📖 The Future of On-Demand Storage (Idea #1)

⚾The Elevator Pitch

Leveraging flat pack shipping containers to start a low-cost, on-demand storage company

🤝Introduction

Most of you know PODS – the on-demand storage company that places containers in front of homes and businesses - they look like this:

PODS are sturdy, well-manufactured, and weather proof. Given the size of these containers, PODS developed an innovative truck to make the pick-up and drop-off of these PODS containers very easy:

But…. PODS can be expensive. The pod itself can cost around $100/week*, and each individual pick-up and drop-off can also cost around $100*. You could be looking at north of $500/month* to rent a container from PODS or a competitor.

From a business perspective, on-demand storage is very appealing. While there are high up-front costs (including manpower) to drop off and deliver the containers, it is an otherwise passive business. This got us thinking – could a cheaper alternative be developed? What if these huge trucks and devices were not required? That appears to be one of the largest costs for PODS and their competitors.

*Estimated costs - not exact

 💡The Idea

Our idea this week is a low-cost PODS alternative. It consists of Flat-Pack Shipping containers that can be towed on a trailer and assembled within minutes. See a sample image of one below:

We’ve also added an example of assembling these containers HERE

We propose to:

1. Buy these shipping containers

2. Tow them on a trailer to homes or businesses that require the storage

3. Assemble them on-site

4. Charge installation and rental fees to make money

👷The Work

To start the business, you will need the following:

• A minimum of 2 workers to assemble the containers

• A trailer of size for the shipping containers

• A car/truck capable of safely towing the trailer

After getting comfortable with assembling the containers and transporting them, you can market yourself as a cheap PODS alternative. You could work with homeowners and businesses to arrange the drop-off and pick-up dates of the container.

On drop-off day, you would load the shipping container disassembled as a flat-pack onto the trailer and bring it to the client’s home/business. Upon arrival, you will assemble the container wherever they would like for it to go. Then you would leave and not come back until pickup is required. Of course, additional moving services could be offered if needed.

💸 The Finances

Expenses:

• Storage Container: $3,000 - $4,000 (New)

• Trailer: $3,000 - $5,000 (New)

• Manpower – 2 men, $25/hr each

• Gas/Transportation costs

Revenue:

• Pickup/Drop-Off Fee - $50

• Weekly rental fee - $50

• Additional moving assistance - $40/hr

Assumptions:

• You buy 3 containers and 1 trailer to get started (~ $14,000)

• You move the containers yourself along with someone else you hire

• 2 out of the 3 containers are always in use, 1 is on stand-by if needed

• You spend $100/month in gas

• You already have a car/truck capable of towing the trailer and container

• Each pickup/drop-off takes 1-hour as you work locally at first

• You do on average 6 pickups & drop-offs a month (72 total in a year)

• You assist with moving on 50% of pick-ups and drop-offs

The Math:

• Initial investment: $14,000

• Yearly revenue:

  • 2 containers in use per week - $100 x 52 = $5,200

  • 72 pickups/drop-offs - $50 x 72 = $3,600

  • Moving assistance - $40 x 36 = $1,440

• Total Revenue - $10,240

• Yearly Expenses:

  • Manpower - $25 x 72 x 1.5 (For moving) = $2,700

  • Gas - $1,200

• Total Expenses - $3,900

• Year 1 Profit - $6,340

It would therefore take slightly over 2 years to pay off the initial $14,000 investment. From that point, you could continue to scale the business to more containers and better equipment.

👍The Good Stuff

• Smaller Investment Storage Business - Could be started for <$10k if you buy 1 or 2 containers.

• “Passive” Income – The business could be mostly passive if you choose to hire a team to transport and assemble the units.

•  Low Barrier to Entry - You could literally get started tomorrow if you wanted (buying the trailer and truck)

👎The Risks

• Liability Concerns – Most of these containers come with locks and are designed to be weather proof. But what if they are broken into? What if water gets in and damages what is contained inside?

• Permitting Issues – This needs to be investigated further, but you may face permitting issues if the PODS need to be placed in the street and not directly on the client’s property.

• Unexpected Costs – Repairs of the containers, truck, and trailer.

• Scheduling Concerns – The containers will typically be used for at least a week. What if all of your containers are in use for an extended amount of time and you are unable to meet demand? Buying additional containers is expensive.

📚For the Road

• Some alternatives to PODS

• How self-storage came back during COVID

• Self-storage statistics