How can I tell if a pack-and-ship store is profitable before I buy it?

A pack-and-ship counter can look busy all day and still keep little from each parcel, because much of what customers pay goes straight on to the carrier. That is why total sales alone tell you little. The useful question is what the store keeps, from which services, and how steady that is across the year. Your accountant can build the picture with you from the seller’s records.

Split the revenue by stream

Ask the seller to break sales into carrier shipping, packing supplies, mailbox rentals, print and copy, notary or other counter services, and anything else. Each stream has its own cost, its own customers and its own risk. A store that leans on one carrier or one big account is a different business from one with many small customers across several services.

Find what the store keeps per parcel

Shipping revenue often includes the carrier’s charge. Ask how the books show the amount owed to carriers and the amount the store retains. Look at several months of carrier statements and compare them with the sales records. If the two do not reconcile, ask why before going further. Differences can come from timing, returns or claims, and your accountant can help you tell which.

Read the seasons

Parcel counters usually have peaks, often around holidays and the start of the school year. Ask for monthly figures covering at least a full year and, if possible, more. Ask what staffing was needed in busy weeks and what happened in the quiet ones. Plan for a slow month in your own cash flow, not just the best one.

Check the costs that sit under the sales

• Wages for the hours the counter must be open.
• Rent and any agreed changes to it.
• Franchise or network fees, if the store belongs to a brand.
• Shrinkage or damage claims the store absorbed.