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Startup finds way to reach customers faster

by KC SmartPort Intern | Jun 06, 2017

Online merchants are looking for new ways to reach customers quickly but have few options that match Amazon’s speed. Flexe, a Seattle startup, plans to fix that problem by offering online merchants overnight ground delivery to nearly anyone in the country.

Bloomberg Technology recently reported “in less than five years, Flexe has created a marketplace of spare storage space in 550 warehouses, quickly establishing better geographic coverage than the vast delivery network that Amazon.com Inc. spent decades and billions building. Flexe did it without spending a nickel on facilities and already has 25 million square feet of storage, about 25 percent of Amazon’s capacity, and expects to add 10 million square feet this year. Merchants book storage space via a simple-to-navigate website; Flexe is essentially the Airbnb of warehousing.”

Due to inventory being located in numerous locations around the country overnight deliveries can be made by truck rather than plane, which is cheaper.

"You can get goods to your customers as fast or faster than you can through Amazon Prime at a competitive price and it’ll show up in your own branded box rather than an Amazon box," says Flexe co-founder Karl Siebrecht. "That is very important for companies looking to build brands."

According to Bloomberg, the increase in online shopping is straining warehouse space around the U.S., pushing the vacancy rate to the lowest level in 17 years. Flexe is using space that is tied up in long-term contracts, but going unused for months at a time. “Beverage companies and home-improvement stores build warehouses with capacity for the summer months when their business peaks, leaving them with extra space the rest of the year. Warehouses operated by Halloween costume wholesalers empty out just as the holiday shopping season hits and most retailers need more space. Flexe is arbitraging the mismatch between supply and demand, taking a commission for each transaction,” reports Bloomberg.

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