Although personal and domestic items continue to dominate the use of self storage facilities in Singapore, the concept is growing in the minds and hearts of business owners, particularly for Small and Medium Enterprises (SME).
The Self-storage Association of Asia[SS1] revealed that majority of business owners turn to self-storage as a critical cost-cutting strategy. Others make this move as a consequence of the nature of their business.
Here’s why more SMEs in Singapore are turning to self-storage:
Commerce Has Changed
In the face of a progressively challenging business environment, more start-ups are opting for home offices and existing firms are going for the e-commerce model as opposed to the traditional brick and mortar premises.
Start-ups and other SMEs find it more cost-effective to move their dealings to online platforms as compared to operating a physical store. Moving products online is great, but where does the merchandise go? An innovative work and storage solution where a workspace can be used to fulfil online orders and store merchandise at the same time – you won’t need a separate storage space or warehouse space just for your merchandise!
Traditional Warehousing is No Longer Viable
Outsourcing storage is not a new concept. However, conventional warehousing has its fair share of pitfalls that make it unattractive to SMEs.
Conventional warehousing has complicated leasing terms with leases often extending from a minimum of two years. Also, they have elaborate and costly exit clauses.
However, with self-storage solutions, lease agreements are flexible, customers can give shorter exit notice periods, and the deposit requirements are often less demanding. Most traditional warehouses also lack the flexibility of access that self-storage solutions offer.
Self-Storage Allows Room for Flexibility
SMEs generally have fluctuating needs and some operate in seasons. Therefore, they need flexible storage solutions to accommodate their demands during the upcycles and downcycles. Self-storage creates an avenue for SMEs to exercise this flexibility at a much lower cost as compared to office rentals or warehousing.
Seasonal businesses in particular benefit from this flexibility tremendously. Whenever they need to downsize or upsize their capacity, self-storage provides a quick, efficient and cost-effective option.
Competition has Enhanced Growth and Specialisation of Self-Storage
There is relative ease of entry into and exit from the self storage industry in Singapore. Costs associated with the conversion of a traditional warehouse into a self-storage facility are reasonably low. Thus, specialisation and variety have also grown.
There are service providers who avail climate-controlled facilities while other providers avail storage for specialised products such as wine. As product specialisation and competition among self-storage service providers increase, SMEs receive superior service quality, competitive pricing and a growth of shared services.
More SMEs are turning to self-storage due to its flexibility, cost-effectiveness and practical solutions. For a business that has relatively smaller office spaces, this is a great solution for their storage needs!