Case studiesMarch 10, 2016
Fun World Generates Thousands in New Revenue from Excess Warehouse Capacity
For more than 50 years, Fun World, an international wholesaler of holiday novelty goods has provided gifts, accessories, decorations and other items for all the major holidays including Valentine’s Day, St. Patrick’s Day, Easter, Halloween, and Christmas. What began as a small seasonal import business with sales of about $500,000 per year has today evolved into a business that spans the globe. The company is now one of the three largest Halloween product creators and suppliers in the world, selling in every continent except the Antarctic.
Given the peaks and valleys associated with the holiday business cycles, Fun World found its 400,000 square feet of warehouse space vastly underutilized for approximately half the year. Since the company carries fixed costs associated with the warehouse regardless of utilization, management sought ways to utilize the empty space to help offset these costs and increase profits. Subleasing was not a viable option, given the relatively short duration of their slow season.
Seeking a creative solution to increase its warehouse utilization, Fun World partnered with FLEXE, a Seattle-based company whose technology platform connects companies in need of flexible, short-term warehouse storage with businesses looking to fill warehouse space. Leveraging FLEXE’s secure online system, the company was able to generate significant new cash flow without any startup costs or long-term contracts.
With FLEXE, Fun World now generates close to double their fully loaded cost of the warehouse facility for the portion of the facility utilized, with no disruptions to their normal business operations.
- Fun World earns around $0.75 per square foot monthly, storing pallets in its four-high racking system and providing related materials handling services.
- Because of the efficiency of the FLEXE software platform, Fun World’s incremental revenue is approximately 90% pure profit, and its existing staff can manage the additional workload without being distracted from their core business.
- When Fun World needs its space back to manage inventory peaks, they simply "dial down" their capacity available with FLEXE, with no long term commitment.