4 ms·

Flexe finds spare warehouse space for e-commerce merchants

41 points by bilifuduo 9y ago

WaxProlix 9y ago
So - do they get bought or crushed? I feel like it's a 50-50, but that's more on my gut than out of any particular insight.
- ThrustVectoring 9y ago
  It's hard for me to see what their moat is. Having negotiated enough warehouse partners that retailers can expect to find space and warehousers can expect to get free space filled? That can get imitated with a lot of straightforward work in local geographic areas, and if customers are spending enough money to make it worthwhile, they can make the physical back-end interchangeable. There's also many buyers that make sense for the company, too. From "make it easier to build a business" things (like Stripe), to "we have a bunch of warehouses and could synergize with usage & market data".
thefalcon 9y ago
This is exactly what smaller e-tailers need in order to begin to be able to compete with Amazon -- most of them eventually learn that they have no chance if they try to actually rely on Amazon as their primary platform, but it's so hard to compete with that infrastructure without a service like this.
elvirs 9y ago
Darkstore is another startup thats claiming to provide warehousing/delivery/fulfillment services utilizing unused spaces at malls, etc.
- thefalcon 9y ago
  Looks like Darkstore is offering full 3PL
desdiv 9y ago
>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... This comparison is extremely misleading. Amazon either leases or outright owns their warehouse space and thus has total control over it. But Flexe's 25 million square feet are just listings; the property owner, not Flexe, has control over it, and if a better marketplace comes along they might choose to leave Flexe and list somewhere else.
Dwolb 9y ago
Great problem they're tackling. Some issues: Splitting inventory is an expensive activity. Often times you need to purchase more overall inventory and incur more warehouse receiving cost when you try and divvy up your stock around the country to decrease average shipping times. They don't own their warehouses. This can be an issue if something goes wrong (eg they lose track of a large portion of inventory). Often warehouses hire temporary and low-trained workers. Things can go wrong if the warehouse doesn't have proper operational controls and can stay wrong for days (months even!) if a warehouse doesn't have a proper support team. Since they don't own the warehouses these issues are difficult to control for. There's some competition in the space like Shipwire owned by Ingram Micro (who also lease space to Amazon). Also I believe you can use Fulfillment By Amazon (FBA) to fulfill customer orders even if an item isn't listed on Amazon.
petra 9y ago
The big opportunity here isn't serving the US, a place already well served, with though competition from Amazon, but creating a platform to serve smaller countries, without fulfillment infrastructure services or with a weak one, , earning margins closer to an e-tailer margins than a warehouse supplier, and with the possibility, since the country is small with fewer competitors - maybe manage to carve out a long terms table position.

41 points by bilifuduo 9y ago

So - do they get bought or crushed? I feel like it's a 50-50, but that's more on my gut than out of any particular insight.

ThrustVectoring 9y ago
It's hard for me to see what their moat is. Having negotiated enough warehouse partners that retailers can expect to find space and warehousers can expect to get free space filled? That can get imitated with a lot of straightforward work in local geographic areas, and if customers are spending enough money to make it worthwhile, they can make the physical back-end interchangeable. There's also many buyers that make sense for the company, too. From "make it easier to build a business" things (like Stripe), to "we have a bunch of warehouses and could synergize with usage & market data".

thefalcon 9y ago

This is exactly what smaller e-tailers need in order to begin to be able to compete with Amazon -- most of them eventually learn that they have no chance if they try to actually rely on Amazon as their primary platform, but it's so hard to compete with that infrastructure without a service like this.

elvirs 9y ago

Darkstore is another startup thats claiming to provide warehousing/delivery/fulfillment services utilizing unused spaces at malls, etc.

thefalcon 9y ago
Looks like Darkstore is offering full 3PL

desdiv 9y ago

>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... This comparison is extremely misleading. Amazon either leases or outright owns their warehouse space and thus has total control over it. But Flexe's 25 million square feet are just listings; the property owner, not Flexe, has control over it, and if a better marketplace comes along they might choose to leave Flexe and list somewhere else.

Dwolb 9y ago

Great problem they're tackling. Some issues: Splitting inventory is an expensive activity. Often times you need to purchase more overall inventory and incur more warehouse receiving cost when you try and divvy up your stock around the country to decrease average shipping times. They don't own their warehouses. This can be an issue if something goes wrong (eg they lose track of a large portion of inventory). Often warehouses hire temporary and low-trained workers. Things can go wrong if the warehouse doesn't have proper operational controls and can stay wrong for days (months even!) if a warehouse doesn't have a proper support team. Since they don't own the warehouses these issues are difficult to control for. There's some competition in the space like Shipwire owned by Ingram Micro (who also lease space to Amazon). Also I believe you can use Fulfillment By Amazon (FBA) to fulfill customer orders even if an item isn't listed on Amazon.

petra 9y ago

The big opportunity here isn't serving the US, a place already well served, with though competition from Amazon, but creating a platform to serve smaller countries, without fulfillment infrastructure services or with a weak one, , earning margins closer to an e-tailer margins than a warehouse supplier, and with the possibility, since the country is small with fewer competitors - maybe manage to carve out a long terms table position.