Why traditional logistics solutions fail to serve growing entrepreneurs

July 15, 2021

The good news: Your business is growing
The bad news: It’s growing so much that you’re running out of space.

Many companies that start in a home—or maybe in borrowed space—eventually reach a point where they simply don’t have room to store their products, not to mention assemble, kit, pack, and ship them.

But as thriving businesses search for space to accommodate growth, they often see the choice as between renting a self-storage unit and leasing a traditional warehouse. Increasingly, however, there is a third option: Renting a unit in a shared warehouse facility designed to support the needs of growing startups that produce and ship physical goods. 

Which is right for your business?

Here are the pros and cons of each option:


Self Storage Units

Often enough the only place entrepreneurs can find to run their business is a self-storge unit. This is fine to store extra merchandise in advance of holidays or other busy seasons. But it can be grim to work in a dimly lit rectangle, adjacent to lockers of unused furniture and ancient files. 

Pros
  • Many sizes available
  • Can be rented without long-term commitment
Cons
  • Not designed for daily shipping and receiving
  • Working in a locker may be prohibited
  • Unpleasant environment 
  • No equipment or support services


Traditional Warehouses

As they grow, most companies that deal in physical products eventually need their own storage and fulfillment facility. Large open spaces are available that can be upgraded to suit a company’s operations. And a well-designed loading dock vastly improves the efficiency of shipping and receiving. But young(ish) companies may not be ready for the cost and commitment of leasing their own warehouse.

Pros
  • Built with loading docks to facilitate shipping and receiving
  • Efficient when a large amount of space is needed
  • Flexible space for storage, light manufacturing, kitting, and shipping
Cons
  • Minimum size often much larger than growing businesses need
  • Requires long-term lease 
  • Fixtures, equipment, and utilities not included
  • Costly to build out space 
  • Rudimentary working conditions, often with limited heat and air conditioning


Shared Warehouse Space

If you merge the financial flexibility of self-storage with the logistics capabilities of a traditional warehouse—then add in the amenities and community of a modern office—you get a shared warehouse facility. Businesses can rent the amount of space required at the moment, knowing they can expand as sales increase. And they have access to everything they need from pallet jacks to espresso machines without having to buy any of it.

Pros
  • Multiple sizes available with flexible commitments
  • Rentals of fixtures and furniture available
  • Utilities and fast internet service included
  • Set up for daily shipping and receiving
  • Part-time labor available on demand
  • Comfortable working conditions, with temperature control, break rooms with coffee, and frequent cleanings
  • Community of other entrepreneurs
  • Access to facilities such as conference rooms, office space, and photo studios
Cons
  • There can be an upper limit on the space available.
  • Some facilities have become so popular they are sold out
  • Comparing just the cost of the space (and not services and equipment) can be more expensive per square foot


“A lot of companies aren’t ready to commit to 50,000 square feet for five years, and they don’t want to be in an industrial part of town in a run-down building with filthy bathrooms,” said Paul D’Arrigo, co-founder of Saltbox, a shared warehouse provider that caters to smaller e-commerce companies which recently opened locations in both Seattle and Dallas. “They’d rather do their fulfillment from a comfortable, clean building with fresh ground coffee where they only pay for the space they need now.”


About Saltbox

Saltbox is the Modern Warehouse for digital commerce companies. With our purpose-built network of flexible warehouses in major metropolitan areas across the country, we are powering the ecommerce economy and the next generation of entrepreneurs by democratizing access to essential operations and logistics infrastructure. From flexible and smartly designed warehouse and office suites to on-demand services like our Elastic Workforce, Fulfillment, and even photography studios Saltbox solves some of the most critical challenges ecommerce entrepreneurs face when starting, growing, and scaling their businesses.


Related Articles

How to Think About Funding for Your Business, with Jermaine Brown

July 29, 2021

Finally, a solution built for people and not just boxes

July 21, 2021

Invest in collaboration, community, and efficiency

July 19, 2021