Self-storage is a system by which individuals or businesses rent units to store their products remotely instead of buying a warehouse. The self-storage industry dates back to the 19th century when movers used to build warehouses for their clients. However, today it has grown beyond the scope with self-storage operators offering online reservations. Traditional self-storage solutions have given way to P2P self-storage marketplaces.
The core business idea is to develop a secure online marketplace for storage needs by connecting people who want to offer spare storage spaces to people who are in need of it. Building a self-storage marketplace is a lucrative idea to grow your business and take it to new heights. Before getting into how to start a storage business, let’s learn how a P2P self-storage system works and how it makes money.
What is a P2P self-storage marketplace?
The basics of a peer-peer self-storage marketplace are similar to popular rental marketplace services like Airbnb. People who have extra storage space register with the website or an app, and people who in need of shared space will go online to find one that suits their needs. Hosts can decide how much access they want to grant to renters and what they are willing to store. There are some obvious risks you have to handle when strangers store unknown goods in other people’s space. Therefore, it is important to put up a list of banned items like toxins, harmful chemicals, firearms, drugs, etc.
So, basically a P2P self-storage marketplace works as a great platform for hosts to earn a utilize their spare space in a productive way. Whereas, for renters, the platform comes handy when they want to book storage space and pay for it conveniently and securely online.
This style of self-storage solution is more affordable than traditional storage solutions and additionally, it is easy for users to access their things whenever they need it. The self-storage marketplace is a perfect platform for people who are in need of a little extra income with minimal efforts and investments.
How do online self-storage websites make money?
The listings on the online self-storage platform are free of cost, and renters just have to pay for the services they use. However, the platform takes a share of each transaction as a commission. Mainly there are two ways to make money.
• Commissions from storage space owners.
• Transaction fee from the renters.
You can set the percentage of the fee you will collect from users who register to your platform. Commissions can vary anywhere from 3% to 20% and transaction fees can be around 5% to 15% of the total transaction. You can also allow paid listings on the platform for a price where users can push their storage listing to the top for better chances of getting booked.
What are the key challenges to a self-storage system’s success?
To succeed in the competitive market when starting a storage business, it is important to understand your customer’s needs and offering services that match their expectations. The major challenges are:
To urge hosts to list their storage space in your platform, trust plays a critical role. The same applies to renters as well. Assuring the quality of services and keeping your online platform secure to carry out financial transactions is a great way to build trust. To go a step further, you can introduce a guarantee plan offering insurance coverage for damages on the items while in storage.
To build trust and reduce the risk of loss or damage to people’s goods, you have to add features that create a social connection between users of the platform. For example, functionality to search for their friends or mutual friends on Facebook who has spare storage space is a great idea worth incorporating.
People nowadays have many options out there. If they revert to traditional storage solutions, your storage marketplace will lose its momentum. The key is to create a unique experience for both kinds of users so that they can trust each other to make the transactions. Instead of offering storage spaces, offer an experience to your users- A way to book storage spaces effortlessly.
Features of a customized self-storage system
If you are looking for answers on how to set up a self-storage business, it must start with setting up a website with top quality UI and UX to attract user attention and engage them the right way. The key is to give a distinctive feel to it and focus on the interactivity. When it comes to the features, you have to keep the best interest of both users into consideration. To have a better understanding, let’s streamline the overall process into different steps.
How it works for storage space owners
• Create listings
• Communication with renters
• Coordination with the renter to rent out storage space
• Get paid
How it works for renters
• Search for storage space in a particular location
• Contact the storage space owner
• Reserve space
• Confirm the booking
• Pay for the service
Now, let’s look into the basic features of a self-storage system that caters to both of its users.
Registration and signup
The registration or sign up functionality is the basic yet important one for any self-storage platform. Try making your sign up feature distinctive from traditional email and password signup by allowing social network authentication. Soon after registration, your users must be redirected to “Rent a space” or “host space” page.
This personal space for users displays personal information, space listings, booking, and other related information. While starting a self-storage business online, it is important to create a user-engaging dashboard where users can see all the available information. This where you must include search, messaging, listing, help chat button, and other important sections.
Search is one of the most powerful features of any website. Therefore, ensure it incorporates a good interface that makes it easy to search a storage space at a specific location. Add relevant filters like time slots, geolocations, etc. so that users can find the right match easily.
