Behind the Scenes of a Small Biz: In April, the Postman Rings

Editor's Note: This article is the fourth installment in our "Winning the Card Game" series. Dana Norman and Michele Rothberg acquired discount greeting card store Card$mart in June 2011. They agreed to let TheStreet follow them for one year as they experience the ups and downs of running a business. Based on advice from their accountant, the owners have declined to share revenue and profit numbers.

PLAINVIEW. N.Y. ( MainStreet) -- With the approach of the May 15 deadline when the U.S. Postal Service is expected to close several hundred post offices and distribution centers, Card$mart co-owner Dana Norman is giving a fresh look to her idea of remodeling the back room of her greeting card store into a satellite post office.

Frankly, it's not surprising that Norman is looking to expand into postal services. The energetic business owner is constantly looking for -- and experimenting with -- potential revenue generators.
Card$mart owners Norman and Rothberg want to add postal services to the store.

Norman had thought of the idea to add the postal services last year. As they acclimated to being store owners and dealt with the normal day-to-day issues of running a business, she had shelved the idea. However, the upcoming post office closings combined with Norman and Rothberg's attendance at the Card$mart National Conference in mid-April has rejuvenated her interest.

Card$mart licenses its name from Designer Greetings, which is also the vendor of the "50% off" line of cards the store sells. Yet the partners are not franchisees in the sense that they do not pay franchise fees or royalties to Designer Greetings. Norman and Rothberg are required to carry the Designer Greetings 50%-off card line, but can also sell other items and cards of their choice. Designer Greetings has declined to disclose how many independent retailers license the Card$mart name.

The Card$mart National Conference allows newer retailers to visit Designer Greetings headquarters (in Edison, N.J.), showroom and warehouse, and provides retailer workshops, informal idea exchanges as well as product and program presentations.

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Norman says while she didn't know what to expect during her first Card$mart conference, she did pick up some useful tips and met with vendors. It was at the conference where Norman met several Card$mart owners that were already offering the postal services.

"It re-lit that fire in me to make that back room into a post office," Norman says.

The USPS encourages retailers to serve as a Contract Postal Unit, or CPU. The satellite is "a supplier-owned or supplier-leased site operated by the supplier, under contract to the Postal Service to provide postal services to the public at Postal prices," according to the USPS website.

That means selling stamps, stamped envelopes, Express Mail service, First Class Mail service and registered mail, among other things, according to the website. Retailers are provided USPS branding rights and signage.

"Operating a Contract Postal Unit increases foot traffic and provides additional customer convenience," the USPS website says.

"Greeting cards and post offices go together hand in hand. They're very lucrative. It makes the store a real go-to destination," Designer Greetings spokeswoman Suzanne Haines says.

Haines couldn't quantify the number of Card$mart stores that offer the services.

Since the conference Norman has been trying to get into contact with the appropriate USPS representative, but so far she hasn't been successful. "I'm hoping not to miss the boat on this," she says. "Every day customers come in and ask to buy stamps" and as an accommodation, Card$mart will sell a small amount of stamps.

But Norman sees opportunity in the "underutilized space" in the back of her store. "It seems that it is a viable way to make some money. The bottom line is if we're doing something we have to do it to make money," she says.

"It Always Comes Back to Lotto"

Norman is also putting together the pieces for another revenue experiment that's planned to coincide with their one-year anniversary as store owners this summer.

Early on, Norman admitted that she did not have a good first experience with local coupon advertising, but she's trying it again. This time, she plans to launch the advertising with NY Lottery promotion.

Lotto is a big customer attraction to Card$mart. Last month, the Mega Millions phenomenon brought a welcome sales surprise to a typically quiet month.

"The intention is to bring more customers into the store. That's always the intention, just like selling stamps," she says. "If you become a postal center customers are walking to the back of the store," bringing more foot traffic through the center of the store who will hopefully pick up other items to purchase.

The lotto promotion will feature a coupon offering customers to buy 10 scratch offs, in order to get one free. (Lotto sells a deeply discounted scratch off to its merchants to coincide with the promotion.)

"We want to try something different," she says.

Upcoming One Year Anniversary

As the partners' first anniversary approaches in June, Norman is still reluctant to speak about whether the business is pulling a profit yet, but she did say that they no longer have to inject any personal savings into the business. She also says she wants to see how three large events -- Mother's Day, Father's Day and graduation -- add to the bottom line.

"You can't look at it as if you're making money day to day," she says. "It has to be more on an average for either a quarter or a year because these big holidays will float us through the slow months. Really this is when we should get a little cushion in the bank."

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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