Wednesday, 2024 February 28

This Malaysian startup’s profitability is dependent on our hoarding tendencies, and it’s working

Jessica and David Buri, a pair of twins hailing from Miri, Sarawak, founded Storage Bloc in early 2017.

It’s an on-demand storage startup that offers packing, pickup, storage, and delivery services for individuals and e-commerce companies.

Starting a business together had always been the siblings’ dream, but it wasn’t until after David finished his business degree in 2016 that they felt it was the right time to act on it.

While she was staying alone at their family home, Jessica would tell David about her struggles in finding space for her personal belongings, since their siblings left their valuables there despite having moved out.

When she jokingly told David that she wanted to look at storage units to rent, it sparked an idea.

After doing their research, they found the concept of valet storage as a viable business model they could afford to start.

Steady growth

Friends and family were quick to invest in their business, and the only loan the twins have taken out has been for their company van.

Courtesy of Storage Bloc via Vulcan Post.

David declined to disclose the amount of monthly revenue they earn, but proudly shared that they were now in the black.

Storage Bloc started off at Glo Damansara with a 3,000 square feet warehouse, but they moved to a new warehouse double the size upon reaching 100% capacity in the first one early last year.

A team of four (soon to be five) mans the warehouse and carries out the medley of services they offer.

They offer three kinds of storage:

  • Signature storage box: MYR 20 (USD 4.70) per month for one box, the more boxes you store the cheaper the rates, and it comes with insurance coverage up to MYR 1,000.
  • Bulky items storage: depending on size, pricing can range from MYR 19 to 32 per month.
  • Storage unit per cubic meter: MYR 44 to 300 per month, the more space you rent the cheaper it is.

Their signature storage boxes have a fixed dimension and are recommended for small, packable items like clothes, books, kitchenware, and the like.

Courtesy of Storage Bloc via Vulcan Post.

Bulky items can be classified into items that can’t fit a box, like luggage, golf sets, and couches. Meanwhile, storage unit per cubic meter is for those who already have their own boxes.

Both bulky items storage and storage units per cubic meter come with insurance coverage up to MYR 8,500.

Their one-time packing and transportation services come at varying prices, but for those doing e-commerce, Storage Bloc has an order fulfillment service starting from MYR 309 per month. This includes storage, picking, packing, and delivery.

A look inside the warehouse

If customers decide to do self-pickup or drop-off, they’re only allowed in the reception area, which is blocked off from the actual warehouse.

The inside of the warehouse is mostly filled with heavy-duty racks, which are sectioned and named.

Courtesy of Storage Bloc via Vulcan Post.

Every item that enters the warehouse is individually barcoded and placed on a rack based on availability, weight, size, and shape.

The location of said item is then added into Storage Bloc’s system.

“Each customer will receive an inventory list of their items’ barcodes and descriptions so they can keep track of everything they have with us,” David said.

“When retrieval is required, the customer just needs to let us know which barcodes they want retrieved, and it only takes minutes to locate the item and bring it out for them.”

Courtesy of Storage Bloc via Vulcan Post.

But what happens when a customer abandons their items?

Based on Storage Bloc’s T&Cs, if payment isn’t made within three months, they’ll consider the items abandoned (though they’ll still keep the items for about six months).

“We will put effort into contacting the customers, but if there is no response or payment made, we will have no choice but to seize the items for auction,” David said.

This is understandable, as any space taken up by abandoned items is money lost for the business.

There’s enough space for everyone

While Storage Bloc offers the A to Z package for one’s storage needs, it’s something that’s been done by TresGo and BEAM Space, whom I would consider to be their closest competitors based on service offerings.

From the information available online, I did a quick comparison of their services, pricing, and more.

Each startup has its own unique selling point, with Storage Bloc having the slight advantage of being more affordable. “We believe that with our rates, storage is not a luxury, but a commodity,” David told us.

But I still had questions about the business.

There’s been a rise in P2P item rental platforms like Borobear and Pinjamla in Malaysia, and I posed the question of how Storage Bloc would survive if fewer people owned items and thus would have no need for storage.

“This is a good point, however, we believe that there are still a few things that can’t be rented like beds, couches, and refrigerators. I would say most of the things that people store would not be something you can rent,” David answered.

“So, as much as we are able to minimize the need for certain non-essential items, people will still be buying things, hence, there will still be people who need storage—either personal storage or for their small businesses,” he concluded.

For now, their numbers do reflect that. 66% of their business still comes from individuals and small businesses who need storage for household items and documents.

Courtesy of Storage Bloc via Vulcan Post.

Meanwhile, 34% comes from e-commerce companies, but David definitely foresees business from these customers growing as the e-commerce industry grows.

What’s in store for the future?

“We’ve had over 500 customers come and go from our warehouse since our opening, and currently we’re storing for around 200 people and businesses,” he said, adding, “Our oldest customer who began storing with us in March 2017 is still with us now.”

With the support of their customers, Storage Bloc hopes to open a second location in the near future.

They’re also looking at diversifying their revenue stream, and David shared that they’re currently working on a model where people can rent their signature boxes per day when they move houses.

“We also hope to minimize the need for carton boxes by encouraging the use of reusable plastic boxes during moves. It’s better for the environment, it creates less waste, and in the end, it should be even cheaper!”

Bottom Line: Because the storage industry is rather saturated in Malaysia (a quick Google search can bring up about nine other players), I’d say the fact that Storage Bloc managed to hit 100% capacity in their first warehouse and is already profitable definitely came as a surprise.

This article first appeared in Vulcan Post


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