Flexe, a Seattle startup that offers a marketplace for warehouse space, announced Thursday a new next-day delivery service, which the company said would give brands the ability to reach 98 percent of U.S. customers faster than Amazon Prime two-day shipping.
Flexe has been amassing unused warehouse space that it can use as on-demand storage for companies, and its inventory now numbers more than 500 warehouses. Flexe says its new shipping service gives brands full control of the process from identifying ideal fulfillment center locations, to delivering product through integrations with all major carriers and even branding their own boxes.
“For the first time in history, e-commerce brands have an alternative to Amazon,” said Flexe co-founder and CEO Karl Siebrecht, a former executive at aQuantive and AdReady. “Our customers are under tremendous pressure to meet consumer demand for fast, cheap shipping. Flexe gives them the same network scale as Amazon, allows them to ship products in their own branded box, and gets them up and running in 30 days.”
Shipping has become an important component of the retail world, mostly thanks to Amazon. Because of Prime, which offers free, two-day shipping on millions of items for a $99 annual fee or $10.99 per month, millions of people have become conditioned to expect quick, inexpensive delivery.
Amazon has been lowering the barriers for free delivery, even for those without Prime, quietly cutting back the cost threshold from $35 to $25. And other retailers have responded. Walmart, for example, offers free, two-day shipping on orders over $35.
Flexe’s new service will help companies that want to compete with giants like Amazon and Walmart in shipping, but don’t have the time or resources to build out their own supply chain.
Flexe’s overall goal is to help those with unused space earn additional revenue, while enabling businesses to utilize a pay-as-you-go, on-demand model when they need additional warehouse space. This provides an alternative solution to the fixed costs that often come with a lease, particularly for retailers that only need extra storage space for a limited amount of time — perhaps a beverage vendor that sees sales spike in the summer, or a retailer that sells its inventory during the holiday season. Siebrecht has compared his company to Airbnb for the supply side, and Amazon Web Services on the demand side.
Flexe last year raised $14.25 million in a funding round led by Redpoint Ventures, bringing total funding for the four-year-old startup to more than $20 million.