Arkansas Proves Fertile for Pods Business

It was a company in laid-back Florida that figured out a way to make the dreaded move a little less painful, and its Arkansas franchisee is reaping the benefits in two booming markets.

You’ve probably seen the white containers sitting in yards and driveways in several neighborhoods and business parking lots in Northwest Arkansas, each one stamped with a curious “PODS” label with no other details given, aside from a phone number you want to call just to figure out what exactly it is and why it’s there to begin with.

“It’s a good thing that our Pods naturally do a lot of advertising on their own for us,” said Don Fowler, owner of the statewide Pods Inc. franchise. Pods is an acronym for Portable On Demand Storage — units that Fowler has cornered the market on in both central and Northwest Arkansas.

“The reception they’ve had nationally and here in Arkansas has been pretty amazing,” he said.

The self-storage market generates about $18.5 billion in annual revenue in the United States and Canada, according to the Self Storage Association of Alexandria, Va.

Because the “portable” twist on the industry is still relatively new, statistics for the mobile self-storage businesses are not yet broken out.

Pods Inc., which is based in Pinellas County, Fla., was the first company to patent and franchise a form of storage process that allows customers to pack up a free-standing unit at their leisure and then either have it taken away to be stored or delivered to a separate location, with very little time restraints or additional fees.

The Pods come in two sizes: a 12-foot unit that has 768 cubic feet of space and a 16-foot Pod that can accommodate 1,024 cubic feet of stuff (each Pod is 8 feet wide and 8 feet tall).

The average across-town move costs $225 per Pod, while a cross-country move would generally cost about half of what a moving company would charge for a comparable sized unit.

Pods’ revenue speaks for itself, jumping from $60 million in 2004 to $202 million in 2005.

According to Peter Warhurst, president and CEO of Pods Inc., the company will glide to another 50 percent increase in 2006 now that it has successfully penetrated nearly every mid-size and major market in the country and has recently expanded internationally.

In an interview with the Tampa Bay Business Journal, Warhurst said that despite the company’s swift and steady growth, Pods has deflected many growing pains, due in large part to it being extremely capital intensive.

“The way capital came in, it forced us to grow slowly, but now that all systems are in place, certain sectors like our inter-franchise business where we move people from one market to another grew 400 percent,” he said.

In keeping with the growth on a national level, Fowler is poised to move both his central Arkansas and Northwest Arkansas Pods operations into new warehouses by the end of the year while slowly expanding the fleet.

“Where we’re at right now in our sixth month is where we projected to be in our 13th month,” Fowler said. “In other words, we have as many Pods out in less than half the time as we thought. I’m telling you, Arkansas is really embracing the concept.”

Learn By Example

Fowler unintentionally market tested his product before he even knew what it was, which is how most smart business ideas come to fruition, he said.

After selling his house and moving his belongings into a self-storage unit until his new place was finished, Fowler pulled his stuff back out of storage just two weeks later when his home was ready.

“My former business partner had previously looked into this franchising opportunity before and told me about it,” Fowler said. “I thought, ‘Boy, it would have been great to just move at one time.’ We then looked at Pods again and bought it immediately.”

Fowler’s business partner, Dan Norman, who was the owner of Shred-It, the largest on-site document destruction company in the state, died May 4 in a traffic accident. He was 39.

Fowler, poised to keep at it alone, now operates a warehouse in North Little Rock that opened in December 2005, while the Springdale warehouse opened in February.

Pack It In, Pick It Up

Pods Inc. took off in Florida in 2002 and has since seen franchising take off across the country.

“I think the reason for that is sort of two things; one reason is that it’s a valuable service and the other is that they handle a lot of the logistics themselves,” Fowler said.

Pods Inc. is the first to transport mobile storage containers using a patented hydraulic lift system that was designed to reduce as much of the shifting of the container’s contents as possible.

“We call it the Podzilla, which is the equipment we use to get the Pods off and onto properties,” Fowler said. “We don’t just roll if off the truck; we use a lift that actually keeps it level. The unit allows for easy loading at just four inches off the ground.”

