Why would you invest in a mobile storage system? Edward and Jordana Thirlwall took their experience in removals and created a model that brings an extra level of convenience to the self-storage arena. What makes it work?
There’s no doubt this is a competive market but the greatest challenge in the world of mobile storage is managing customer expectations, says Supercheap Storage CEO Edward Thirlwall. “We want to ensure we deliver what we promise. Customers don’t understand how much work it is to get goods into storage and the labour required.”
Meeting customer needs
Co-founder Jordana Thirlwall agrees. “We like to take the time and effort and pack and store everything properly.”
Preparation is key; for instance, customers who can properly defrost their fridge before packing will be able to get it back in pristine condition, she explains. Packing staff undergo accredited training too, she says.
Another concern is the cost conscious nature of the storage business. “Price comes up every day,” says Jordana. “We want to have a superior service at the best price so we offer add ons and benefits. We are always thinking about what extra we can give the customer.”
The original concept, and basic service, is a do it yourself loading package where the module is delivered to the client’s address but the customer fills it themselves. The couple have introduced a premium loaded service where the trained packers will wrap and load the goods, and now about 90 percent of the customers choose this option.
Another add-on is protective padding, often not available in cheap storage options.
“From our experience these are essentials,” says Jordana.
The 11 locations that cross the country will be joined by three more this year predicts Edward. Key to the sites is the customer preference to keep their belongings no further than 8km from their home. “People have a comfort zone, they just want things nearby,” he explains.
Customers’ four concerns are access, price, convenience and security.
Despite the no-frills model, with wooden packing crates rather than lock-up storage units housing personal goods, clients can easily access their stored items. Jordana says about a third of customers regularly make appointments to unlock their storage modules which are delivered to an easy-access loading dock.
How franchisees build a business
To man this business an employee count would typically reach 10 full time warehouse/mobile staff, an office assistant and the warehouse manager.
But it’s possible for franchisees to start out with small storage spaces and build up. “That’s how we started,” explains Jordana. “We had a space the size of a garage that had 10 modules. Now we are in an unlimited space and have 1000 modules.”
The franchisor only collect fees off the storage revenue, not the income earned from the removals element of the package. “So everything the franchisee makes on moving sales, is theirs to keep,” says Jordana.
“Regarding storage revenue, we take 12.5 percent in fees, plus an additional five percent contribution for the marketing fund. It may seem that 12.5 percent is high, and yes compared to other franchise models like food and beverage it would be. However the profit margins in our industry are higher, and therefore the fee reflects this.”
Expansion and innovation
Edward points out that it is a capital intensive business. “We have grown so quickly, capital resources have been heavy.
“But we’re not after a high number of franchisees, we’re concerned about their success. I think we have capacity for 50 in Australia.”
The big expansion will come from business in China, he believes. The company formed a joint venture/master franchise agreement and have launched a unit in Beijing, with strict protocols about growth.
“We had to change the model, the average storage unit in China is three cubic metres so we had to make the modules smaller and able to fit into a van, not on a truck,” says Edward.
Jordana points out other shifts in business development. “We’ve had to change our advertising too. Google is banned there, so it’s been difficult to get an online presence, we’ve had to go back to old school advertising with flyers.
“It’s made us think about it a bit more though. You can get a bit lazy and we’ve had to think about how to crack in to the market.”
The Thirlwalls are looking at a 20 year development in China. “We’re not in a particular rush,” says Edward. “We still don’t have all our ducks in a row.”
There’s a new model too that will make its way to the Chinese marketplace in time. This week Sydney will see the first of the brand new concept modules – a waterproof, steel, adjustable module that can be stored on the street.
Typically on-street storage units are timber modules with waterproof covers. The Supercheap Storage version is made from steel sheets printed with company branding and held in steel frames.
“It looks like a Lego set,” says Edward. There are three, six, nine and 12 cubic metres that can fit together in different formats to suit exceptionally high or wide items.
The new modules can fit on a flatbed truck and can be accessed by a gantry crane in the warehouse, allowing for wasted space to be utilised. “This means we can pass on some cost savings to the customer,” Edward says.
What the couple look for in a franchisee
- Cultural fit
- Desire for success
- Ambition to be a small business operator
- Happy to get hands dirty and get involved in the business