Go for Mobile

Portable storage units add flexibility, profitability to yourbusiness

By Amy Campbell

Witha self-storage facility seemingly on every corner, standing above the crowd is achallenge in this industry. Offering ancillary products such as packingmaterials or free use of a company-owned moving truck has become commonplace.But there's another growing trend in the industry that takes the self-storageconcept one step further: mobile storage. Whether offered as an ancillaryproduct or used to expand an existing facility, mobile storage embodies the onething everyone is looking for: convenience.

A New Market

"Three years ago, when we first introduced mobile storage, we wereeducating people about what the service is. Now, we find more of the people whocall us already know what it is, so we're doing more selling of our containersthan of the whole concept," says Dustin Deal, sales manager for KontaneInc., maker of the HomePak, a wooden mobile-storage container.

Originallypromoted as home- storage containers, mobile storage has recently been embracedby the self-storage industry as an ancillary product and marketing tool."It's a market in the beginning stages that's really getting ready to takeoff," Deal says. Simply put, it's storage that comes to the customer. Inthe average scenario, a self-storage customer rents a truck, fills it, drivesacross town to the storage facility to unload, then returns the truck. Withmobile storage, the container is delivered to the customer, who then packs itand uses a personal lock to secure it. When the container is full, a driverreturns it to the warehouse for storage. The self-storage operator makes moneyby charging a rental fee on the container.

The customer-friendly concept is convenient, Deal says. "Now customersdon't have to go out and rent a truck, try to pack all their items in it andmove it in one day. Their other option is to go to a professional movingcompany, which is obviously not a cheap thing to do. Mobile storage liessomewhere in between," Deal says. "It takes the truck driving out ofthe process, but allows customers the option of packing the containersthemselves. A lot of people feel more secure packing their own items. That's oneof the main selling points."

TimRiley, founder and CEO of Washington-based Door To Door Storage, says themobile-storage market is still in its infancy. "It's much like theself-storage business was in the early 1970s, where there was a lot of productbeing built but the consumer hadn't figured what it was."

Mobile storage is another way for a self-storage operator to expand hismarket, says Chris Havener, president of Havener Enterprises, maker of the ProBox storage vault. "A lot of companies look at adding truck-rental lines.But when you're a dealer for U-Haul, you're doing the work and they're makingthe money. This is another option," he says.

Box Trotters took the home-delivery storage concept one step further. TheSouth Carolina company delivers containers to the customer, then arranges forthe containers to be shipped across states via intermodal stack train."It's actually a very high-quality method of transport and it's veryeconomical," says company President Henry Cox. "Everyone is concernedabout energy consumption and conservation these days. The fuel costs for therailroad are typically much lower than trucks, so it can be cheaper dependingupon the shipment."

Box Trotters offers self-storage operators an alternative to purchasing andstoring containers by enabling them to become agents. "We've been getting alot of inquiries from mom-and-pop self- storage operators," Cox says."Because they don't have the resources Public Storage and Shurgard do, theyhave no ability to sell the service. This gives them an opportunity to competewith those companies with very little investment. We support them with all themarketing, the brochures, the website enhancements. It basically is an adjunctto their existing self-storage operations," Cox adds.

The Box

Justas there are a myriad of self- storage facilities to choose from, there is alsoa variety of storage and shipping containers. Over the years, family-owned andoperated Seattle-Tacoma Box Co. has designed 16 models of mobile-storagecontainers. "We went through quite a few before we found one that workedwell," says Jake Nist, whose family has been making storage containerssince the 1950s. "We've found a design customers seem pretty happy with,and they're withstanding the pickup-and-delivery and warehousing process prettywell."

Seattle-Tacoma's most recent invention is a cardboard, one-way container."Basically, it gets shipped from point A to point B and gets disassembledat that end," Nist says. "It's allowed mobile- storage people toservice more than just their local area. Now, they're able to move someone frompoint A to point B without having to worry about getting their containersback."

James Wayman, owner of Store to Door in Woburn, Mass., also sells a one-waystorage container. The 8-by-5-by-7.5-foot box holds one-and-a-half to two roomsof furniture and up to 2,000 pounds. "The One-Way is self-contained, has nohardware and an all-weather, plastic sealer over it," Wayman says. It comesin an easy-to-assemble kit and costs less than $150. The container gives self-storage operators an alternative to the standard shipping vault. "It's justlike selling supplies. You sell boxes for $8.95 or you sell a wardrobe box for12 bucks. You can sell them the One-Way moving box to put their whole apartmentin for $150 to $200," he says.

