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New Business- Cheap Warehouse Space for Everyone

 I am starting a business that caters to e-commerce companies. Providing product receiving,warehousing and distribution.Outsourcing this function will hopefully make my clients much more profitable and enable them to grow without the need to lease or buy expensive real estate in their local area. The warehouse will be somewhere in the midwest  and this service will allow people to warehouse inventory for definitively cheaper than they could in most urban markets, use space according to their needs rather than a ridgid lease or purchase scenario, and for a much more flexible time frame. The business would essentially be a wharehouse co-operative or 3rd party logistics company for small to medium businesses that have grown out of their garage or home and don`t mind outsourcing this function.
Any advice or critique is very appreciated.


  • DannyboyDannyboy subscriber Posts: 0
    I founded a fulfillment company in the NorthEast, Rapid Fulfillment, Inc.  You are right about the services being very benefical to the e-commerce world.  Starting this type of business is a long, expensive journey, but well worth it if you go about it the right way from the beginning.  My advise to you is to check out an organization called MFSA (Mailing & Fulfillment Service Association), they offer conferences and local meetings that will be able get you started in the right direction.  They have proven to be an invaluable partner in my business.
    Good Luck,
  • basinetbasinet subscriber Posts: 1
    Thanks so much for the feedback
    I want to tailor this company to appeal to companies in expensive urban  and suburban locals. I am in San Diego,Ca up on a hill looking at the Pacific, great place to live, near impossible to start and run a profitable business that involves real estate and employees.  My goal is to provide say  500 square feet and up of  dedicated warehouse space for these e-commerce companies for approximately $125 per month and up. The emphasis will be on  receiving and warehousing with the client primarily dealing with their customers. I will be able to receive a pallet of product or a shipping container, or 10.  If a customer sees an opportunity for buying a closout of merchandise from a competitor, they now can. If they can get a substantial discount for buying a whole container of raw material or parts from china they now can. All this without needing to lease or buy very expensive space in their local. For someone operating out of their apartment or garage, I want to give them the boost to the next level. What someone gives up in having their product far away from their location, hopefully they more than make up for in cost savings. I want to allow business that can not expand past the infant stages, a chance, for the price of a couple of cel phones. Also for 25% to 50% the cost of a mini-storage unit, which they cannot work out of typically.
    I am trying to tailor this busines to appeal anyone in Start-Up Nation. Any referals, ideas, or feedback is awsome for me.
    PS.. how do I link this to "Strategies & Tactics for Getting Efficient"
     basinet2007-2-6 13:29:10
  • basinetbasinet subscriber Posts: 1
    Thank you for the feedback
    Your website and advise are great
    Like I said above, I want to tailor this company to appeal to entreprenures in expensive urban  and suburban locals. I think primarily Start-up`s that cannot afford to buy or lease warehouse space without it destroying their profit margin. Companies that are too small to yet need your wide aray of services. A couple of hundred dollars a month for the guy who sells antique Juke Boxes but can`t receive or store them in New York City. A start-up clothing manufacturer who needs to buy a shipping container of fabric but cant receive it at her apartment or store it without going broke in Los Angeles.
    Thanks much for your imput, I would love to hear more about your business and how you price your services, and any ideas, concerns or resources you may have about what I am trying to accomplish.
    Advice Anyone....... Please....Thanks
  • basinetbasinet subscriber Posts: 1
    Thanks for the feed back
    I would love for the business to be next to my house in San Diego or I even have business in Long Beach an hour away. However The cost of real estate is so prohibative that it destroy`s the numbers. I was a Real Estate analyst for many years for accounting firm and I am currently a real estate broker. What I am trying to do is provide the lowest possible cost for Start-up companies to have Space without going broke. The cost of real estate, labor and regulations strangle most ventures in California and I believe in most major Metros.  To start off with, the facility I am opening will be inthe middle of the country. Bad for international  receiving  (Ports) but central once it gets there and (oh so much cheaper). I want to provide this space for hundreds (not thousands) of dollars, and receive a slight mark-up on handling (receiving and distribution).  My customers could be anywhere and their customers could be anywhere nationally or internationally. Eventually I could expand to more expensive space in a port city, but my intial venture I believe needs to compete by providing this service as cheaply as possible. I`m not sure how much business will come domestically or internationally. Once the product comes to me the customer will not go broke if these items sit on the shelf for a while and their customer will be paying for the shipping to the final destination. One gentleman I spoke with receives military "stuff" from former soviet countries. If he receives a shipping container of "stuff" it is extremely cheaper than by piecemeal. He then goes and sells these items over months and years on e-bay. He lives in an apartment in boston and although they have a port, it would cost him more to recseive and store these items than it would be worth.
     (Insurance) I have had a self storage facility in the past an the tenants can either put the items on their own insurance policy or a policy can be purchased for a nominal amount.
    I think something like your microwave example may be hard to make work, especially in the age of Wallmart. This I think is more like custom motorcycle wheels at $300 each and the handling fee at $10. to cover my employee`s time. The employees time is will also cost significantly less in the mid-west.
    Again I still working out the kinks.
    The warehouse will be cheap basic storage probably hot in the summmer (no ice cream) and cold in the winter.
    For the Start-up that stops because the costs seem insurmountable, I want to be their partner to help make it work on a shoestring budget.
    Your questions and imput are great and your background in trade is fantastic. Let me know if you or anyone you know has ideas.
    Thanks Mucho.
  • basinetbasinet subscriber Posts: 1
    Thanks for the imput
    I envision the products received and stored will be larger ticket items both size and price over $50  and the client can send them to me already packaged or I can do light assembly/packaging.  Again cheaper in the mid-west than in big cities. The client will tell me what is comming, sign a storage contract for the amount of space needed, I will receive it, warehouse it  and await instructions. Send them a portion of total shipment,ok  ...package and ship 100 items to the following retailers ok  ...package and ship 1 to this person ok. Anything they want. My client maintains the customer relationship and makes the promises. I do what ever my client wants. The only difference is, if the product was in Los Angeles with my client, the warehouse would cost 3 times as much and the employee twice as much. The only promise I am making is to my client (the small Start-Up) Someone will be there to receive product, store safely, ship out to whomever whenever.
    All question appreciated , Thanks
  • ShipwireShipwire subscriber Posts: 0
    Good idea basinet. 
    We expanded on it at shipwire.com
    We put warehouses all over.  LA, Chicago, Reno, Vancouver, Toronto, and the a new warehouse in the UK that breaks open Europe.
    Our ecommerce fulfillment pricing is online (B2C).  B2B wholesale and retail compliance is slightly different.
    Business pay on a usage base and we did a free trial
    We also plug into most ecommerce software.
    w/ ShipwireShipwire7/24/2008 6:50 PM
  • azedgeazedge subscriber Posts: 1
    Amazon has a service similar to this which is free however you pay a percent when a product sells and they ship it to the customer.
  • GKGLLCGKGLLC subscriber Posts: 0
    I own a 50,000 square foot warehouse in the Midwest.  This facility sits near the I-80/I-35 corridor.  Close to the interstate and located on a US Hwy.  Chicago, St Louis, Kansas City, Minneapolis, Des Moines, and Omaha are all within 6 hrs. I currently have 26,000 square feet available.  Ammenities include loading docks, ground access doors, wireless internet, and office space.  Lease and labor rates are significantly lower here as we are located in a HUB zone which qualifies businesses to certain advantages that locate here.  The local Economic Development folks can give you detailed information concerning this program if you aren`t already familiar with it.  Does this sound like something you are looking for?
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