Commercial Mailbox Manufacturers Business Models Continue to Evolve
The Commercial Mailbox Industry and What's in Store
USA Building Supplies’ management continues to keep a watchful eye on the centralized mailbox marketplace as change is the only variable that appears to remain constant. The commercial mailbox industry has seen manufacturers consolidate, go out of business, and enter the manufacturing arena for mail receptacles. The ecommerce explosion has further complicated the commercial mailbox manufacturers and distributor business models. In addition, the uncertain future of the USPS due to the World Wide Web and the need for the Postal Service to change their business model focus from letter delivery, to becoming a more well-rounded organization with a significant focus towards small packages. Below is a discussion of the recent history of events that have taken place in the industry and an overview on where this industry may be heading as we move through the 21st century.
Centralized Mailbox Supplier Staying Up-To-Date with Postal Changes
The commercial mailbox product line consists of four basic product groupings according to most industry insiders which are cluster box units, 4C horizontal mailboxes, horizontal mailboxes and vertical mailboxes. Most commercial mailbox manufacturers and distributors put the majority of their resources into cluster box units and 4C mailboxes because those two offerings make up approximately 75% of revenues. The cluster box unit design is patented and controlled by the U.S. Postal Service and they choose the manufacturing partners they wish to license the manufacturing of cluster boxes out to. Because of the USPS control of the design and manufacturing of the cluster box unit the product has very little product differentiation from one manufacturer to the next. This made this the cluster box a commodity in the marketplace in terms of price. The 4C mailbox was introduced into the commercial mailbox sector after the cluster box and the USPS was less strict on the manufacturers in terms modifications and configuration offerings. The 4C mailbox also requires more sales consulting to ensure that the customer requirements are being met, therefore the 4C receptacle is less price sensitive but more time consuming for manufacturers and dealers. Because of the marketplace happenings aforementioned and the minimal barriers of entry for dealers the commercial mailbox manufacturers were put in place where they needed to examine their business models. Does the manufacturer go direct sell their products, dealer channels or both? The internet further complicated matters as many dealers began to carry multiple brands, therefore not rewarding manufacturers that had remained loyal to their dealers. One unexpected industry event occurred when the 4C pedestal mailbox entered the marketplace that provided an alternative to cluster box units although local postmaster approval is required. Where will the commercial mailbox marketplace go from here is hard to say, but one thing is for sure is that it will keep changing.
Because of the turbulent times in the commercial mailbox industry manufacturers have sought additional ways to grow and diversify their business. Cell phone lockers are a recent addition to couple different manufacturer’s product lines that has been successful. The cell phone cabinet was easy for the manufacturer to produce in their own facility because it was just variation of a horizontal mailbox. Another product recently in the news is that commercial mailbox manufacturers are adding package delivery lockers that can accommodate packages from different carriers. Finally, it is USA Building Supplies’ management belief that if the correct opportunity presents itself for an acquisition the industry manufacturers would jump at it due to the uncertainty facing the USPS.