In the U.S. and elsewhere in the world, the storage container market is growing. Even in spite of COVID-19, more and more commercial and residential customers are developing a need for converted shipping containers. Today, shipping containers are used for just about anything in the business world – from convenient storage, to ground-level offices, to storefronts, restaurants, and office buildings. Additionally, residential customers need portable storage containers more than ever for temporary storage or moving purposes. In sum, it’s a better time than ever to enter the storage container industry. Storage container professionals are making big profits these days leasing and selling shipping containers. If you’re interested in entering the industry, make sure you read through these key industry insights.
Understand the market
Looking at the health of the storage container industry is a great first step. The shipping container industry has grown over the past five years as a result of demand climbing consistently year over year. In fact, market research shows the industry is now worth almost $9 billion and is projected to reach $12 billion by 2027. Industry experts project the growth rate to be about 4% over the next 7 years.
Market share concentration
The market share concentration in the shipping container industry is relatively low. According to IBIS World, in 2019, the top 4 companies (including PODS Inc.) accounted for just under 20% of industry revenue. This gives small companies and organizations the opportunity to become successful within the market.
Demand for shipping containers is growing – and expected to keep growing – in both residential and commercial markets. Even since COVID-19 in the U.S., demand for containers keeps increasing as businesses need to face their storage challenges and find quick solutions.
On the commercial side, the demand from office remodeling projects and business expansions is driving the market. There is also a year over year increase in shipping container usage from retail, restaurant, and similar industries.
In terms of residential demand, the need for storage containers is growing as a result of the housing market and construction expanding. In fact, IBIS World predicts residential housing starts to increase by 2% over the next 5 years, which will drive shipping container rentals and purchases.
The storage container supply chain is healthy as well. There are currently over 20 million shipping containers in circulation, and obtaining inventory is relatively easy. They are manufactured regularly in China and used to ship cargo to the U.S., where they can be easily re-purposed for commercial or residential use.
There has been a trend towards online buying in the storage container market. With good digital marketing strategy and use of “best practices” for utilizing online leads, this can be a serious advantage for storage container dealers. It allows small companies to drive more traffic to their brand and meet new customers through digital strategies.
Benefits to Entering the Storage Container Industry
As mentioned, there are tons of benefits available to shipping container professionals. Setting up a business in this industry can prove to be very lucrative with the right customer acquisition strategy and sales team. If you do choose to pursue a career as a shipping container dealer, here are some of the factors working in your favor:
The demand for repurposed shipping containers is growing among both residential and commercial customers. More and more residential customers have home and moving needs. Additionally, commercial businesses are using storage containers in new, innovative ways. It’s even becoming a growing trend to use shipping containers as business storefronts.
As mentioned, although there are several key players in the shipping container business, market share concentration is relatively low. This gives small businesses the chance to grow their market share and become well-known in the industry.
Return on Investment
Purchasing shipping container inventory is relatively cost-effective. Once a shipping container has been used once to ship cargo overseas, it’s considered “used,” which lowers its price. Additionally, the supply chain for shipping containers is healthy, so you should have no problem building your inventory and offerings. No matter whether you’re focusing on commercial or residential leases and purchases, seeing a high ROI is promising. Especially for portable and residential storage container dealers, leasing contracts tend to be for short periods of time. This means that dealers can continue to lease the same product out numerous times a year. Then, they continue to make a profit on the same container.
Challenges to Entering the Storage Container Industry
Entering any industry comes with its own set of challenges. There are a few challenges and barriers to entering the shipping container industry to be aware of.
Starting your own business in this industry can cost you some money. This is because in addition to shipping container inventory, there are additional start-up costs. These include the cost of a business location, storage facilities for containers, trucks, trailers, forklifts, and other construction and delivery materials. According to IBIS World, it can cost as much as $2 million to start a company in this industry.
When starting your shipping container company, you will likely need to immediately hire individuals to help you get going. For instance, you’ll likely need an administrative staff that can handle billing, credit, and collections. You’ll also need a great sales team to make sure you’re maximizing your sales and ROI.
Competition with well-known brands
As mentioned the major players in the shipping container industry make up a relatively small portion of the industry’s revenue. However, it can be tough to compete with well-known brand names like PODS and Mobile Mini!
While Mobile Mini and PODS own only 7% and 7.4% of the market share, respectively, they are go-to companies for storage needs. PODS tends to be the winning brand when it comes to residential and portable storage needs. Mobile Mini tends to win in terms of commercial needs. However, if you build a great team and advertise your product locally, you have a good chance in building your brand from the ground up!
Just getting started with your shipping container business? Or looking for high-quality prospects to boost sales? 360Connect can help. We specialize in helping small and large shipping container companies alike grow their business. For 13 years, we’ve made a lasting mark on companies looking to capture more market share, find new customers, and grow their revenue. To talk to us about how we can help your company, get in touch with us today!