all these stores either become big drop boxes, or they have to compete with the USPS which is cheaper. If it was such a good idea, why didn’t UPS do it themselves?
Actually UPS tried to do it themselves and failed!
The business model is stupid, but not all people saw that!
It is unkind, unnecessary and untrue to call anyone idiots!
The stores provide a convenience and service level that many consumers are willing to pay for and can get nowhere else.
The problem with the UPS Stores is not that the prices are too high, the problem is that the prices are too low.
AND if you took time to check, you would find that the USPS is not always cheaper.
It seems that prior to the sale MBE was a much happier family. We used to have great time at our reuniouns and area meetings. I think that Tony D. did a great job in building the company. I believe it started to unravel when purchased by USOP. The stock dropped and eventually went off the big boards. UPS saw a great time to add brick & mortar, control the vendors and add hubs for pick off drop off sites. At one time there was a full time account executive located at the cornerstone office. UPS really built that relationship and aided the franchisee in any way possible as far as accomadation and in contest with FedEx and the other vendors. That went out the door when they purchased MBE. Many centers had cultivated a large client base and the stores were known to user friendly and family operated. At first there was great excitment when the sale was made known in Las Vagas during the reunion. I do belive that the leadership during the time knew what was down the road for the franchisee not to mention the large payouts that were made to the executive team who assisted in the transaction. The previous mgt style was hands on prior to Mr. Amos arrival. After the sale it was a real culture shock to all mbe’ers. During Tony’s time the company went public and then become a private firm through the sale with USOP. The worst thing they did was change the name of the centers. It was a well established, customer friendly and brand loyal name. When I think of the UPS store I think of sending someone a package. It is not being promoted as the small business owners business solution, use of a mailbox with a address that does not include a PO number. I am starting to ramble but just a few thoughts that came to mind. I know for a fact that are over 400 centers involved in the class action suit and that a Federal Judge has certified the case. There are always some who you cannot please. I belive that Amos and crew sold to the highest bidder without concern for the so called “franchise family” we were. Thanks for the space. Wish I has spell check!!!
Even if they never buy a thing, here are some good reasons to treat drop-off customers right.
THE UPS STORE Franchisees: Drop-Offs Can Drop Dead