This is one of the key features of a P2P self-storage business that allows storage space owners to list out their space. Make sure this is a user-friendly process to enhance the usability of the service. Allow users to specify types of space, size, accessibility, address, price, and images while creating their listings. Adding information about unit size is critical and goes a long way to ensuring your customers reserve the right size before they show up with a truckload of their stuff.
Renters must be able to book storage spaces through a secure payment gateway. Hosts must be able to view new reservation requests, active reservations, and past reservations.
End-to-end communication is essential for the success of a peer-peer storage marketplace. It reduces the dependency of the platform in the overall flow of information between two users.
Help chat is the most intriguing USP of a self-storage marketplace as it creates an opportunity to improve the trust of your users. Users can utilize this tool to ask any queries related to the platform or transactions.
Cost of starting a self-storage business Website
Peer-peer marketplace development is a complicated process and requires a lot of work. However, with advanced technology, it no longer takes months of work to launch your project. The cost breakup is an important part of this blog that give insights on how to start a self-storage facility business.
If your platform just intends to connect storage space owners and hosts, you don’t have to think about any other investment rather than building the website.
However, if you are planning to offer your own storage units, then you have to consider this as well- how much does it cost to build a storage facility along with the development cost of the website.
To understand how much does a self-storage website development takes- let’s look in 2 different ways of building the platform.
• Building the website from scratch
• Starting a storage unit business website with a ready-made script.
Building from scratch
The total cost involved in building a self-storage system greatly depends on your project requirements. However, other factors also influence the overall cost such as the number of developers, number of platforms, technical complexity, customization of design, and a lot more.
If you ask about how to set up a self-storage business online by building the website from scratch, it is the most expensive and time-consuming way. The whole development process must be divided into different modules and you have to look into each module separately. This includes both front and backend development and this takes a minimum of 3 months and can even go up to a couple of months more.
Building a self-storage marketplace can be divided into different stages like research, planning, UI/UX, actual development process, testing, and marketing. Based on the time required to complete the entire development process, you can estimate the final cost as the rates charged by developers is calculated on an hourly basis.
Let’s segregate the development process into different factors to know how much does it cost to build a storage unit rental marketplace.
Selecting the right platform
The total cost of developing an Airbnb for storage depends on the number and selection of a platform where you have to implement your service. For example, you can choose to offer a desktop version, android and IOS version, etc. and the cost for each platform varies.
The geographical location of developers
The cost also depends on the location of the developers you choose. Based on the location, the development fee and taxes applied can also vary considerably. On average, hiring a developer can cost you from $35 to 120/hour.
Design and technical complexity
The cost of starting a self-storage business greatly depends on the website design. Customized UI/UX comes with an extra price. However, it is not a great idea to compromise on the quality of your design, as it is critical when it comes to impressing users. Technical complexity also adds up to the cost.
Being the backbone of the whole system that supports all the features and functions, back end development is one of the most critical and time-consuming processes. Moreover, it is one of the processes that account for a majority of the cost of starting a self-storage business.
On average, the entire development process can take around 1000- 3000 hours. After summing with an hourly rate the final cost can come around $35,000 to $360,000 depending on the hourly rate of developers you choose.
Starting a storage unit business website with a ready-made script
The self-storage marketplace is similar to Airbnb’s business model, which connects travelers with hosts who want to rent their living space instead of storage spaces. Creating your self-storage business website from scratch is not a feasible idea when there is already a quick and cheaper option on the market. A self-storage website clone script can do the job for you in an easy, fast, and more affordable way.
The script comes with all the features and functionalities to earn revenue from a self-storage business. You get a 100% source code that you can install on multiple domains and covers all the advanced features like filtered such, host-renter commination, secure payment, multi-currency support, server requirements, monetization features, and a lot more. The price of a readymade script for a self-storage business system can cost you around $1000 and $2000 for mobile apps. Choosing a readymade script is quite affordable solution for starting a storage unit business as it involves a one-time payment only.
We are living in an Internet-connected world. Even with the increasing number of online self-storage businesses, there is still huge potential in the market. As self-storage units are very expensive, there is a high demand for cheaper options. Peer-peer self-storage marketplaces offer more personalized, localized, and trustworthy storage options. Your goals must not be just to offer storage solutions but to provide the most convenient and secure options available in the market.
To thrive in the industry, you can also offer extra services like storage auctions to serve people outside your customer base and to earn additional revenue from the same. Hope this blog gave some significant insights on how to start a storage business marketplace. Now that you know the essentials of launching a storage business, you can get started right away.