HavenerEnterprises once used wooden boxes for its 250,000-square-foot warehouse."But we didn't like them," Chris Havener says. "You had to coverthem. They leak. They weren't as durable. So we started building the metal boxesfor our own use." Havener now markets the Pro Box, a 5-by-8-foot box thatcan be assembled in 30 minutes. "The biggest advantage to our box is youdon't need a cover for it and it's very durable," Havener says.Self-storage companies can also use the box as a marketing tool by slapping amagnetic sign on the side when it's out of the warehouse.

Kontane has found its product, the HomePak, a great success, partly becauseof it's versatility. The 7-by-5- by-8.5-foot container is constructed ofexterior-grade plywood and a moisture-proof plastic lumber base that cannot rot,split or splinter. The HomePak also has a roll-up door and vinyl cover, makingit ideal for storage use or as a moving tool. "It's a convenientconcept," Deal says. "Once people try it, they like it."

From wood to steel to cardboard, the type of container you choose depends onseveral factors, including the purpose of the container, cost, equipment neededand available space. Many companies, such as Kontane, offer lease-to-ownprograms. Other products, such as the one-way containers, cost considerably lessthan wooden or steel vaults that average around $300. Unfortunately, mostcompanies don't have a chunk of money to invest in containers and equipment.However, there is another avenue to consider. "You can start off on a smallscale with 10 or 20 containers and work your way up," says Tom Moore,general manager for Florida-based Jacksonville Box and Woodwork Co.

Getting Started

Thekind of equipment you will need highly depends on your facility, your existingequipment and the services you want to offer. For example, the one-way vaultsonly require storage space, whereas purchasing wooden or steel vaults will callfor space and equipment. "Self-storage owners, if they're going to offermobile storage, really need to research what all this entails," Deal says,keeping in mind that many self-storage operators are starting from ground zero."Obviously, most of them don't have a truck. They would need some kind offlatbed truck to deliver the containers. And then they would also need thecontainers."

Start-up costs vary but can reach as high $2 million and are largelyundefined in this market. "If you're looking at getting into this business,make sure you have plenty of capital. There's not a lot of off-the-shelfequipment," Riley says. In addition to the storage containers, a flatbedtruck and forklift are necessities for moving and transporting vaults. There arealso space considerations to hold the containers and equipment. "You needto consider the warehouse space. Are you going to lease or are you going to ownit?" Riley asks.

Pricingis another factor. "Don't underprice the service," Riley warns."I see a lot of people try to come in and price at the low end and chargeself-storage rates. You need to charge double what self-storage rates are in aprevailing market." A 30 percent to 40 percent markup is reasonable, Rileysays. "A lot of the costs that don't exist in the typical self-storagemodel do exist in this model. You've got a lot more labor, for one. Inself-storage, you have one to two bodies to run a site. In our business, itcould be up to 10."

Keeping the container to the industry standard of 5 feet wide by 8 feet deepby 7 feet tall, with a door on the end and a hinge on the left, could be a costsavings, Riley says. "There are huge benefits to standardizing thecontainers. One reason is you can share containers with others." The sizeof the containers really doesn't influence a customer, he adds. "Everybodyseems to think, 'If I just had better containers than brand X or Y, I would getall the customers.' Well, it doesn't quite work that way," Riley says."It's a people business. They buy from people--it's not because you've gota great container."

Taking a Risk

Thestart-up of a mobile-storage operation doesn't end after you purchase containersand equipment. "One caution to anyone getting into this business is heneeds to promote the product and service well. In most areas of the country, themarket is still underdeveloped," Deal says. A simple Yellow Pages ad won'tbe enough, he warns. "For self-storage, that's what they're used to doing.That's what they've done for years. Everybody knows if you need storage, you canlook in the Yellow Pages and you'll find tons of ads in there," Deal says."You can't do that with this because people don't know what they're lookingfor yet. It takes more of a hands-on approach in the market." Deal suggestsforming key relationships with apartment managers or realtors in the area,direct mailing to people living in apartments or other interesting marketingideas.

In other words, self-storage operators should take a proactive approach, Nistsays. "You want to have a solid plan of attack, and a good business andmarketing plan." Without them, seasoned operators say, it's unlikely mobilestorage will become a viable commodity for your business. "The businessmodel for this part of the industry is not yet proven like the self-storagebusiness model," Riley says. "This business model is new and still inthe research and development stage. Basically, that means you're at your ownrisk."

Although it's not an established market, Riley says the promise is there."Customers love it. That's the bottom line. The next thing is now that theylove it, can we make any money at it? That's still to be proven," he says."The fascination and motivation for those involved in the business today iswe know customers like it. We're all racing to prove a business model. And ifyou want to enter that race, just understand the stakes are high." But forforward-thinking self-storage owners, it's worth the gamble, Riley says."It is definitely a niche that will absolutely be in the storage business10 years from now. No question in my mind. There's just too much going forit."