Bookstore Profits by Opening Post Office

Tom Warner, owner of Litchfield Books in Pawleys Island, S.C., stumbled on an unusual method of bringing in customers: last November, he opened a post office. “If every bookstore would do it, they would find it a blessing,” Warner said. “My customer transactions are up 15%.”

Dubbed “contract postal units” (CPU) by the United States Postal Service, these auxiliary post offices allow customers to mail letters and packages and buy stamps. The process required Warner to place a bid with the USPS to win the contract. After winning, he said it was “a turnkey operation,” with the USPS supplying the counter, scales and computer, leaving Warner to “screw in the screws and nail in the nails.” In all, Warner estimates he spent about $1,500 to install the CPU. Warner did not expand his store, but did sacrifice some of the seating area in his coffee shop to make room.

As the operator of a CPU, a store pays full price for postal inventory, such as stamps or packaging materials. It is then paid a percentage of overall sales, in the case of Litchfield Books, Warner receives a 10% commission on gross sales.

Warner is responsible for providing staff for the CPU—his biggest expense. The unit is open from 9 a.m. to 5:30 p.m. weekdays and Saturdays from 9 to 2:30. Warner estimates that he needs to get the volume at the unit up to $250,000 per year, which will give him $25,000, enough to cover the salary for manning the CPU. “After that, it's profit,” Warner said, hinting that he is close to that goal.

He called the CPU a great way to get people into the store. “I'd say a full 30% of the people coming through the door are due to the postal unit,” he said. “There's been one obvious impact on my business: I'm selling a lot more cards.”