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52 DC VELOCITY JULY 2015 www.dcvelocity.com
managing director, said the company made Flexe its sole
warehouse partner after running out of space in its own
facility and growing tired of competing for a fixed amount
of excess capacity made available by its former vendor, a
3PL. The problem was especially vexing during the holiday
season when True Fabrications generates about 40 percent
of its revenue and its demand for warehouse space spikes.
Agarwal also saw little value in committing to a fixed
long-term lease when it was impossible to predict where
his business would be by the end of the contract term. Add
to that the millions of unoccupied square feet available in
the Seattle market, and, to the company, the move was a
no-brainer.
Agarwal said the Flexe model offers True Fabrications a
wide range of warehousing options at a competitive price.
It can view its nationwide inventory flow from a single software platform. Rather than building and operating a larger
warehouse of its own, True Fabrications leverages other
people’s space and shifts around labor and inventory when
it’s needed. “The cost that [the platform] is showing to us
is similar to what it would cost if I had my own warehouse,
only I don’t have to sign a lease,” Agarwal said.
A NEED FOR FLEXIBILITY
Karl Siebrecht, Flexe’s co-founder and CEO, is an IT guy
and not a warehouseman. So he came at the issue from
a different perspective. Siebrecht discovered that virtually
all warehouse space came to market in “big fixed chunks”
and as part of long-term leases. Even subleases rarely ran
less than a year, Siebrecht found. At the same time, mil-
lions of square feet nationwide sat unused and burned up
capital. Providers of space, he reasoned, would rather have
some cash flow for their assets than none at all, and would
be willing to structure deals of a short-term and flexible
nature.
Meanwhile, users who find themselves short of capacity
for any number of reasons, or perhaps want to capitalize
on a quick-hit opportunity in a market, would want a bit
of warehouse space for a short-term ride. Bringing surplus
capacity to those who needed it fast seemed to be a natural
fit, Siebrecht believed.
It is impossible to quantify how much warehouse space
across the country is unoccupied on any given day. Flexe
last spring conducted a survey (albeit from a small sample
size) of businesses that operate as users and providers of
space. About 20 percent said they “always or often” needed
warehouse space on short notice, while 60 percent answered
that they needed it “sometimes.” In addition, 40 percent
said they frequently have excess capacity available.
Not everyone is enamored of the concept, however.
