The Rise of Co-Warehousing: Saltbox Addresses E-commerce Logistics

The rapid growth of e-commerce presents significant hurdles for online businesses, particularly in securing storage and managing logistical operations.

Saltbox: A Novel Solution for Small Businesses

Tyler Scriven, Maxwell Bonnie, and Paul D’Arrigo identified this challenge and subsequently established Saltbox. Their innovative approach centers around a “co-warehousing” concept.

This model delivers dedicated space for small businesses and e-commerce merchants to manage operations, store inventory, and efficiently ship products, all within a shared facility.

Beyond physical space, Saltbox integrates logistics services and provides access to essential amenities like equipment rentals, packing stations, and even forklifts.

Flexible and Scalable Operations

Unlike traditional warehousing, Saltbox doesn’t require long-term leases. Tenants benefit from the ability to readily scale their operations up or down as business demands fluctuate.

CEO Scriven, formerly of Palantir and Techstars, describes Saltbox as occupying a unique position, “in that sweet spot between co-working and raw warehouse space.”

Rapid Expansion and Market Focus

Saltbox’s initial 27,000-square-foot facility in Atlanta was fully occupied within two months of opening in late 2019.

A second, larger 66,000-square-foot location in the Dallas-Fort Worth area is currently around 40% occupied. The company aims to operate eight locations by the end of 2021.

Key target markets include Denver, Seattle, and Los Angeles, with plans for facilities reaching up to 110,000 square feet.

Addressing a Critical Need in SMB Logistics

Scriven emphasizes that Saltbox was founded on the understanding that accessible “co-warehousing and SMB-centric logistics enablement solutions” are vital for many online retailers.

Many businesses currently rely on expensive and inconvenient self-storage and mini-warehouse options for inventory management.

Scriven’s own experience launching True Glory Brands, a retailer of multicultural hair and beauty products, highlighted these difficulties.

The Cost of Limited Industrial Space

“If you are in the market looking for 10,000 square feet of industrial warehouse space, you are effectively pushed to the fringes of the real estate ecosystem,” Scriven explained to TechCrunch.

“This is costing companies in significant but untold ways.”

Securing Funding for Growth

Saltbox recently secured $10.6 million in Series A funding, led by Playground Global, with participation from XYZ Venture Capital, Wilshire Lane Partners, Village Global, and MetaProp.

These funds will be primarily allocated to expanding into new markets.

Targeting a Specific Customer Base

Saltbox’s typical customer is a small to medium-sized e-commerce merchant generating between $50,000 and $10 million in annual revenue.

The company’s value proposition differs significantly from traditional flex office or co-working spaces.

Supporting Critical Workflows

“Our members are reliant upon us to support critical workflows,” Scriven stated.

Saltbox also caters to service-based businesses needing workspace or equipment storage, such as janitorial services.

All-inclusive pricing includes access to loading docks, a photography studio, utilities, and Wi-Fi.

Strategic Property Acquisition

Saltbox secures its facilities through a combination of purchasing and leasing, partnering with institutional real estate investors.

“These partners are acquiring assets and in most cases, are funding the entirety of capital improvements by entering into management or revenue share agreements to operate those properties,” Scriven clarified.

This model intentionally diverges from those employed by other flex space operators.

Learning from Industry Precedents

“We have obviously followed those stories very closely and done our best to learn from their experiences,” he added.

Investor Confidence in Saltbox’s Potential

Adam Demuyakor, co-founder and managing partner of Wilshire Lane Partners, praised the company’s ability to “structure excellent real estate deals” and facilitate national expansion.

He also expressed confidence that Saltbox is “extremely well-positioned to help power and enable the next generation of great direct to consumer brands.”

A Purpose-Built Solution for E-commerce

Playground Global General Partner Laurie Yoler highlighted that Saltbox offers a “purpose-built alternative” for small businesses currently operating out of garages and self-storage units.

Strengthening the Leadership Team

Saltbox recently appointed Zubin Canteenwalla as its chief operating officer. He previously held the position of SVP of Real Estate at Industrious and EVP of Operations at Common.