FULL CASE STUDY – PORTABLE STORAGE FOR A MOVING BUSINESS

My family has owned and operated a traditional moving company, representing a major van line in California now for over 45 years. A company with no less than 3 generations of family members still actively involved today. As with any company, especially in the margin challenged moving industry, it was our task to continue the growth established by the family’s first generation … never an easy mission in such a competitive industry.

As the economy slowed in late 2007 and eventually “crashed” in 2008, the residential moving customer had already signaled that they were willing to provide some of the manual labor in order to reduce the cost of a traditional move. And so the DIY movement, germinating since the late 90’s / early 2000’s, began to gain real momentum and customer acceptance. Customers now had definitive options and as such, we as a family decided that it just made good business sense to give customers what they “wanted to buy, not what we wanted to sell them or had to offer.” And so in 2008, we got into the portable storage and moving business!!

Strategically, we as a company, decided to expand our service offering via portable storage in order to ensure that we had “options” for our customer thus eliminating their need to have to call another company for their moving needs. With portable storage and moving we were able to offer a less expensive option versus the traditional full service move. This ultimately has enhanced our overall service offering without cannibalizing our existing traditional business … a very prudent decision in hindsight. Although it has only been 9 years, our company has in excess of 200 containers that have had a 90% occupancy rate, on average, since service inception. Besides the price point advantage for customers noted above, portable storage and moving brings other benefits to our local customers as well:

  • Customer can pack, load and unload their containers on their schedule, not confined to a pre-determined mover’s schedule
  • Allows a customer to organize their move easier with the use of containers
  • Customer can lock and secure their container in order to eliminate access to their goods, thus eliminating the possibility of damage or loss.
  • Reduces the handling of a customer’s goods should their move entail storage … reduced handling has a positive impact on claims
  • Long distance moving customers can secure their goods in containers thus eliminating the possibility of multiple shipments being co-mingled on the same truck
  • Access to a ready, convenient and affordable solution for customers in need of de-cluttering prior to staging and selling their house, remodeling or down sizing in advance of retirement

All of that said, the moving industry is the very definition of a “seasonal” business. As such, what we have learned over the last nine years is that the portable storage business is steadier and not quite as seasonal as traditional moving; thus creating a positive impact on cash flow. We believe this is likely due to the fact that there are more and varied uses of portable storage containers than what a traditional full service move brings to our local customer base. Uses such as restoration, remediation, and seasonal on-site retail storage; this is business that has been siphoned away from movers by the portable storage industry which now can be recaptured by our portable offering. In addition to seasonality, portable storage and moving has had a quantifiable and meaningful impact in other areas on my family’s moving business such as:

  • Our portable storage business has grown 20+% annually since 2008 while our moving & storage business has grown only 3–5% annually during that same time thus exponentially helping to grow the company’s top line revenue
  • Portable storage containers provide “early” access to potential full service moving customers who need to de-clutter in advance of staging their house for sale
  • Provides a sales solution for BOTH full service and DIY prospective customers thus allowing us to “capture” more customers
  • Traditional moving leads associated with lower price point customers, are now a more viable lead with a portable storage [and moving] option which in turn reduces our cost per lead
  • A portable storage service [DIY] offering also generates an additional revenue stream as typically 40-45% of these customers nationally purchase labor services at ample margin
  • Provides traditional moving & storage “spin-off” business
  • Portable Storage offers a re-occurring revenue stream versus a depreciating asset in trucks that are only making the company $$$ if it is moving customers
  • Fully depreciated portable storage containers generating on-going monthly revenue improves the company’s equity position
  • The containers have provided a significant marketing opportunity to extend AND promote the company’s strong local brand with our name, logo and 800# on the portable storage containers themselves. Containers, like trucks, are “billboards” for our company, continuously moving throughout our local marketplace promoting our business.
  • Containers in our local market, either at residence or in transit, have reinforced our name recognition … 40% of our portable storage customers called us because they saw our containers in the market which in turn has had a positive impact on our full service moving lead acquisition opportunities
  • Providing the company with a means of supporting local community charities by being able to donate containers with little or no liability versus providing or leaving an unmanned truck at a local event

Although our containers were initially not branded with our company name, as our portable storage and moving business continued to grow, we decided to “brand” all new containers with our name and logo. Thinking back, we collectively believe that our company name has been definitively beneficial to the continued growth of our portable storage business.

As a family owned and operated business, putting the right people, in the right positions and at the right time as a company matures and grows is always a challenge BUT critical to any companies success. As such, one of the decisions that we made early on after committing to portable storage was that we felt it necessary to allocate management and service personnel specifically to our new container service; a decision that we believe has been integral to our success. Dedicated portable storage service personnel who understand the nuances of the service versus “pulling” a moving & storage driver off a crew to deliver or pick-up containers has created a better service experience for our portable storage customer. Ultimately however, “nothing happens until someone sells something” and therefore the benefit of adding portable storage to an existing moving business is that much of the infrastructure is in place … especially sales. With some portable storage and moving specific training, we have been able to successfully leverage our existing sales team to drive our portable storage sales.

As I fast forward to today, l think many of my fellow movers who are already providing portable storage services would agree, that educating prospective customers on the many advantages associated with portable storage is still one of our biggest challenges. In addition, conveying to sales that although portable storage might provide a smaller revenue opportunity than a full service move, without it, they might not generate any revenue. And as with any asset heavy business, the cost of expansion is always a consideration and yet it was obvious to us that it would be less costly to expand in the portable storage space than our core business given the capital required for new trucks, on-board equipment and additional moving personnel.

My final thought would be this; as a provider of portable storage services, I have come to realize that my company can generate more [~40%] in monthly storage revenue on a cubic ft. basis IF a customer’s goods are in one of my portable storage containers versus a traditional storage vault. Just another one of those “hidden” benefits that portable storage brings to me as a mover.