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'Ware-bnb': The Rise of On-Demand Distribution

With its dark, gloomy winters, Seattle is a good place to run a wine accessories store, especially during the holiday season. A few years ago, a wine-themed company called True Fabrications was doing well in Seattle - so well, in fact, that it was running out of space to store its inventory. The owners figured that, to get through their next holiday peak season, they would need another 2,000 to 3,000 pallet positions of capacity, but only for four to five months.

'Ware-bnb': The Rise of On-Demand Distribution

After shopping around at warehouse operators, the owners were disappointed to find that most were too expensive or wanted a minimum year-long lease and an upfront fee, or required them to give up control of their goods to a 3PL. But soon they stumbled upon a new startup called Flexe, which offered not part of a single warehouse but a network of warehouse spaces all around the region, and allowed them the flexibility to change the amount of space they leased as they needed it. The terms of the lease also enabled them to use the space for as little as six weeks or indefinitely, if they so chose.

True Fabrications ended up working with Flexe and saved about $170,000 during the busy fourth quarter, paying about 67 percent less than their next-best estimate: a nine-month lease at a conventional warehouse operator. And the company was never charged extra fees or up-front costs. True Fabrications decided to stay on with Flexe to continue using the “virtual warehouse” network and changing the amount of space they need, whenever they need it.

The wine retailer discovered what a lot of North American shippers and 3PLs are finding out — it is now possible to enjoy the benefits of a warehouse and complete fulfillment services without ever having to commit to a long-term lease or deal with the hassle of maintaining a distribution center. Much like the way Airbnb revolutionized the way consumers sought hotel accommodations, companies such as Flexe are quietly but steadily disrupting the warehousing market. Call it a “Ware-bnb” for the logistics community — pay for only what you need, when and where you need it, and then walk away.

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