|Omni storage now earns you money by renting out your stuff|
Posted Oct 24, 2017
by Josh Constine ( @joshconstine)
“We want to change behavior around ownership on the planet,” says Omni co-founder Thomas McLeod. First, it built an on-demand storage business, where you can get things picked up from your place in as little as two hours, pay a monthly fee to store them depending on their size and get them temporarily returned to you for free whenever you need them. Now it wants to help you earn cash or offset your storage costs by renting out your stuff to other users and splitting the revenue with Omni 50/50.
“The storage business is good. The marketplace business is great. We had to build storage first,” says McLeod. Omni was already working pretty well with 100,000 items in its keep. I’m a user and the quality of service is incredible. I have them store all my camping gear, and drop it back to me whenever I’m hitting the woods for the weekend, and it all works so smoothly it’s like having some massive closet in the cloud.
That’s partly because all 48 Omni employees, including the brawny ones hauling your stuff, actually have stock in the startup. That pushes them to deliver an exceptional experience so the company keeps growing. Its warehouses reach operational profitability when they hit around 40 percent capacity, and all the recurring storage revenue makes its unit economics for pick-ups and drop-offs much better than startups in verticals like food delivery which expend resources for one-off payments.
The three-year-old startup has now raised $14.7 million from investors like Highland Capital Partners, which sees a future where people own and buy less while renting more.
Omni’s now available in the San Francisco Bay Area, from Berkeley to Stanford, and I’d recommend it if you have bikes, boxes or other giant objects cluttering your home. It’s often cheaper than renting an actual storage unit, with flat monthly costs of $3 per large item and $7.50 per closed container. Still, considering you have valuable stuff sitting around in the dark, it’d be nice to squeeze some money out of what you store.
That’s how Omni rentals works. Earlier this year the company allowed you to designate friends who could borrow your stuff, but now you can charge strangers. You just pick one of your items Omni is storing, set a price you think is reasonable, and Omni lists it for you on its rental marketplace. Anything you rent out is covered by a $2,000 insurance policy, and Omni takes photos before delivery, at pick up and at its warehouse so it knows who’s responsible if there’s any damage.
If you need a drill for some home improvements, a nice road bike for a long ride or a Halloween costume, Omni can rent it to you for much cheaper than buying, and you never have to leave your house. You can even rent that Snapchat dancing hot dog costume for $20 a day instead of buying it for $80.
Price ranges for Omni rentals
“Omni is more convenient than Amazon Prime,” said an Omni spokesperson. “You can search for something you’re considering buying and see if it’s available to rent first.” And even Amazon’s free two-day delivery doesn’t beat Omni that can get stuff to you in hours for $3 dollars in convenience fees or free the next day. Eventually Omni wants to give owners rental pricing suggestions to help them maximize their take, taking the guesswork out of matching supply to demand.
Omni will have to foster a whole new e-commerce behavior pattern to get rentals off the ground. And it must maintain quality assurance as a few lost storage or broken rental items could scare users away. But tests found that 60 percent of renters weren’t already storing stuff with Omni, so it could become a powerful sales lead generator. And long-term, as self-driving cars, warehouse robots and logistics systems improve, Omni’s profits should grow.
McLeod imagines one day that a musician could get their start by renting gear instead of buying it, lowering the barrier to entry to new hobbies and even professions. And he thinks people might seek to buy higher-quality stuff for their own benefit and to score taller rental fees. McLeod tells TechCrunch, “I don’t think we’ll ever stop the fact that people own some things, but there should be a democratization of access.”