Individual Item Transportation & Storage

Summary:

At the end of each school year, many students throw away perfectly good storage units, furniture, and other common dorm items. Others are forced to transport heavy or awkward items back to different states or distant cities in North Carolina, sometimes requiring multiple cars or a small moving vehicle. To solve this issue, a new storage service could pick up and store individual or groups of items for a variety of costs. This company would provide item transportation and tagging with an expected return date to best organize customers’ items and expedite returns at the end of the summer.

Market:

The market would be primarily college students living in dorms and houses. The firm could be piloted in Chapel Hill, but easily expand into the Triangle with time. UNC, with an undergraduate population of 18,000 and a graduate population of about 11,000, would provide a large number of customers, especially considering 18% of UNC's students are out of state. Most of these students live in rented houses and dorms, providing a large potential market. Further research would be necessary to find the exact number of students needing storage, but the model could be scaled up or down accordingly. The firm could then expand relatively easily to include other colleges in the area and take advantage of economies of scale after piloting the idea at UNC.

Competition:

Currently, many firms compete to sell large storage spaces in this area, but very few deal in individual item storage and include transportation. I only found one U.K. company and one U.S. company in this sphere. The U.S. company’s website did not have areas served and also had high prices, indicating there is room in this market. On campus visibility, competitive prices, and personal service should easily differentiate this firm from self-storage facilities and other college storage options.

Financials:

There are a options for pricing models, but the easiest options would be a simple cubic foot cost or an item by item cost breakdown. Assuming we used a cubic foot method, our total cost for the summer months would be roughly $0.177 per cu. ft. at an average self-service storage facility. If we charge $1 per cubic foot of space, we could make about $2500 in profit with only one standard storage unit.

Furthermore, by charging a small fee for transportation below a certain dollar amount, we could minimalize the impact of operational costs. If only 1% of UNC’s population was interested, the company could easily net around $23,500 in profit over one summer.

On a larger scale, with over a million people just in the Triangle area, this company could easily make around $500,000 a year, assuming 1 of every 100 people used the service and spent on average $80. This model builds in variable costs and assumes $300K in fixed costs (utilities, legal fees, insurance, rent, etc.)

The specific fees associated with this business may need to be adjusted upon further research, but the basic premise should hold. As the company expands, profit margins should increase as the firm develops its own storage locations. The firm could also expand its services to product resale and purchase items from students to sell back the next semester.