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Concept provides smaller online retailers with flexible warehouse space terms to fulfill shipment orders.
Saltbox, a last-mile warehouse coworking company, recently raised $10.6 million in a round of Series A funding, Bisnow reports. The company is addressing a growing issue in the e-commerce retail industry—there’s more need for last-mile delivery capability than there are facilities. Saltbox opened a 66,000 square foot location in Dallas in March after debuting its last-mile coworking concept in Atlanta last year. The company plans to open eight coworking warehouses throughout the United States in 2021, according to Saltbox co-founder Tyler Scriven.
How Saltbox works
The process that has made coworking offices popular has done the same for Saltbox, according to Bisnow. The company offers monthly memberships to customers so they can use a part of the physical building for their e-commerce operations. Saltbox sites include private phone booths, cafes with coffee and snacks and puts on weekly community events for its members. Additionally, Saltbox lets members use its photography studio and on-demand labor services where customers can work directly with Saltbox to handle order shipments.
Saltbox has opened the door to many smaller online retailers that otherwise would not be able to sign a traditional warehouse lease.
“There are hundreds of thousands of small businesses today who have really been pushed to the fringes of the commercial real estate ecosystem,” Scriven told Bisnow. “You very clearly come to see there’s a very significant underserved market here.”
Saltbox enters management contracts rather than direct leases with partners who own the physical location. According to e-commerce research firm Pipecandy, there are more than 350,000 online retailers in North America and 88% of them earn less than $1 million in sales a year. More of these companies need flexible warehouse space. Brad Wright, CEO of Chunker, which helps warehouse tenants sublease their space, told Bisnow that requests have increased during the last six to nine months.
Saltbox meets smaller e-commerce retailers’ need for flexible terms
The last-mile coworking space concept is ideal for smaller e-commerce retailers because the more industrial landlords often can’t meet their needs. The, “mom-and-pop” tenants typically need short-term leases and a lot less space than typical warehouse landlords offer. Many smaller online retailers only need between 500 to 3,000 square feet for their operations, according to Wright.
“In the world of warehousing, when Amazon is building million-square-foot distribution centers with 75-foot ceilings, 3,000 square feet is really small,” Wright told Bisnow. “The traditional industrial space is not modeled to do any type of short-term deal at all. On the other hand, those customers are a perfect customer for a model like Saltbox.”
Going forward, Scriven sees a growing market for the co-warehousing industry throughout the U.S. Saltbox is looking to expand in Denver, Seattle and Los Angeles with an average building size of 60,000 square feet.
“It is not as though we will have one Saltbox in Atlanta,” he told Bisnow. “We will have many over time,” he said.
Joe Dyton can be reached at [email protected].
The post Last-mile warehouse coworking company Saltbox raises $10M for expansion appeared first on Connected Real Estate Magazine.