Mail Boxes Etc. Plans $15 Million Online Expansion

Fresh off a deal with eBay last month that calls for its being the auction site’s leading shipper, Mail Boxes Etc. announced Tuesday that it will invest significantly in the e-commerce shipping business and the technology required to wire a network for its 3,000 domestic franchises.

A subsidiary of U.S. Office Products (Nasdaq: OFIS), the franchiser of retail business, communications and postal services said Tuesday that it also has signed a further strategic alliance with iShip.com, a provider of Web-based shipping solutions. The alliance gives Mail Boxes Etc. (MBE) an equity stake in iShip.com, joining eBay, UPS Strategic Enterprise Fund and others.

MBE and iShip.com reportedly agreed to co-branding online shipping services and a tracking manifest system that allows customers to select tailored shipping systems. The deal also calls for iShip.com to develop a customized Web-based manifest system for MBE centers.

Investing in the Future

“With these investments in technology, MBE will be positioned to play a leadership role in the explosively-growing e-commerce area,” U.S. Office Products CEO, Charles P. Pieper said.

The company has been seeing its fortunes rise through its online expansion. eBay announced in April a five-year agreement with MBE and iShip.com that calls for an integrated system for e-commerce shipping. The world’s busiest auction site generates some 100 million packages annually. The share price of MBE’s parent company went up 45% after the announcement of the eBay deal.

Last fall, MBE worked with IBM and Infoseek to open MBE Online, a site offering services to small businesses. In addition, the company is working with DigitalWork to introduce a Virtual MBE center, which is designed to offer small businesses with customized tasks like researching their competition, finding employees or marketing their products.

No Return To Sender

MBE has proven to be one of the more innovative companies to come down the pike – both paved and online – in some time. Founded nearly 20-years-ago, it has developed a substantial international presence, a franchised bon vivant of the shipping world.

There are 3,000 MBE centers in the U.S. — some 2,500 of which the company plans to have wired into a unique satellite technology developed by Hughes Network Systems by next fall. Outside the U.S., 700 MBE centers are licensed in 29 countries. The company says it plans to have agreements drawn up for the MBE concept in 60 countries. Countries such as Canada, Singapore, Venezuela, Australia and Saudi Arabia, already on the MBE map, were joined last month by Japan and Austria.

MBE’s CEO made it a point to stress the importance of his company’s investment in new technology, saying that getting all the centers wired is crucial to the company’s Internet business strategy. Calling his company a groundbreaker, he said the new technology is an outreach of the company’s mission to make life easier for its customers.