Flexe finds spare warehouse space for e-commerce merchants

Great problem they&#x27;re tackling. Some issues:<p>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.<p>They don&#x27;t own their warehouses. This can be an issue if something <i>goes wrong</i> (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&#x27;t have proper operational controls and can stay wrong for days (months even!) if a warehouse doesn&#x27;t have a proper support team. Since they don&#x27;t own the warehouses these issues are difficult to control for.<p>There&#x27;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&#x27;t listed on Amazon.

&gt;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...<p>This comparison is extremely misleading. Amazon either leases or outright owns their warehouse space and thus has total control over it. But Flexe&#x27;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.

The big opportunity here isn&#x27;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.

So - do they get bought or crushed? I feel like it&#x27;s a 50-50, but that&#x27;s more on my gut than out of any particular insight.

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&#x27;s so hard to compete with that infrastructure without a service like this.

Darkstore is another startup thats claiming to provide warehousing&#x2F;delivery&#x2F;fulfillment services utilizing unused spaces at malls, etc.