Customers can either call or fill out an online form requesting that a Pod be dropped off at home. Once a reservation is made, customers have the Pod for a month without any additional fees.

“I did all of it over the Internet, and it all worked like clockwork,” said Jason Thomas, a Morgan Keegan adviser who recently moved his family from one part of Little Rock to another.

“They sent me an e-mail and you could track it,” he said. “Once it was delivered to my yard, I could work at my leisure. You know you have it for a month, so there’s no real time deadline.”

Thomas used a moving company for the bulk of the family’s stuff but found the Pods unit to be effective for the “extra stuff” he had in the basement that he knew wouldn’t fit on the truck.

“After it’s loaded, you can either leave it at your house, get it delivered somewhere, or have it picked up and stored at our warehouse,” Fowler said.

All of the orders are taken and processed at the company’s Florida headquarters.

Through software written by the company’s founder, the orders are then sent out to each franchise, so in the mornings drivers pick up a form that already has the most efficient routes laid out for them based on the tasks and distances.

Fowler’s two operations currently have only four employees and three trucks. Central Arkansas has two trucks, while northwest has just one.

Each truck maxes out at eight moves per day, and sometimes it takes some creative scheduling to maneuver around the company’s busiest days, which are Fridays, Saturdays and Mondays.

“We not only do local moves for storage, we do cross-country moves,” Fowler said. “You can load your stuff in a Pod and we have a footprint in the majority of the country so we can move you from Little Rock to Los Angeles for about half the price of a full-service move.”

Pods Inc. has a network of trucks that transports nationally, so franchisees only have to worry about making local deliveries.

Growth Plans

The Arkansas Pods operation was recognized for its growth rate — one of the top three in the country — at the company’s national meeting in March.

The speed of growth has called for plans to move the central Arkansas Pods warehouse, which is currently a 58,000-SF operation at 4300 Stockton Road in North Little Rock, to a customized spot off Crystal Hill Road near that city’s border with Maumelle.

“Nothing is official, but that’s what we’re going to put a bid on,” Fowler said.

The Springdale warehouse, which is 18,000 SF, will move to a customized location in Fayetteville, though the paperwork is not yet finalized.

“By the end of the year, our plan is to have a building that we build in Little Rock and in Fayetteville,” Fowler said. “It seems like all of the existing facilities we’ve experienced are geared towards crate-style loading and unloading, and we need doors that are 20 feet wide by 20 feet tall to get Pods in and on a forklift.”

The company also plans to add another truck and employee at both locations to handle the influx of orders.

A Matter of Time

Fowler said Pods currently has virtually no direct competition offering the same type of service.

Arkansas Best Corp. of Fort Smith has its U-Pack Moving service, which delivers a trailer that customers then pack to be driven to its destination by an ABF Freight System driver.

“I assure you, competition is coming,” Fowler said. “In the cities where we’ve been most successful around the country, that’s where a lot of these startup companies are entering the market.

But the moving and storage industry is huge; we calculated in our business plan that if we get one customer per mini-storage complex in Little Rock, we’d be way over the amount of Pods that we want to furnish in Arkansas. There’s plenty to go around for everyone.”

One market the company thought would be a sure-fire hit was with college kids. After spending big bucks on advertising to both students and their parents in hopes of being the storage unit of choice during breaks from school, Pods has found that market to be dry.

“Quite frankly, the sales were essentially nonexistent,” Fowler said. “I don’t know if it’s because the concept is new or what, but we really expected colleges to be a big part of that, but they just haven’t been.

“Someone said that the contents that most students have are so few that it’s not worth getting a 12-foot container, but who knows?”

The main demographic Pods reaches is with 25- to 54-year-old homebuyers who are constantly on the move.

But even with the housing market slowing and interest rates creeping back up, Fowler said he’s covered.

“Even if the housing market slows and interests go high, and if people begin to downsize, they’re going to need storage and alternatives to their bigger homes,” Fowler said. “And we see some security in all of that, no matter which way the economy turns. No matter what happens, we feel like we’re in a business that will continue to offer a useful and convenient service.”