By Alyssa Quill and Melissa Stiles
In today’s competitive climate, offering additional services at your facility isn’t just an added draw for tenants, it can contribute positively to the bottom line. Office and shipping services are a great complement to a self-storage business. These might include copying and printing, package shipping, notary services and passport photos. If you’re thinking about introducing these offerings, here’s some guidance on benefits, pitfalls and more.
Benefits
Ancillary services have many advantages for storage operators, the most significant of which is an increase in foot traffic. Add-ons bring in people who might not otherwise think about using a storage facility. In an average month, office and shipping services can draw more than 650 customers to a storage site, according to our data. These are potential customers who will be exposed to the self-storage component of your business.
Another benefit of offering these services is they have different busy seasons than self-storage. The busiest time of the year for most storage operators is the spring and summer, while shipping businesses enjoy a customer influx during the winter months. This will keep staff consistently busy and boost revenue year-round.
Marketing your office and shipping services is easy because of your built-in self-storage audience. Simultaneously promoting both sides of the business is key. These two customer segments can be crossed-marketed, presenting the community with both services in a one-stop-shop format.
You also reach out to local businesses that could use the add-on services you offer. These partners can join your facility’s referral program and be rewarded for sending new business your way, and they might need storage in the future. Your facility will be a single-source provider for all their business needs.
A simpler benefit is you can print and copy your own marketing materials right in the store, saving you time and money.
Investment and Partnerships
When adding office and shipping services to a self-storage facility, be prepared to spend money up front. To provide a high-quality offering and gain loyal customers, first-rate equipment is a must. Copiers and printers must produce pieces that meet high standards. Research which machines will provide the best results, and check to see what similar businesses are using.
Consider partnering with a franchised company that specializes in these services, for example, PostNet Neighborhood Business Centers, The Mail Box Store and The UPS Store. There will be initial costs, but the partnership could yield a larger payout over time. Choosing to add services through a franchise allows for exposure and name recognition along with support and access to best industry practices. Associating with an established company can also help drive more traffic to your facility, which will result in a higher profit margin. Finally, franchises often have incentives programs to motivate managers to sell their products and services.
If you prefer to keep it simple, you can simply allow your facility to serve as a package drop-off center. Along with accepting packages for major shipping carriers, there are now opportunities to host an Amazon locker, a kiosk-type unit that allows for the secure delivery and pickup of Amazon purchases and returns. You can make a small income by leasing space to Amazon, however, the real benefit is the increased traffic to your facility along with the opportunity to sell packaging supplies to these customers.
Pitfalls to Avoid
The benefits of adding office and shipping services to a self-storage operation are great, but there are also drawbacks. The expense ratios are higher with these services. They cost more to provide; therefore, the value per customer and transaction is lower. That said, the customer and transaction volume is significantly higher.
In addition, allocating human resources can be tough. The volume of ancillary sales is higher and could take up more of the facility manager’s time. The revenue from self-storage will be higher than that from office and shipping sales, so he must focus on the core business first.
If you’re partnering with a franchise, make sure you fully understand the company’s requirements. Certain signage, equipment and volume may be written into the contract. It’s important that your business is able to adapt to the franchisor’s needs.
Finally, check for competition in your market. Are there any existing franchises for national brands? Are there mom-and-pop stores already offering these services? Are you near a U.S. Post Office? These are questions to consider before you begin. There must be sufficient market demand to make this profit center successful.
Office and shipping services are simple to add and can greatly serve your current tenants as well as attract new customers. First, weigh the pros and cons to see if they make sense for your business.
Alyssa Quill is an owner and Melissa Stiles is the marketing manager for Storage Asset Management Inc., a third-party management and consulting company that oversees more than 50 self-storage facilities across the East Coast. For more information, call 717.779.0044; visit www.storageassetmanagement.com.
